Competition watchdog warns against Air Canada’s proposed deal to buy Transat

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By The Canadian Press Fri., March 27, 2020

GATINEAU, Que. – The Competition Bureau says Air Canada’s proposed acquisition of Transat AT Inc., which owns Air Transat, likely will hinder competition and result in less choice for Canadian travellers.

In a report delivered to Transport Minister Marc Garneau, the watchdog says eliminating the rivalry between the two carriers would result in higher prices, fewer services and ultimately less travel by Canadians on a range of competing routes.

The bureau’s analysis found that the deal would impact 83 overlapping routes, including 49 between Canada and Europe and 34 between Canada and sun destinations in Florida, Mexico, Central America and the Caribbean.

The agency notes that its analysis draws on information collected prior to the COVID-19 pandemic, which has cratered airline revenues as borders close and travel demand plummets.

Shareholders at Transat approved a $720-million acquisition offer from Air Canada in August, but the deal also faces scrutiny by European regulators eyeing the impact of a takeover that would see the country’s biggest airline control more than 60 per cent of transatlantic air travel from Canada.

Transport Canada has until May 2 to complete a public-interest assessment and provide it to the minister.

This report by The Canadian Press was first published March 27, 2020.