Question
The European Commission has opened an investigation to assess the proposed acquisition of Transat by Air Canada, under the EU Merger Regulation. The Commission is
The European Commission has opened an investigation to assess the proposed acquisition of Transat by Air Canada, under the EU Merger Regulation. The Commission is concerned that the proposed transaction may reduce competition in the passenger air transport services between Europe and Canada. Air Canada and Transat are respectively the first and second largest providers of scheduled passenger air transport services between Europe and Canada. The parties bringing the merger could potentially bring up efficiency defense to justify the merger. Please explain what argument they would be making and how an economist would evaluate that argument in supporting (or not) the merger. Use a chart to illustrate.
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