The two companies have agreed to negotiate exclusively for the next 30 days. Air Transat employs about 5,000 people and owns 40 planes. If the two companies reach a deal, it will need to be approved by shareholders, and potentially Canada’s Competition Bureau. (Globe and Mail)

Talking point: The news comes three days after private-equity firm Onex announced it would pay $3.5 billion to buy WestJet. WestJet is trying to lure lucrative business travellers away from Air Canada, while simultaneously competing with growing discount carriers Flair Airlines and Enerjet. This deal would allow Air Canada to add more flights in the lower end of the market, particularly in the lucrative markets of Mexico and Central America, where Air Transat and WestJet both have 22 per cent market share, and Air Canada has 24 per cent. The purchase would also shore up the European market for Air Canada, of which it has a 43 per cent share in, compared to second-place Air Transat’s 20 per cent. WestJet has just six per cent.