AC-TS Merger Gets Support from Sunwing, Criticism from Bloc Québécois
Anna Kroupina, Open Jaw

The Bloc Québécois is concerned that Air Canada’s proposed purchase of tour operator Transat would result in less competition and reduced choice for consumers.

Meanwhile, the transaction has won support from an unlikely source and direct rival – the head of leisure carrier Sunwing Airlines Inc, reports the Globe and Mail

The acquisition would be good for Canada’s domestic aviation industry, bolstering Air Canada’s global clout amid heightened competition with foreign airlines, Sunwing CEO Stephen Hunter told the Globe.

He said Air Canada’s takeover of Transat would ensure Canada’s main airline can withstand competition from other global carriers, most of which have received billions in loans, grants and other aid from their home governments and are increasing their shares of the Canadian market as Canadian carriers slash routes to reduce their losses and survive the pandemic.

“Unless we want Canada completely controlled by foreign carriers, we have to allow this,” Hunter said. “Our main fear is, and what we’ve got to watch out for, is all the European and other international carriers coming in and taking market share away from Canadian airlines. And this is one way to defend them.”

Hunter said he supports the deal even though Sunwing and Transat are direct rivals.

The Bloc Quebecois is opposed to the deal. “The issue of competition, in the event that the transaction is concluded according to Air Canada’s wishes, raises several issues of concern for Quebec and the European Union. This would have a direct effect on prices in addition to reducing the supply and choices available to consumers. Even more serious, it would place Air Canada in a dominant position vis-à-vis other air carriers,” wrote MP Xavier Barsalou‑Duval, spokesperson for the Bloc Québécois on Transport, Infrastructures and Communities wrote to the European Commission which is scrutinizing whether the deal would reduce competition within the EU. 

Barsalou‑Duval also criticized Air Transat’s board of directors for having concealed from shareholders the existence of an offer other than that of Air Canada, as well as Transport Canada’s alleged lack of transparency in its own analysis.

Barsalou‑Duval said all requests for information by the Bloc “have ended in a refusal or by improperly crossed out documents from which it is impossible to extract anything.” 

“It’s frustrating to see the Canadian government going out of its way to hide such important information from us,” he said.

The Bloc’s letter also brought up a report by the Competition Bureau of Canada, released in MAR 2020, which raised concerns the takeover would harm consumer choice, noting the combined companies would command 60 per cent of transatlantic travel from Canada and reduced competition or a monopoly on 83 routes between Canada and Europe, Mexico, Central America, the Caribbean, Florida and South America.

“The financial difficulties that airlines are currently experiencing should not be used as an excuse for monopoly practices that will have serious long-term consequences and that will endure well beyond the COVID-19 pandemic,” Barsalou‑Duval wrote.

Air Canada’s $180-million takeover of Transat is awaiting approval by the EC and Canada’s federal cabinet. Decisions are expected in the coming days or weeks. The cut-off date on which the deal could fall apart without agreement from both companies is 15FEB.

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ’s newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she’s new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.

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