Full width home advertisement

Post Page Advertisement [Top]

MONTREAL, CANADA - The ongoing global crisis is likely to hinder the acquisition of Air Transat by its competitor Air Canada.  According to sources who are well-informed about the matter said that Air Canada would like the Federal government to intervene to block the transaction.

Last year in August, Air Canada increased its offer from $ 13 to $ 18 per share. The airline was ready to raise $ 720 million to get its hands on the Quebec's flag carrier. To date, the transaction remains subject to the green light from Transport Canada, whose decision is pending.

The current crisis has clouded the outlook and would make the acquisition unnecessary for the national carrier. Air Canada has made it clear to the federal government, said an informed source.

Since the start of the pandemic, Air Canada CEO Calin Rovinescu and his teams have worked hard with Ottawa. As of March 18, Calin Rovinescu had direct access to Prime Minister Justin Trudeau to discuss issues related to the country's air transportation industry, including the financial support of the Federal government.

Minister of Finance, Bill Morneau, Minister of Economic Development, Navdeep Bains, Deputy Prime Minister Chrystia Freeland, and Transport Minister Marc Garneau have also been involved in discussions in the following days.

Air Canada refuses to comment on the issue. The airline says ongoing talks with the ministers of the federal government are related to the impact of COVID-19, not to the acquisition of Air Transat.

"We are going to look at this situation between Air Canada and Air Transat," 

said prime minister Justin Trudeau during his daily press briefing.

"We are going to do what we have to do to ensure that Canada remains a globally competitive country for air travel."

Transat's shares have dropped to $5.88 from to $16.19 in the Toronto Stock Exchange.

A federal government decision on the Air Transat transaction is expected soon.

Bottom Ad [Post Page]