The Competition Bureau announced today it has concluded that Air Canada’s proposed acquisition of Transat is likely to result in a substantial lessening or prevention of competition in the sale of air travel or vacation packages to Canadians.
The Bureau’s concerns are outlined in a report delivered to the Minister of Transport by the Commissioner of Competition. The report will inform Transport Canada’s public interest review of the proposed transaction as it relates to national transportation.
Eliminating the rivalry between these airlines would result in increased prices, less choice, decreases in service and a significant reduction in travel by Canadians on a variety of routes where their existing networks overlap.
The Bureau’s analysis determined that the effects of the transaction would apply to 83 routes, including:
- 49 overlapping routes between Canada and Europe; and
- 34 overlapping routes between Canada and sun destinations in Florida, Mexico, Central America, and the Caribbean.
The transaction also represents a merger of the only two carriers offering non-stop service on 22 of these routes.
Our assessment is based upon a forward-looking analysis using data and information collected prior to the current COVID-19 pandemic. The Bureau recognizes that the impact of these events on the Canadian airline industry appear to be significant in the near term. The ultimate impact of these events may be relevant to the Bureau’s views on the proposed transaction but it is impossible to know the full extent and duration of any impact at this time.
Transport Canada has until May 2, 2020 to complete its public interest assessment and provide it to the Minister. The final decision regarding the proposed transaction will be made by the Governor in Council (Cabinet) based on a recommendation from the Minister…