The Canadian government has approved Air Canada’s acquisition of Transat, subject to certain conditions including preserving the Transat AT head office and brand in Quebec, and “Measures to facilitate and encourage other airlines to take up former Transat AT routes to Europe”.

In a statement Transport Canada said that “The Covid-19 pandemic was a key factor in the final decision”, with the Honourable Omar Alghabra, Minister of Transport commenting:

“Given the devastating impact of the Covid-19 pandemic on the air industry, the proposed purchase of Transat AT by Air Canada will bring greater stability to Canada’s air transport market.

“It will be accompanied by strict conditions which will support future international competition, connectivity and protect jobs. We are confident these measures will be beneficial to travellers and the industry as a whole.”

But rival Canadian airline Westjet said that the decision showed the country was “closed to competition”.

“This decision shows blatant disregard for all Canadians who believe in healthy competition,” said Ed Sims, Westjet President and CEO. “When Canadians look to explore the world and reunite with family and friends once again, they will face fewer choices and higher fares.”

“It is hard to imagine a deal as anti-competitive in any industry where the number one player buys number three without meaningful remedies,” said Sims. “This is a serious setback to Canada’s economy. The Competition Bureau themselves described such cosmetic remedies as inadequate. Canadians should be profoundly disappointed.”

Approval is also required from the European Commission before the takeover can be finalised, with Transat stating that “a decision of the Commission is now expected to be rendered in the first half of 2021”.

Earlier this month Air Transat suspended all regular passenger services until the end of April, following new arrivals rules introduced by the Canadian government.

Air Transat suspends operations until April 30,,