European Commission announced an in-depth investigation to assess the proposed acquisition of Transat by Air Canada. The Commission determined that the proposed action could reduce competition in passenger air transport services between the European Economic Area (EEA) and Canada.
Air Canada, headquartered in Canada, is a global airline company that provides scheduled passenger air transport services in Canada and internationally. On the other hand, Transat, also headquartered in Canada, is the parent company of Air Transat which provides scheduled passenger air transport services in Canada and internationally. Air Canada and Transat are respectively the first and second largest providers of scheduled passenger air transport services between the EEA and Canada. Together, their networks comprise 29 routes between Europe and Canada.
The Commission found that there has been a stiff competition between Transat and Air Canada in passenger air transport services between EEA and Canada historically. On the other hand, it was stated that the Canadian airline company WestJet, which started operating in the market by opening up to the EEA, is unlikely to impose an adequate competitive restriction on the merged company regarding the R&D that the Commission finds problematic.
As a result, the Commission announced that it will carry out an in-depth investigation into the effects of the proposed transaction to determine whether it is likely to significantly reduce effective competition.
(European Commission - 25 May 2020)
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