European Union regulators are suspending their investigation into Air Canada’s proposed purchase of Transat AT pending the arrival of more data from the two Canadian travel companies.
The European Commission’s antitrust body launched the four-month investigation into the $720-million deal in May to determine whether it would hurt competition in Canadian and European markets, leading to higher prices, diminished quality or less choice for Atlantic travellers.
A preliminary review by the EU executive branch found that the would-be transaction could significantly reduce competition on 33 origin and destination city pairs between the two jurisdictions.
Air Canada says that “it is typical of this process to ‘stop the clock’ to allow more time” to submit information. Tour operator Transat, which owns Air Transat, says dates have been pushed “slightly” beyond the initial September deadline as a result.
The Canadian Competition Bureau warned in March — based on information collected prior to the COVID-19 pandemic — that eliminating the rivalry between the two Montreal-based carriers would discourage competition by prompting higher fares and fewer services, ultimately resulting in less travel by Canadians on a range of competing routes.
The takeover would give Air Canada control of more than 60 per cent of transatlantic air travel from Canada and 45 per cent of passenger capacity to sun destinations, according to the federal agency’s report.
Transat has said it expects to close the deal in the fourth quarter of the year.
This report by The Canadian Press was first published June 19, 2020.
Companies in this story: (TSX:AC, TSX:TRZ)
The Canadian Press