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

Okanagan College, Vernon campus. (Brendan Shykora - Vernon Morning Star)
Student housing coming to Vernon, Salmon Arm

Province announces $66M for new student beds for Okanagan College campuses

A fire truck and police car park at the entrance to the Foreshore Trail about 6 p.m. on Thursday, March 4 as fire crews respond to a report of a fire farther down the trail and just above the railway tracks, between Lakeshore Road and the tracks. (Martha Wickett-Salmon Arm Observer)
Salmon Arm Fire Department quickly extinguishes fire above Foreshore Trail

Blaze started when man’s campfire catches fuel containers on fire

Sicamous will have a new locally-owned option for grabbing a bite on the go as the Snacktastic food trailer opened at the start of March. (Kelly Hesleton/Facebook)
Curbside food trailer gives Sicamous a new dining option

Snacktastic owner Dawn Backs grateful for support from family and community

A B.C. government-run cannabis retail outlet was proposed for a building to be constructed at the Salmon Arm SmartCentres site. (File photo)
Province backs away from plans for Salmon Arm cannabis store

BC Cannabis Store was proposed to be in building to be constructed at shopping centre

Provincial health officer Dr. Bonnie Henry updates B.C. on the COVID-19 situation. (B.C. government)
Dr. Bonnie Henry predicts a ‘post-pandemic world’ for B.C. this summer

‘Extending this second dose provides very high real-world protection to more people, sooner’

The Netflix logo on an iPhone. B.C. delayed imposing sales tax on digital services and sweetened carbonated beverages as part of its response to COVID-19. Those taxes take effect April 1, 2021. THE CANADIAN PRESS/AP, Matt Rourke
B.C. applies 7% sales tax on streaming, vaping, sweet drinks April 1

Measures from 2020 budget were delayed due to COVID-19

Chief Don Tom of the Tsartlip First Nation was outraged after Green MLA Adam Olsen revealed on social media that the community had been experiencing a COVID-19 outbreak – a fact the First Nation had chosen to keep private to avoid racist backlash as experienced by the Cowichan Tribes when an outbreak was declared there in January. (Black Press Media file photo)
B.C. First Nation ‘outraged’ after Green MLA reveals COVID-19 outbreak

Tsartlip First Nation chief shares concerns about racist backlash, MLA apologizes

A lawyer wears a face mask and gloves to curb the spread of COVID-19 while waiting to enter B.C. Supreme Court, in Vancouver, B.C., Friday, Aug. 28, 2020. British Columbia’s highest court has sided with the land owner in a dispute over public access to public land. THE CANADIAN PRESS/Darryl Dyck
B.C. high court finds in favour of large landowner in fight over access to pair of lakes

The Nicola Valley Fish and Game Club launched legal action after the cattle company blocked road and trail access

Prime Minister Justin Trudeau holds a press conference in Ottawa Friday, March 5, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

Premiers argue that the current amount doesn’t keep pace with yearly cost increases of about five per cent

Free Reformed Church is seen as people attend service, in Chilliwack, B.C., on Sunday, Feb. 21, 2021. Lawyers for the British Columbia government and the Justice Centre for Constitutional Freedoms are back in B.C. Supreme Court today, squaring off over the legality of COVID-19 rules that prohibit in-person religious services. THE CANADIAN PRESS/Darryl Dyck
B.C. top doctor has power to restrict access to a place during health hazard: lawyer

Under B.C.’s Public Health Act, Jacqueline Hughes says, Henry can restrict or prevent entry to a place

A vial of some of the first 500,000 of the two million Oxford-AstraZeneca COVID-19 vaccine doses that Canada has secured through a deal with the Serum Institute of India in partnership with Verity Pharma at a facility in Milton, Ont., on Wednesday, March 3, 2021. THE CANADIAN PRESS/Carlos Osorio - POOL
B.C. dentists and bus drivers want newly-approved Oxford-AstraZeneca vaccine

BC Dental Association says dentists and their teams cannot treat patients remotely

Premier John Horgan looks on during a press conference at Legislature in Victoria, B.C., on Monday, February 23, 2020. THE CANADIAN PRESS/Chad Hipolito
Premier touches on protest, housing controversy in Penticton

Protesters have said they plan to go on despite police warning

Most Read