Report of the Commissioner of Competition - Transat reiterates its confidence in the transaction with Air Canada, which is currently undergoing a public interest assessment by the federal government

"We must look at the Competition Bureau report with a bit of perspective, and not draw any direct conclusions from it with regard to the final decision."

– Jean-Marc Eustache

MONTREAL, March 27, 2020 /CNW Telbec/ - Transat A.T. Inc. has taken note of the Competition Bureau's advisory report, made public today. This report does not affect the company's confidence in the transaction with Air Canada, which will produce many long-term benefits for all stakeholders.

With the transaction now the subject of a public interest assessment being conducted by Transport Canada, the report of the Commissioner of Competition will be one of the elements of a broader analysis that will include stakeholders' proposals for fostering competition, the findings of the public consultations, and an analysis of the transaction's positive impacts on travellers, employment, tourism and the international positioning of Canadian businesses. The Transport Canada assessment will be submitted to Honourable Marc Garneau, Transport Minister, in early May.

"We must look at the Competition Bureau report with a bit of perspective, and not draw any direct conclusions from it with regard to the final decision," says Transat President and Chief Executive Officer Jean-Marc Eustache. "The Commissioner's role is limited to studying the impacts on competition in the marketplace; in other words, identifying potential difficulties, without necessarily contemplating what solutions or mitigation measures might be implemented, and without taking the public interest more broadly into account. Transport Canada's assessment will provide a more comprehensive overview of the nuts and bolts of the transaction and of all the benefits for the Canadian public and economy."  

Mr. Eustache concludes: "Particularly against the background of the COVID-19 crisis, our transaction requires a broad perspective that takes into account the company's future, the protection of jobs, the advantages for travellers and the interests of all our other stakeholders, including our investors, our partners, and the communities where we operate."

Transat had very little time to study or respond to the advisory report's conclusions and did not have access to the documents or studies on which it is based, nor even to the identity of all of their authors. Additionally, the COVID-19 pandemic that is currently having a devastating impact on the operations of the world's airlines is calling into question the relevance of any analysis conducted prior to its outbreak, as the Bureau itself points out.

Nevertheless, Transat wishes to reiterate that the international air transportation market is increasingly integrated and highly competitive and experiences constant capacity fluctuations that cause price fluctuations. The new company envisioned by the merger would remain a modest player in this market dominated by large international airlines that also operate on routes between Europe and Canada. In the context of the rebuilding of the market following the current crisis, the existence of such a player in Quebec and Canada would be a major asset.

Transat also believes that the report takes inadequate account of the prominence of the existing players in their home markets, the market's receptiveness to newly arriving players and the role of indirect and multimodal routes, particularly where leisure travel is concerned.

The merger of Transat and Air Canada, two complementary travel companies, will improve customers' choices and opportunities. Travellers will be benefit from access to new destinations, more flight connections and frequencies, reduced connection times and a greater selection of holiday travel options. This merger will produce a company that is more efficient and competitive internationally, for the benefit of all Canadians.

If the required regulatory approvals are obtained and the conditions fulfilled, the transaction is expected to close in the second quarter of the 2020 calendar year.

On March 18, during the COVID-19 pandemic, Transat announced the gradual suspension of all of its flights until April 30. Last Monday, the company confirmed that it has temporarily laid off 70% of its employees in the past week.

SOURCE Transat A.T. Inc.