Air Transat and Air Canada aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson

Air Transat and Air Canada aircraft are seen on the tarmac at Montreal-Trudeau International Airport in Montreal, on Wednesday, April 8, 2020. THE CANADIAN PRESS/Paul Chiasson

Air Canada, Transat acquisition deal up in the air as deadline expires

Both parties now have the right to terminate the agreement at any time

Air Canada’s acquisition of Transat AT Inc. is up in the air after Canada’s largest airline said it will not allow more time for the deal to go through.

The acquisition was set to be completed by Feb. 15, but since the deal has not yet received approval from the European Union, both parties now have the right to terminate the agreement at any time, Transat said in a statement Tuesday morning.

“Transat and Air Canada are continuing their discussions regarding potential amendments to the arrangement agreement that may be required,” Transat said.

Despite the discussions, there is no guarantee that any new agreement will be reached, or that the existing one will not be terminated altogether, Transat said. The transaction had previously been approved by the Canadian government on Feb. 11.

Transat’s stock was down 9.13 per cent in morning trading on the S&P/TSX composite index, while Air Canada shares were up 2.64 per cent.

Air Canada’s decision not to extend the date for the transaction comes amid an uncertain and rapidly changing business environment for the airline industry.

Canada’s airlines recently suspended all flights to Mexico and the Caribbean until April 30 at the request of the federal government, in addition to a mandatory hotel quarantine for air travellers entering Canada, which goes into effect on Feb. 22.

The restrictions further hampered travel demand and forced widespread layoffs and route cuts. Transat, for its part, has suspended virtually all of its operations until April 30.

Calin Rovinescu, Air Canada’s former CEO and president, said during the company’s most recent earnings call on Feb. 12 that he was encouraged by signs of progress in talks between the industry and the federal government regarding a bailout for the airline sector.

Rovinescu also said that he expected the federal government to roll out a co-ordinated testing program at airports that would replace some aspects of the current quarantine measures.

RELATED: Air Canada to temporarily cut at least 1,500 jobs, suspend 17 foreign routes

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Low interest rates have acted as a catalyst for the pandemic real estate market. (THE CANADIAN PRESS/Graeme Roy)
Real estate sales surging across Greater Victoria but risks lie ahead

Single family home prices jump nine per cent over past year while condo values remain stable

Passengers in rows 13 to 19 on Air Canada Jazz flight 8069 from Vancouver to Victoria Feb. 28 were exposed to a case of COVID-19. (THE CANADIAN PRESS/Nathan Denette)
COVID-19 exposure found on flight from Vancouver to Victoria

Passengers in rows 13 to 19 on Air Canada Jazz flight 8069 Feb. 28 affected

Environment Canada has issued a wind warning for Greater Victoria, with winds expected to get up to 70 km/h Friday morning. (Don Denton/Black Press Media)
Wind warning promises blustery Friday for Greater Victoria

Winds up to 70 km/h expected Friday morning

One person is dead after a camper van caught fire Thursday morning in Victoria's Beacon Hill Park. (Nina Grossman/News Staff)
UPDATED: One person dead after vehicle fire in Beacon Hill Park

Investigation into Victoria death in early stages

Darcy Rhodes (left) says his grandfather’s bonsai trees are his ‘babies.’ (Courtesy of Tamara Bond)
B.C. Health Minister Adrian Dix and provincial health officer Dr. Bonnie Henry head for the B.C. legislature press theatre to give a daily update on the COVID-19 pandemic, April 6, 2020. (B.C. government)
B.C. nears 300,000 COVID-19 vaccinations, essential workers next

564 new cases, four deaths, no new outbreaks Thursday

Anyone with information on any of these individuals is asked to call 1-800-222-TIPS (8477) or visit the website victoriacrimestoppers.ca for more information.
Greater Victoria Crime Stoppers wanted list for the week of March 2

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

(Black Press Media file photo)
POLL: How’s your butter?

Recent reports have some Canadians giving a second look to one of… Continue reading

(Pxhere)
B.C. research reveals how pandemic has changed attitudes towards sex, health services

CDC survey shows that 35 per cent of people were worried about being judged

The intersection of Melrose Street and Third Avenue. (ELENA RARDON / ALBERNI VALLEY NEWS)
Suspect in custody after two pedestrians struck in Port Alberni hit and run

RCMP asking for video footage, credit witnesses for quick arrest

(National Emergency Management Agency)
No tsunami risk to B.C. from powerful New Zealand earthquake: officials

An 8.1 magnitude earthquake shook the north of New Zealand Thursday morning

(AP Photo/Richard Vogel, File)
Pandemic stress, isolation key factors as to why Canadians turned to cannabis, alcohol

Study found that isolation played key role in Canadians’ substance use

Comox Valley RCMP had access to 20 Street blocked off between Cousins and Choquette avenues as they conducted a raid of a house on the block. Photo by Terry Farrell
Comox Valley RCMP raid Courtenay problem house, several arrests made

Comox Valley RCMP conducted a raid of a problem house on 20th… Continue reading

Some Canadians are finding butter harder than usual, resulting in an avalanche of social media controversy around #buttergate. (Brett Williams/The Observer)
#Buttergate: Concerns around hard butter hit small B.C. towns and beyond

Canadians find their butter was getting harder, blame palm oil in part one of this series

Most Read