In mid-May it was announced that Air Canada intends to acquire Air Transat. At that time, airlines signed an exclusive agreement to buy all issued and issued shares for a $ 520 million deal.
Many things can still go wrong after announcing such a deal, so in the last few weeks I've been waiting to see if this deal will go through or not. The deal is now one step closer to finalization, as the two companies have reached an additional agreement.
Air Canada acquires Air Transat
Air Canada and Air Transat have entered into a final settlement agreement for the combination of the two companies . While the deal continues to be subject to regulatory and stock approval and other final terms, the deal is expected to close in early 2020
Calin Rovinescu, Air Canada's president and chief executive, said:
have reached this final agreement to combine Transat with Air Canada to achieve the best possible result for all stakeholders. For Transat and Air Canada's shareholders this combination provides excellent value while providing greater job security for employees of both companies through greater growth prospects. Air Canada intends to retain the Transat and Air Transat brands and to maintain Transat's headquarters and key functions at Montreal . Both companies have demonstrated excellence, as shown by the Skytrax Awards for 2019. Travelers will benefit from the enhanced capabilities of the merged companies in the highly competitive, global travel market and from access to new destinations, increased bandwidth and increased frequencies. The Quebec economy will take maximum advantage of the world's largest international aviation business based in Montreal . "
Air Transat and Transat will be maintained separately to complement Air Canada, Air Canada Rouge and Air Canada Vacations.
Air Transat will be maintained as a separate brand
This is not very logical on the surface – Air Transat is a competitor of Air Canada Rouge. They are both low-cost carriers and their route networks are largely overlapping. For so long I do not think it makes sense to keep both brands.
If I had to guess, I would say they would probably say they will keep them as separate brands for now it seems they keep competition as much as possible as they seek regulatory approval.
Or this or long-term plan is to position Air Transat and Air Canada Rouge separately and serve different markets (it can be focused on long-haul flights while the other can focus on short-haul flights or
I just do not believe the long-term plan will be more or less "common" for Air Canada Rouge and Air
This deal is bad news for consumers
While airlines will always try to turn it into a different way, this is undoubtedly a bad news for a drink Air Transat was a strong competitor in Canada and this deal eliminates them as a competitor, even if they maintain Air Transat as a separate brand, they will not have to compete in the same way as before
Add the fact that WestJet is acquaintances, and I would say that this is bad news for Canadian passengers.
What do you think of Air Canada's intention to keep Air Transat as a separate brand?