Air Transat has shared this week that it expects that the airline’s acquisition by Air Canada will be complete by February. The Montreal-based carrier is hopeful about the transaction but is waiting for authorities to confirm approval.
Anticipating the official word
In October, Air Canada shared that it is continuing the process of taking on its counterpart despite the conditions resulting from the global health crisis. Now, the timeline of this purchase is becoming clearer.
According to a press release seen by Simple Flying, a new arrangement agreement was signed on October 9th, 2020 at a price of $5.00 per share or 0.2862 Air Canada share for each Air Transat share. However, the Canadian approval process is still ongoing. Moreover, the companies expect to hear a decision from the European Commission on February 9th. So, once approval has been granted by officials, the agreement will be finalized. Altogether, if all passed, the deal will be completed before February 15th.
Air Transat states that the pandemic is currently complicating competition authorities’ assessment process. Airlines across the continents have been reducing services and seeking financial aid amid the challenging conditions. So, the situation could impact the obtaining of approvals from regulatory authorities while the global health crisis continues to rock the aviation industry. The press release adds that if Air Canada does not come to an agreement with authorities and obtain the needed approvals before the middle of February, the arrangement agreement could be terminated.
A helping hand
Air Transat president and CEO Jean-Marc Eustache highlights that the deal with Air Canada would give his airline much-needed support amid the global health crisis. Nonetheless, the carrier is putting motions in place in case the move is not soon finalized.
“Our results reflect COVID-19’s devastating impact across the travel industry,” Eustache said in the press release.
“During the year, we took all necessary actions to limit the damage and preserve our cash. The upcoming completion of the transaction with Air Canada should give us the solidity to face the crisis and capitalize on the recovery that should be sparked by the arrival of a vaccine. We have put in place a $250.0 million short-term financing facility and are currently working on replacing it, should the transaction not take place, with an overall financing covering our needs for the year 2021. This financing could also be obtained as part of a support program for the industry, as announced by the government.”
A new era
Altogether, just like most countries, the aviation industry in Canada is going through a significant transition. The events of 2020 will undoubtedly have a long-lasting impact. Therefore, the market in the nation is set to have a new look as 2021 gets underway.
What are your thoughts about Air Canada taking on Air Transat? Do you think that this is a good move for the airline? Let us know what you think of the situation in the comment section.