By David Ljunggren and Allison Lampert
OTTAWA/MONTREAL, April 4 (Reuters) - Struggling tour operator Air Transat TRZ.TO is in talks with the federal government on aid but may not reach a deal by an April debt deadline, a source close to the situation said, putting pressure on Quebec to ride to the rescue of another troubled aerospace brand in the province.
Air Canada AC.TO dropped its merger plans with Transat on Friday, saying European regulators had signaled it was unlikely to pass antitrust concerns.
Canadas largest carrier first bid for Transat in 2019 and discounted its offer last year as the pandemic decimated the travel and tourism sector.
Airlines have been in talks with Ottawa since last year about a possible aid package. Transats aborted deal adds fresh urgency to the talks, given the jobs at risk if the carrier fails and the political importance of Quebec ahead of an expected federal election this year.