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EU resumes probe into Air Canada-Transat deal amid ongoing competition concerns

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MONTREAL — European regulatory authorities have resumed their investigation into Air Canada's proposed purchase of Transat AT, giving themselves a few more months to hand down a decision.

The European Commission, which was awaiting additional data from the two Canadian travel companies, says it will reach a conclusion by Dec. 12.

The commission's antitrust body launched the investigation into the $720-million deal in May to determine whether it would hurt competition in Canadian and European markets.

A preliminary review by the EU executive branch found that the would-be transaction could significantly reduce competition on 33 routes between the two jurisdictions.

The finding aligned with concerns highlighted by Canada's Competition Bureau, which warned in March — based on information collected prior to the COVID-19 pandemic — that eliminating the rivalry between the two Montreal-based carriers would prompt pricier fares and fewer services.

The bureau said the takeover would give Air Canada control of more than 60 per cent of transatlantic air travel from Canada and 45 per cent of passenger capacity to sun destinations.

The Trudeau government has not yet announced a decision on the deal.

Transat spokesman Christophe Hennebelle says that "economic studies on competition" were among the documents submitted to European regulators.

Air Canada did not immediately reply to requests for comment.

Transat has said it expects to close the deal in the fourth quarter of the year.

This report by The Canadian Press was first published Sept. 1, 2020.

Companies in this story: (TSX:AC, TSX:TRZ)

The Canadian Press