European Union regulators are suspending their investigation into Air Canada’s proposed purchase of Transat AT pending the arrival of more data from the two Canadian travel companies. The four-month investigation into the $720-million deal is 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 origin and destination city pairs between the two jurisdictions.
Air Canada says that “it is typical of this process to ‘stop the clock’ to allow more time” to submit information. Tour operator Transat, which owns Air Transat, says dates have been pushed “slightly” beyond the initial September deadline as a result.
In March the Canadian Competition Bureau said that eliminating the rivalry between the carriers would discourage competition by prompting higher fares and fewer services, ultimately resulting in less travel by Canadians on a range of competing routes. The takeover would give Air Canada control of more than 60 percent of transatlantic air travel from Canada and 45 percent of passenger capacity to sun destinations, according to the federal agency’s report.
Transat has said it expects to close the deal in the fourth quarter of the year.
What’s happening elsewhere…
Money matters
American Airlines will try to raise US $3.5 billion to offset the cash it’s burning through with airports still largely empty. The Texas carrier will offer $1.5 billion in senior secured notes and it’s taking out a new loan of $500 million, due in 2024. American is raising another $1.5 billion through the sale of shares and convertible senior notes, the latter due the following year.
TripAdvisor said Monday that it had US $693 million of cash and cash equivalents at the end of last month, down $105 million from the end of March. It is looking at how to best raise new funds. The travel service recorded only 33% and 45% of the unique visitors that it had last year in April and May. That trend began to bend the other way in May, when the number of unique users rose about 38% from the previous month.
Alaska Airlines said Monday that June revenue will be down about 80% from a year ago, but that’s better than April’s 87% decline and May’s 83% drop.
Slow going
The Transportation Security Administration screened more than a half-million people four days in a row (thru Sunday) for the first time since March 18-21, but numbers are still down 78% from a year ago.
Cruising on hold till mid-September
There is a little more clarity on when the cruise industry will return. Cruise Lines International Association announced all member cruise lines will extend cruise cancellations from US ports until at least September 15. The CDC’s ‘no sail’ order is in effect until late July, but there is still much work to be done before large cruise ships can safely resume operations Carnival Cruise Line however, announced that it has extended its operational pause in North America through Sept. 30
“Due to the ongoing situation within the US related to Covid-19, CLIA member cruise lines have decided to voluntarily extend the period of suspended passenger operations,” CLIA said in a release.
The association says it will ‘err on the side of caution’ before announcing a restart date and health and safety protocols are still being developed.
CLIA members carry about 95% of the world’s ocean cruise passengers. CLIA says every day cruise operations in the US are suspended results in a loss of about $110 million in economic activity.
Pullmantur Cruceros—a joint venture between Spain’s Cruises Investment Holding and Royal Caribbean Cruises Ltd. has become the first cruise line to fall victim to the worldwide cruise lockdown. The three-ship fleet which included the former RCL ships Sovereign and Monarch of the Seas declared insolvency in filings to Spanish authorities.
Cruises Investment Holding owns 51 percent of the line, and RCL owns the remaining 49 percent of the company that had been struggling even before the pandemic shut down cruising in March. Read more in The Cruisington Times
Around the world
Morocco will reopen cafes, restaurants, sports clubs, and beaches starting Wednesday and allow the resumption of domestic air travel and travel between cities. Tangier, Marrakech, Kenitra and the town of Larache will remain in lockdown, because of local clusters of COVID-19.
Travel restrictions wiped out nearly all travel revenue for Greece in April, with Bank of Greece figures showing a nearly 99% decline for the month compared with last year. Greece depends heavily on tourism, which accounts for around 20% of gross domestic product.
Disneyland Paris will begin to reopen on July 15. The park said Monday that the reopening will be phased and “deliberate,” with stepped up safety measures for its workers and guests. Face masks will be required for all visitors 11 and older. Park capacity will be limited. Disney plans to reopen its parks in Florida and California next month.