Could AC Buy Transat? 16May19 Update: AC enters into agreement to buy Transat
Aug 12, 2019, 9:24 am
#257
Join Date: Dec 2008
Location: Delta, BC
Posts: 1,646
Sadly you are probably right - but that is an indication of how off-base the Competition Bureau and anti-trust regulation is in Canada. If AC can get away with this, I can't see how they could block any merger in Canada. If there was a proposed three-way tie between Bell, Telus and Rogers - the regulators would say no problem, nothing to see here. 
I really hope they grow a pair.
I really hope they grow a pair.
Your example of Bell, Telus, Rogers is probably the least likely example as the Competition Bureau has made several veiled announcements that imply any merger between those 3 dominant carriers would be unlikely to gain approval.
The closest case to what we have happening with AC and Transat is with First Air, Air North and Calm Air; although, the market and dynamics of the northern air travel market are so unique that I'm doubtful it provides a useful reference case.
Aug 12, 2019, 12:01 pm
#258
FlyerTalk Evangelist
Join Date: Mar 2005
Location: YYZ
Programs: AC*SE 2MM
Posts: 16,646
The Competition Bureau isn't quite that blase about mergers. They've either applied for orders or negotiated changes to mergers before, where market concentration would result (e.g. Sobeys purchase of Safeway Canada that ended up with a divestment of a minimum of 23 stores in the West to preserve grocery competition).
Your example of Bell, Telus, Rogers is probably the least likely example as the Competition Bureau has made several veiled announcements that imply any merger between those 3 dominant carriers would be unlikely to gain approval.
The closest case to what we have happening with AC and Transat is with First Air, Air North and Calm Air; although, the market and dynamics of the northern air travel market are so unique that I'm doubtful it provides a useful reference case.
Your example of Bell, Telus, Rogers is probably the least likely example as the Competition Bureau has made several veiled announcements that imply any merger between those 3 dominant carriers would be unlikely to gain approval.
The closest case to what we have happening with AC and Transat is with First Air, Air North and Calm Air; although, the market and dynamics of the northern air travel market are so unique that I'm doubtful it provides a useful reference case.
AC and Transat are the #1 and #2 players on the Canada - Transatlantic and Canada - "South" routes. Allowing this would be like allowing Save-On and Safeway to merge in the west with no store divestitures.
Aug 12, 2019, 12:49 pm
#259
Join Date: May 2015
Location: Vancouver
Programs: Aeroplan, Mileage Plus, WestJet Gold, AMEX Plat
Posts: 2,026
I'm not sure if the prospective buyer for WS want to improve it , or turn a billion dollars into a million dollars. I can say that, personally, that not being a member of a global partnership is a benchmark of even considering them. It obviously far more subtle than that, but implies a few other checkboxes have been checked . Porter... all the power to Toronto Island Airlines, but its not worth my consideration.
I don't see how the Transat deal influences either of those dynamics, however.
I don't see how the Transat deal influences either of those dynamics, however.
From a competition perspective across the Atlantic you have to look at Air Canada in combination with all of the airlines that it has special permission for market co-ordination. From a competition perspective this is a a merger between Air Canada (with Lufthansa /w children and United) merging with Air Transat.
WestJet has antitrust status in the works with Delta, it has codeshare with KLM and AF. WS is slowly building out similar commercial arrangement with the other Skyteam members.
In the west there is clear competition in the east its harder to see a parallel unless an alliance has some domestic partner.
Aug 12, 2019, 12:52 pm
#260
Join Date: May 2015
Location: Vancouver
Programs: Aeroplan, Mileage Plus, WestJet Gold, AMEX Plat
Posts: 2,026
I'm sure you are right with reqards to the telecom sector - that was a slight exaggeration on my part.
AC and Transat are the #1 and #2 players on the Canada - Transatlantic and Canada - "South" routes. Allowing this would be like allowing Save-On and Safeway to merge in the west with no store divestitures.
AC and Transat are the #1 and #2 players on the Canada - Transatlantic and Canada - "South" routes. Allowing this would be like allowing Save-On and Safeway to merge in the west with no store divestitures.
In the case of Sobeys the biggest issue was Vancouver Island where it would have had Thrifty Foods and Safeway as the only viable operators in certain markets. In that case it forced them to open up locations to permit Save-On-Food who had no presence at all to enter the market.
