The Canadian government has approved a deal for Air Canada to acquire smaller rival Air Transat.
The revised deal, now valued at C$190 million, was agreed in October last year in the wake of the Covid-19 shutdown of international travel.
The deal remains subject undertakings agreed to by Air Canada designed to ensure effective competition in the market.
Air Transat said approval from the European Commission was still pending, with a decision expected in the first half of the year.
“We are currently working on adjusting all of the deadlines, including our financing agreements, in order to align them with the anticipated completion of the commission’s review process,” commented Jean-Yves Leblanc, chair of the special committee of the board of directors of Transat.
Transat will discuss with Air Canada the appropriateness of extending the outside date for the consummation of the arrangement under the arrangement agreement which is set for today.
After this date, if it is not extended, the agreement will remain in effect, unless terminated by one of the parties.
Last week, Air Canada said total revenue for financial 2020 stood at C$5.8 billion, down 70 per cent from the C$13.3 billion recorded in the previous year.
The flag-carrier reported an operating loss of $3.776 billion in 2020 compared to operating income of $1.650 billion in 2019.
Unrestricted liquidity amounted to C$8 billion at the end of December.
“With the release of 2020 fourth quarter and full year results, we close the book on the bleakest year in the history of commercial aviation, after having reported several years of record results and record growth at Air Canada,” said Calin Rovinescu, chief executive of Air Canada.
“The catastrophic impact of Covid-19 and government-imposed travel restrictions and quarantines has been felt across our entire network, deeply affecting all of our stakeholders.”