Air Canada will face a competition probe before the airline can complete its proposed acquisition of Air Transat.
Air Transat shareholders overwhelmingly voted last week in favour of the C$720 million deal, which valued the carrier at C$18-a-share.
However, Canadian transport minister, Marc Garneau, has now revealed he believes the deal raises issues of public interest and will require additional scrutiny.
The move will be assessed for its impact on airline competition before it can be approved, he explained.
Consultations will begin on November 4th and will involve the air industry and public, among others, as well as an “analysis of the economic benefits or challenges resulting from the proposed transaction,” Garneau added.
The government has 250 days, or until May 2nd next year, to complete the assessment.
The deal between Canada’s largest carrier and Transat, which runs leisure carrier Air Transat, would give Transat a 60 per cent market share of select trans-Atlantic routes to and from Canada.
The deal will also require European regulatory approvals.