Air Canada’s acquisition of tour operator Transat AT Inc is up in the air after the airline said it wouldn’t give the deal any more time to go through. An agreement was meant to be signed by February 15, but as the deal has not yet been approved by the European Union, the terms specify that both parties now have the right to terminate the agreement.
In a statement released earlier this week by Transat, both are continuing discussions about possible amendments to the existing arrangement, but there is no guarantee that agreement would be reached or that the existing one will not be terminated altogether. The deal had been approved by the Canadian government on February 11, but the cold feet by the country’s biggest airline is likely connected to the difficulties currently being faced by the airline industry.
Air Canada recently announced that it was temporarily laying off 1,500 employees and an unspecified number of management staff in response to tougher travel restrictions. It is also suspending services on 17 routes to international destinations including Dublin until at least April 30. Transat has suspended all of its operations until the same date.