MONTREAL -- The Bloc Québécois and head Westjet executive are both calling out Minister of Transport Omar Alghabra's decision to approve the sale of Transat A.T. to Air Canada.
On Thursday, the minister said the proposed acquisition will bring greater stability to the Canadian air transport market and that it will be accompanied by strict terms that will promote international competition and connectivity, and protect jobs.
Bloc Québécois Transport, Infrastructure and Communities spokesperson Xavier Barsalou-Duval said, however, that by ignoring a rival offer, Alghabra acted as if he had no other buyer for Air Transat, sacrificing both competition and a Quebec flagship.
Businessman and former PQ leader Pierre Karl Peladeau personally submitted an unsolicited proposal for $5 per share just before the holiday season.
The Bloc MP for Pierre-Boucher-Les Patriotes-Vercheres said that there will still be an aviation sector after the COVID-19 pandemic, and that if the health crisis is temporary, the disappearance of Air Transat will be permanent.
He also criticized the Canadian government for showing total inaction over the past year which has exacerbated financial difficulties for air carriers and for letting Air Canada buy Air Transat for a song.
On his end, Westjet president and CEO Ed Sims wrote in a news release that the government's endorsement of the transaction shows blatant contempt for all Canadians who believe in healthy competition.
He predicts that after the COVID-19 crisis, Canadians will face fewer choices and higher fares for air travel. He also said he found it difficult to imagine such an anti-competitive deal.
Barsalou-Duval said an offer to purchase was also filed for the carrier Sunwing and according to him, it was probably made by WestJet.
The Bloc member concludes that if that hypothetical transaction were to go through, Canada would go from four carriers to a duopoly that would hold 95 per cent of the market share of flights heading to sunny destinations, with the inevitable consequence for consumers of higher prices.
Barsalou-Duval wonders how Alghabra could refuse the purchase of Sunwing by WestJet after authorizing the sale of Transat A.T. to Air Canada.
Last December, the shareholders of Transat A.T. voted in favour of Air Canada's revised proposal at $5 per share. The previous offer was $18 per share in an offer valued at $720 million, but that had been revised downwards in the wake of the pandemic.
The European Commission's approval for this transaction is still pending. The commission has already expressed its concern about the effects of the merger on 33 routes between Canada and Europe.
The deadline for the sale of Transat A.T. to Air Canada has been set for next Monday, but that deadline can be pushed back if the two companies come to an agreement.
-- this report by The Canadian Press was first published Feb. 12, 2021.