Air Canada has entered into a tentative agreement to purchase
Quebec-based airline and tour operator Transat A.T.
The companies have agreed to a 30-day period of exclusive
negotiations. They have also signed a letter-of-intent for Air Canada to
purchase Transat for $520 million.
Air Canada CEO Calin Rovenescu said that the acquisition
would be a boon to Canadian travelers.
"The acquisition presents a unique opportunity to
compete with the very best in the world when it comes to leisure travel,"
he said in a statement. "It will also allow us to further grow our hub at
Montreal-Trudeau Airport, where we have added 35 new routes since 2012 to the
benefit of the Montreal and Quebec communities, and from which we carried 10
million customers in 2018 alone."
Montreal-based Air Transat flies to 60 destinations in 25
countries. The leisure-focused airline carries approximately 5 million
Transat's tour operator unit sells vacation packages and leisure-focused
Transat said Thursday that operations are continuing at
present without change.
The proposed acquisition remains subject to finalization of
the terms, as well as shareholder and regulatory approvals.
The announcement is the second significant one in Canada's
airline sector this week. On Tuesday Canadian private equity firm Onex signed a
deal to buy WestJet, Canada's second largest airline, for $5 billion Canadian