[ad_1]
The EU would hardly have approved the acquisition. That’s why Air Canada no longer wants Air Transat. This is especially a problem for the small airline.
Together they wanted to be even stronger in the Christmas market. Almost two years ago, Air Canada announced that it would take over Transat AT with its airline subsidiary Air Transat. The airline initially offered C $ 520 million, then the price was even revised to C $ 720 million.
A lot has happened since then. The Canadian competition authority has approved the deal, as have the shareholders of the two companies. And that although the purchase price was massively reduced as a result of the Crown crisis. Finally it was only 190 million dollars. But this amount does not flow either. On Friday (April 2), the two companies announced that they would abandon the transaction.
Concerns about a variety of routes
The reason for this: there was no prospect of approval of the acquisition by the European competition watchdog. Air Canada explains that “a comprehensive package of corrective actions was offered.” And that went beyond what was “accepted by the European Commission in previous cases of airline mergers.” However, there was no chance that Brussels would approve it. No more compromises are acceptable.
Air Canada and Transat are the two leading airlines with a tightly knit route network between Europe and Canada, EU Competition Commissioner Margrethe Vestager said in a reaction. “We opened an in-depth investigation because we were concerned that the proposed transaction would negatively affect competition in these markets and lead to higher prices, lower quality or fewer options for travelers.” Competition problems existed on a large number of transatlantic routes.
Transat needs $ 500 million
For Air Canada, the procurement task is manageable. Now it has to expand on its own in the vacation business, which is generally considered attractive after Corona. It also has to pay Transat AT $ 12.5 million in compensation.
It becomes more difficult for Transat AT and Air Transat. The company has emphasized several times that it needs more money to be able to survive independently. A total of C $ 500 million would be needed in 2021, he said again on Good Friday after the deal was finalized. But one is sure of receiving the money.
Negotiations with new prospects
On the one hand, the management of Transat AT wants to see how the company can survive on its own. On the other hand, you want to negotiate with other potential stakeholders. One of them is Canadian investor Pierre Karl Péladeau, who has so far turned his back. Air Canada has always been considered the best party.
Air Transat primarily flies sun-hungry Canadians to the Caribbean in winter. Airbus A321s are sufficient for these routes. In summer, on the other hand, the holiday airline transports tourists mainly to Europe. The fleet consists of Airbus A330 and A321, as well as A321 LR.
[ad_2]
