Thoughts on the Potential of Air Transat by Air Canada

A few days ago, Air Canada and Air Transat announced that they are in exclusive negotiations for Air Canada to buyout Air Transat.

I’m somewhat torn by this announcement. So I’ll share my pros and cons regarding this deal.

Pros

On a global scale, I would love to see Air Canada strengthen its product so that it can be more competitive internationally. So from this perspective, it is probably a good move that they buyout Aeroplan and expand its reach. It would be amazing to see Air Canada as one of the top airlines of the world.

This might actually be a smart business move by Air Canada to acquire more assets and be more profitable. Probably a good move for shareholders. I just hope that it frees up some funds to improve other areas of their product.

Cons

On a domestic scale, I’m nervous about Air Canada gaining too much monopoly, putting other Canadian airlines in jeopardy. We all saw what happened to Canadian Airlines which merged with Air Canada in 2001. I guess I just do not trust that if Air Canada became more profitable that it would improve their product and award program.

Does anyone else feel the way I do? That Air Canada may be more focused on profits and competing globally?

Conclusion

When it was first announced that Aeroplan was breaking up with Air Canada, and that major changes were going to happen in June 2020, it felt so long away, but it is actually fast approaching, as we are just over a year away.

So either way, whether Air Canada buys-out Air Transat or not, one thing is clear, Air Canada is trying to expand its business ahead of June 2020.

Let’s just hope that it also comes with an frequent flyer program than the current Aeroplan.