Air Transat and Air Canada aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson

Air Transat and Air Canada aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson

Air Canada, Transat acquisition deal up in the air as deadline expires

Both parties now have the right to terminate the agreement at any time

Air Canada’s acquisition of Transat AT Inc. is up in the air after Canada’s largest airline said it will not allow more time for the deal to go through.

The acquisition was set to be completed by Feb. 15, but since the deal has not yet received approval from the European Union, both parties now have the right to terminate the agreement at any time, Transat said in a statement Tuesday morning.

“Transat and Air Canada are continuing their discussions regarding potential amendments to the arrangement agreement that may be required,” Transat said.

Despite the discussions, there is no guarantee that any new agreement will be reached, or that the existing one will not be terminated altogether, Transat said. The transaction had previously been approved by the Canadian government on Feb. 11.

Transat’s stock was down 9.13 per cent in morning trading on the S&P/TSX composite index, while Air Canada shares were up 2.64 per cent.

Air Canada’s decision not to extend the date for the transaction comes amid an uncertain and rapidly changing business environment for the airline industry.

Canada’s airlines recently suspended all flights to Mexico and the Caribbean until April 30 at the request of the federal government, in addition to a mandatory hotel quarantine for air travellers entering Canada, which goes into effect on Feb. 22.

The restrictions further hampered travel demand and forced widespread layoffs and route cuts. Transat, for its part, has suspended virtually all of its operations until April 30.

Calin Rovinescu, Air Canada’s former CEO and president, said during the company’s most recent earnings call on Feb. 12 that he was encouraged by signs of progress in talks between the industry and the federal government regarding a bailout for the airline sector.

Rovinescu also said that he expected the federal government to roll out a co-ordinated testing program at airports that would replace some aspects of the current quarantine measures.

RELATED: Air Canada to temporarily cut at least 1,500 jobs, suspend 17 foreign routes

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Terrace & District Chamber of Commerce hosted a virtual all candidates forum for the Coast Mountains School District trustee by-election on Feb. 23, 2021. (Screenshot/Terrace & District Chamber of Commerce Facebook)
Terrace trustee candidates lay out top priorites during virual all candidates forum

All candidates forum was held virtually on Feb. 23, 2021

(Phil McLachlan/Capital News)
Murder charge laid in February 2020 stabbing death of Smithers man

Michael Egenolf is charged with the second-degree murder of Brodie Cumiskey

(Phil McLachlan/Capital News)
Murder charge laid in February 2020 stabbing death of Smithers man

Michael Egenolf is charged with the second-degree murder of Brodie Cumiskey

Island Health chief medical officer Dr. Richard Stanwick receives a first dose of Pfizer vaccine, Dec. 22, 2020. (B.C. government)
COVID-19: B.C. seniors aged 90+ can start to sign up for vaccination on March 8

Long-term care residents protected by shots already given

The Majagaleehl Gali Aks Elementary School in Hazelton is being shut down for a week by the Gitanmaax Band Council following a confirmation of a COVID-19 exposure there on Feb. 26. (Black Press Media File Photo)
COVID-19 exposure notice shuts down Hazelton school

Closure to last for one week and school is to be sanitized

Older rental apartments are prime candidates for renovations, and could result in lost affordable housing stock. (Zoë Ducklow photo)
B.C.’s renoviction overhaul a good start, but won’t preserve affordable stock, lawyer says

And still no protection for people who can’t pay rent due to COVID-19

(Photo by Marissa Baecker/Shoot the Breeze)
B.C. WHL teams to hit the ice with Kelowna, Kamloops hub cities

Kelowna, Kamloops centres chosen to host B.C. WHL teams for 24-game regular season

The machines are akin to ATMs and allow drug users at risk of overdose to get hydromorphone pills dispensed to them after their palm has been scanned to identify its unique vein pattern. (CANADIAN PRESS)
Feds dole out $3.5M for ‘vending machines’ to dispense safer opioids in B.C.

The machines are located in four cities across Canada, including Vancouver and Victoria

Kelowna’s lakefront visitor centre is one of 130 around the province. Tourism businesses have been hardest hit by COVID-19 restrictions on travel. (Destination B.C.)
Tourism, small business getting COVID-19 help, B.C. minister says

$300M grant program has delivered $50 million so far

The incident happened in downtown Castlegar. Photo: Betsy Kline
Castlegar teen recounts stabbing after stranger breaks into grandmother’s house

The unnamed teen survived a terrifying attack Feb. 21

(Black Press file photo)
Agassiz boy, 11, dies from ‘extensive injuries’: Homicide team

Agassiz RCMP were called out Friday to assist with a child in medical distress

Dr. Amit Desai of St. Francis Hospital receives a COVID-19 vaccine on Dec. 17. (Photo courtesy of CHI Franciscan)
B.C. has now vaccinated more people from COVID-19 than total confirmed cases

B.C. has reached a milestone, vaccinating roughly 1.6% of its population from the coronavirus

Most Read