The federal government has approved Air Canada’s $190-million purchase of Transat A.T., with some conditions. Transport Minister Omar Alghabra says the government concluded the purchase is in the public interest after considering a range of factors, including level of service, wider social and economic implications, the financial health of the air transportation sector, and competition.

The COVID-19 pandemic was also a factor since Montreal-based Transat noted it may not be able to continue on its own because of the significant financial challenges.

The government notes that the acquisition is the best outcome for workers, Canadians travellers and other industries that rely on air transport.

Transat shareholders approved the revised deal, which was a significant decrease from $720 million.

Air Canada must preserve the Transat head office and brand in Quebec, maintain 1,500 employees for Transat’s leisure travel business, conduct aircraft maintenance in Canada while prioritizing contracts in Quebec, have a price monitoring mechanism and launch new destinations within the first five years.

“Given the devastating impact of the COVID-19 pandemic on the air industry, the proposed purchase of Transat A.T. by Air Canada will bring greater stability to Canada’s air transport market. It will be accompanied by strict conditions which will support future international competition, connectivity and protect jobs. We are confident these measures will be beneficial to travellers and the industry as a whole,” said Alghabra.