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Air Canada buys Air Transat, but …



In mid-May, it was announced that Air Canada intended to buy Air Transat. At that time, the airlines had entered into an exclusive purchase agreement for all issued and outstanding shares in a $ 520 million transaction.

Many can still go wrong after such an agreement is announced, so in the last few weeks I have been waiting to see if this agreement is going through or not. The agreement is now one step closer to being terminated, as the two companies have entered into a further agreement.

Air Canada buys Air Transat

Air Canada and Air Transat have entered into final agreements for the combination of the two companies . While the transaction is still subject to regulation and shareholder approval and other closed conditions, the deal is expected to be completed in early 2020.

Calin Rovinescu, Air Canada's CEO, said the following:

"We are pleased to have Achieved this final agreement to combine Transat with Air Canada to achieve the best possible result for all stakeholders, for Transat and Air Canada shareholders, this combination gives good value while providing increased job security for both companies' employees through greater growth prospects. Canada intends to preserve the Transat and Air Transat marks and maintain the Transat headquarters and its main functions in Montreal both companies have demonstrated excellence as shown by the 201

9 Skytrax Awards. the improved capabilities of the merged companies in the competitive global leisure market and from access to new destinations, more connection traffic and increased frequencies. The economy of Quebec will provide the greatest benefit from having a Montreal -based growth-oriented global aviation champion, the world's most international business. "

Air Transat is to be maintained as its own brand

What is surprising here is that Air Transat and Transat brands should be maintained separately to complement Air Canada, Air Canada Rouge and Air Canada Vacations. [19659002] On the surface that is not very logical – Air Transat is a competitor of Air Canada Rouge. They are both low-cost carriers, and their route services largely overlap. So long-term it does not seem to make sense to maintain both brands.

If I had to guess, I would say that they probably say they will maintain them as separate marks for now to make It seems as if they maintain the competition as much as possible, as they seek regulatory approval.

Whether it or in the long run, the plan is to place Air Transat and Air Canada Rouge separately and make them serve different markets (it may be focused on long-haul flights, while the other might be focused on short-haul flights, or something).

I just don't think that in the long run it will be more or less "business as usual" for both Air Canada Rouge and Air Transat.

This agreement is bad news for consumers

While airlines will always try to spin this differently, this is undoubtedly bad news for consumers. Air Transat was a strong competitor in Canada, and this agreement eliminates them as a competitor. Although they maintain Air Transat as a separate brand, they do not have to compete in the same way as before.

Add to that the WestJet is being bought and I would say this is all pretty bad news for Canadian travelers.

What do you do with Air Canada's intention to keep Air Transat as a separate brand?


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