Aug 12, 2019, 4:02 pm
#261
Suspended
Join Date: Sep 2014
Programs: AC SE100K-1MM, NH, DL, AA, BA, Global Entry/Nexus, APEC..
Posts: 18,877
Financial Post - August 12, 2019 4:17 PM EDT
'Thank God for Mach': Air Canada raises Transat offer as Quebec regulator shuts down defiant rival's bid
"The competition side could be tricky, as the combined company would have more than 60 per cent of the market share on some routes across the Atlantic"
Full article
https://business.financialpost.com/t...ant-rivals-bid
'Thank God for Mach': Air Canada raises Transat offer as Quebec regulator shuts down defiant rival's bid
"The competition side could be tricky, as the combined company would have more than 60 per cent of the market share on some routes across the Atlantic"
Full article
https://business.financialpost.com/t...ant-rivals-bid
Aug 12, 2019, 7:33 pm
#262
Join Date: Aug 2018
Location: YYC
Programs: Air Canada SE100K, Westjet Platinum, Marriott Platinum Elite, NEXUS
Posts: 144
Sadly you are probably right - but that is an indication of how off-base the Competition Bureau and anti-trust regulation is in Canada. If AC can get away with this, I can't see how they could block any merger in Canada. If there was a proposed three-way tie between Bell, Telus and Rogers - the regulators would say no problem, nothing to see here.
I really hope they grow a pair.
I really hope they grow a pair.
The problem in Canada is not that the competition bureau is gutless, but the high cost of running an airline vs other jurisdictions. Airport rents, fuel taxes, etc are very high vs the US. This prevents new competitors from starting up in Canada. If this were not the case, investors would be pouring money into the sector. Also keep in mind Canada is only 37M people (or whatever it is today). There is a limited customer base, which is why AC is targeting US travellers.
The Canadian airline industry is very healthy today vs back in the 80s, 90s, and early 2000s. I would never want to return to those days. If that means prices are higher, but stabilized, so be it.
Aug 13, 2019, 8:37 am
#263
Join Date: Jun 2011
Location: Montreal
Posts: 221
According to TVA, there are rumours that both Westjet and Air France are interested in bidding for Air Transat, no details on whether or not this interest was before AC raised their offer for TS
https://www.tvanouvelles.ca/2019/08/...es-par-transat
https://www.tvanouvelles.ca/2019/08/...es-par-transat
Aug 13, 2019, 10:01 am
#264
A FlyerTalk Posting Legend
Join Date: May 2002
Location: YEG
Programs: HH Silver
Posts: 56,446
According to TVA, there are rumours that both Westjet and Air France are interested in bidding for Air Transat, no details on whether or not this interest was before AC raised their offer for TS
https://www.tvanouvelles.ca/2019/08/...es-par-transat
https://www.tvanouvelles.ca/2019/08/...es-par-transat
Aug 13, 2019, 1:58 pm
#266
Join Date: May 2015
Location: Vancouver
Programs: Aeroplan, Mileage Plus, WestJet Gold, AMEX Plat
Posts: 2,026
As is expected. Air France, KLM and WestJet partnership is growing deeper. An interest in AirTransat is interesting.
The demographic that AirTransat is typically going after is more WestJets cup of team. The geography that Air France is most interested in (France-Canada) has AirTransat written all over it.
I wonder if WestJet was distracted with going private and now that is in hand just started to notice what Air Transat was up to. I agree it may be to late, but it would have been a nice fit. Perhaps at this point all they can hope to do is make some noise and force Air Canada to spend more money on close the deal.
The demographic that AirTransat is typically going after is more WestJets cup of team. The geography that Air France is most interested in (France-Canada) has AirTransat written all over it.
I wonder if WestJet was distracted with going private and now that is in hand just started to notice what Air Transat was up to. I agree it may be to late, but it would have been a nice fit. Perhaps at this point all they can hope to do is make some noise and force Air Canada to spend more money on close the deal.
Aug 13, 2019, 4:38 pm
#268
Join Date: Apr 2016
Location: YHZ/YQM
Programs: Aeroplan
Posts: 1,618
Yeah, I can see the powers that be thinking that it is more important to keep it HQ'd in Quebec than to have an actual competitive landscape to keep the prices from skyrocketing.