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

Kelowna General Hospital (File photo)
One of two Kelowna General Hospital COVID-19 outbreaks declared over

One outbreak declared over after two deaths, seven cases; another outbreak remains ongoing in the hospital

The current B.C. Men’s curling champions, Rick Sawatsky (Vernon and now living and working in Kelowna, from left), Andrew Nerpin (Kelowna), Jim Cotter (Vernon) and Steve Laycock (Saskatoon), have yet to find the win column at the 2021 Tim Hortons Brier in Calgary. (Black Press - file photo)
B.C. looking for Brier victory

Team B.C. falls to 0-2 Sunday, March 7, with 10-7 loss to Wild Card 1 entry from Manitoba

Cottonwoods Care Home in Kelowna. (Google Maps)
COVID-19 outbreak declared at Kelowna care home after 12 cases noted

Two staff members and 10 residents at Cottonwoods Care Centre have tested positive for COVID-19

Kelowna’s Trinity Church will serve as one of the Central Okanagan’s three COVID-19 vaccination clinics. (Trinity Church Kelowna/Instagram)
Three COVID-19 vaccination clinics to open in the Central Okanagan

The first will open at Kelowna’s Trinity Church on March 15

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
‘It’s been a good week’: Tam hopeful on vaccines as pandemic anniversary nears

Tam says the addition of two new vaccines will help Canadians get immunized faster

Const. Allan Young. Photo: Abbotsford Police Department
Manslaughter charge laid in Nelson death of Abbotsford police officer

Allan Young died after an incident in downtown Nelson last summer

There is no true picture of how many youth in Penticton are experiencing housing instability or true homelessness. The Foundry and the city of Penticton are trying to find that out.
How many youth are experiencing homelessness in Penticton?

Foundry Penticton and the City have partnered on a youth survey open until March 13

Chelsea Ishizuka was borned and raised in Penticton but has now moved to Japan. When she found out there was a popular restaurant there named after Penticton, she had to go check it out. Here she is with the owner (right). (Facebook)
Popular restaurant in Japan named after city of Penticton

A Pentictonite now living in Tokyo discovered the eatery and the history behind its name

Coldstream’s Kalamalka Secondary has teamed up with Globox on a fundraising raffle for its graduating class of 2021. (Photo supplied)
Okanagan secondary school grads glowing over fundraiser

Kalamalka Secondary teams with company on fundraising raffle, replacing annual apple pie fundraiser

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Pictures and notes in from friends and classmates make up a memorial in support and memory of Aubrey Berry, 4, and her sister Chloe, 6, during a vigil held at Willows Beach in Oak Bay, B.C., on December 30, 2017. THE CANADIAN PRESS/Chad Hipolito
Mother of slain daughters supports recent changes to Canada’s Divorce Act

Sarah Cotton-Elliott said she believed her children took a back seat to arranging equal parenting

Most Read