by Jim Byers
Last updated: 7:40 AM ET, Wed January 20, 2021
WestJet is asking the Liberal government to reject the proposed Air Canada-Transat takeover deal.
The Globe and Mail today reports that WestJet says Ottawa should either refuse the deal to go through as is, or at least make major modifications, including giving up some airport slots and not letting Transat customers access Air Canada's Aeroplan loyalty program.
WestJet made its case in a letter to then Transport Minister Marc Garneau on January 3.
"A fundamental element of Canada's national transportation policy is to have at least two strong national airlines," WestJet said in a summary of the document, according to the Globe. "WestJet's ability to contribute to the Alberta economy and more broadly to the Canadian economy is imperilled by the proposed transaction."
Ottawa has suggested it could rule on the AC/Transat deal in the next couple weeks. The European Union, which is worried that the deal will reduce competition on flights between Canada and Europe, is expected to make a ruling by February 9.
The AC/Transat deal is set to expire by Feb. 15 unless both sides agree to an extension.
The Globe said WestJet CEO Ed Sims sent the newspaper a note statying that, "For 25 years, WestJet has always stood for fair and transparent competition. For this reason we do not believe the proposed transaction should proceed unless the government imposes critical mitigation measures.
"An approval without significant remedies would provide Air Canada with an unprecedented government-sanctioned monopoly to the unavoidable detriment of the travelling public through higher air fares and lower service," Sims said.
Among the changes suggested by WestJet are not allowing Transat customers to access Aeroplan and forcing a combined AC/Transat to give up airport slots. The Globe story said WestJet "singled out London's Heathrow, Amsterdam's Schiphol and Toronto's Pearson airports as hubs where Air Canada's market grip would gain even greater power with the purchase of Transat. WestJet (also( wants Air Canada and Transat barred from using Pearson's Terminal 3 to ensure room for other airlines."
The AC/Transat deal is worth $180 million. Pierre Peladeau of Quebecor has made a rival bid for Transat, but Transat officials say the Air Canada deal is superior.
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