The announcement by the management of Canadian carrier Air Transat of discussions with Air Canada for its potential recovery could lead to a further concentration of supply in a country where the national airline is currently the only major premium carrier. Air Transat's model, on the other hand, is closer to that of a hybrid airline, with a very wide range of leisure flights to holiday destinations. But that's not all. Visit Canada's second-largest international carrier is also a real alternative for travellers - including business travellers - with a Premium Economy (Club Class) offer that can be found throughout the airline's network, from domestic to routes to the United States and Europe.
Discussions are currently underway at Air Canada the opportunity to assess Air Transat's situation for 30 days before making a decision. Even if nothing is yet definitive, it seems that there is little alternative for the subsidiary of the Transat group. Only the Quebec government could step up to the plate by financially supporting another buyer, undoubtedly of Quebec origin, in order to bolster the airline's French-speaking identity. Otherwise, Air Canada would have to pay 520 million Canadian dollars (348 million euros) to acquire the company.
To explain this takeover2018 was a difficult year for Air Transat due to the increase in paraffin prices and currency fluctuations. As a result, the company recorded an adjusted net loss of 24.5 million Canadian dollars (16 million euros). In the first quarter of 2019, this adjusted net loss widened further, rising to 38 million C$ from 29 million in the same period of 2018. The airline carried five million passengers last year, just 10% of the traffic recorded by Air Canada.
Air Transat, important in Europe
While Air Transat may appear to be a relatively small airline compared to its competitor, it still plays an important role in the airline industry. a leading role on the Canada-Europe routes. Its market share in seat capacity in this sector is estimated at 20%.
If the merger becomes effective, Air Canada's share of the transatlantic market would amount to 63% of all capacity offered. In Europe, Air Transat connects Montreal and Toronto with six destinations all year round, including Paris CDG. If seasonal summer flights are added, the airline serves 25 European destinations.
In France, Air Transat connects Montreal with Basel/Mulhouse, Bordeaux, Lyon, Marseille, Nantes, Nice, Paris and Toulouse during the summer season. It also has a partnership with the SNCF to serve the French regions from the Roissy TGV station. Air Transat is in competition with Air Canada and Air Canada Rouge to Paris, Lyon, Marseille, Nice and from July to Bordeaux. If the merger becomes effective, it is clear that the duplication between the two airlines will disappear. As will probably be the Paris CDG-Montreal and perhaps the Paris CDG-Quebec flight, which is operated exclusively by Air Transat.
All the new routes that the airline was planning to launch with the arrival this year of the first models of an order for 15 Airbus A321neo LR (199 seats), a more efficient aircraft, are also threatened. suitable for secondary destinations on the transatlantic.
And finally.., the disappearance of Air Transat also raises fears of a price surge which, according to some experts, could result in fare increases of 30% to 40%. Even if, in the long term, new Canadian low-cost and ultra-low-cost carriers are planning to enter the transatlantic battle.
