According to Air Canada, it is clear that the merger would not be approved by the European Commission.
The largest Canadian airline is Air Canada after almost two years of negotiations withdrew from plans to buy its competitor, Transat, which also includes Air Transat.
The carrier announced a surprising news today in press release. He cites as a reason the conditions under which the approval of the merger was conditioned by the European Commission. Given that both companies have a significant share of flights between the European Union and Canada, the transaction required the approval of the authorities in Europe in accordance with the applicable legislation.
“In order to meet the main conditions of the merger, we offered various measures that went beyond the edge of economic return. These were measures that were previously commonly accepted for similar mergers. However, it is clear from recent negotiations with the European Commission that the European Commission will not approve the merger in this situation,“Air Canada said in a statement. It is not clear what measures and concessions were supposed to be.
Therefore, Air Canada decided to withdraw from the merger plans altogether. According to the carrier, concessions would jeopardize the competitiveness of airlines, especially in the current context of a slow recovery in demand for the covid-19 pandemic.
Air Canada will pay Air Transat a fee of C $ 12.5 million. While Air Canada is a more classic airline, the entire Transat group, in addition to aircraft, operates more heavily in tourism. If the merger took place, Air Canada, for example, would be taken over by hotels and resorts in the Caribbean owned by the Transat Group.
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