Canadian Competition Bureau Commences Study on Airline Industry

The independent Canadian law enforcement agency regulating competition within the country, Competition Bureau Canada, is undertaking a ‘market study’ on the airline industry. According to the bureau, there will be a particular focus on domestic air passenger services, seeking to improve competition to benefit passengers and those who operate and work within the sector.

The scope of the study will encompass examining three key topics: the state of competition in Canada’s airline industry; barriers to entry and expansion; and impediments to informed customer choice. Out of scope will be the examination of any specific allegations of wrongdoing. However, the Bureau states that should it ‘uncover any evidence during the study that the Competition Act has been contravened, it will investigate and take appropriate action.’

The Canadian domestic air travel market is notoriously challenging given the country’s geographic size. Flight time from Vancouver, British Columbia in the west to St. John’s, Newfoundland and Labrador in the east is approximately six hours over a distance equivalent to 3,121 miles.

Canada’s 40 million citizens are mainly concentrated in a few key cities across six time zones with only six Canadian cities having a population greater than one million. The U.S. by comparison covers a marginally smaller land area but boasts a population of 333 million with multiple metropolitan areas.

Part of the bureau’s study into domestic air travel will need to be mindful of regional variations in operating air services. To this end, representatives of two air operators to northern Canada spoke to the government’s standing committee on transport, infrastructure, and communities on Thursday. The presidents of Canadian North and Air North were detailing how their airlines’ operation costs could be burdened by some of the federal regulations pertaining to the industry, as opposed to other operators in the country.

Yahoo! News reported the president and chief executive officer of Canadian North, Shelly De Caria, stating:  “We operate in a very unique environment, and the regulatory policies that we have in place do not contribute to the success that we have.” De Caria noted adverse weather’s disproportionate impact on the airline’s operations. Also, some routes to smaller communities ‘aren’t as profitable as other routes — and major airlines like Air Canada and WestJet aren’t interested in serving those communities.”

The views of these airlines will no doubt be submitted to the Competition Bureau Canada market study, alongside those of other aviation interests and the general public. Final terms of reference for the market study are scheduled to be published in July with written submissions from the public accepted up until August. The final report is expected to be published in June or July 2025 after stakeholder engagement and analysis of potential solutions and recommendations.

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John Flett

John has always had a passion for aviation and through a career with Air New Zealand has gained a strong understanding of aviation operations and the strategic nature of the industry.

During his career with the airline, John held multiple leadership roles and was involved in projects such as the introduction of both the 777-200 and -300 type aircraft and the development of the IFE for the 777-300. He was also part of a small team that created and published the internal communications magazines for Air New Zealand’s pilots, cabin crew and ground staff, balancing a mix of corporate and social content.

John is educated to postgraduate level achieving a Masters degree with Distinction in Airline and Airport Management. He has been the course director of an undergraduate commercial pilot training programme at a leading London university and a member of Heathrow Community Trust’s ‘Communities for Tomorrow’ panel.

John is currently living in Canada and is contracted as an external instructor for aviation-related organizations.

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• Canadian Competition Bureau Commences Study on Airline Industry - May 31, 2024