Feds approve Air Canada takeover of Air Transat

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TORONTO — Air Canada has been cleared by the federal government to take over Air Transat, Transport Canada announced Thursday.

“The Honourable Omar Alghabra, Minister of Transport, today announced that the Government of Canada has approved the proposed purchase of Transat A.T. Inc. by Air Canada, subject to strict terms and conditions that are in the interests of Canadians,” it was announced in the release.

Air Transat said in December 2020 that the COVID-19 pandemic had taken a heavy toll on its operations, and was a key factor in the final decision as the airline faced “significant financing challenges,” the release said.

The air industry in Canada has taken big hits throughout the COVID-19 pandemic.

Air Canada announced 1,500 layoffs Tuesday as it continued cutting service, on top of the 1,700 jobs cut in January. The airline also paused all operations of its Rouge line on Feb. 8 indefinitely, laying off 80 workers.

WestJet also laid off staff on the heels of the federal government’s request that airlines suspend all flights to Mexico and the Caribbean until April 30.

Air Transat had announced two weeks ago that they were temporarily shutting down all operations in light of the government’s request, until news broke Thursday of the approved sale to Air Canada.

In the release, the government acknowledged that some Air Transat passengers are still waiting for their refunds for flights cancelled due to COVID-19, and assured Canadians that “refunds are an integral part of the negotiations with airlines regarding any assistance plan.”

Other terms and conditions associated with the proposed acquisition were listed as: measures to have other airlines take up Air Transat’s routes to Europe, preserving the Air Transat brand and office in Quebec, continued employment of 1,500 employees, commitments to facilitate aircraft maintenance in Canada and to prioritize Quebec contracts, a price monitoring mechanism, and to launch operations of new destinations for the airline within the first five years.