Flair Air is a low-cost carrier operating in Canada; its executives say high airport costs are one factor in prices here. The Competition Bureau is about to study the industry. (CBC)
The Competition Bureau of Canada has announced plans to investigate the domestic air travel industry, citing concerns over high airfares and limited competition. With only two major airlines, WestJet and Air Canada, dominating the market, the bureau aims to address issues such as rising complaints from consumers and challenges faced by new entrants into the industry.
The bureau highlighted the significant concentration within the domestic air travel sector, with WestJet and Air Canada holding a dominant position. This concentration raises concerns about the lack of competition, which could potentially lead to higher prices and fewer choices for consumers. Additionally, the bureau noted an increase in complaints from Canadians regarding various aspects of air travel, indicating a need for further examination of the industry.
Anthony Durocher, the deputy commissioner of the Competition Bureau, emphasized the importance of competition in driving lower prices, increasing consumer choice, and fostering innovation within the air travel sector. By studying how competition operates within the industry, the bureau aims to make recommendations to the government to address existing issues and promote a more competitive marketplace.
To gather insights for its investigation, the Competition Bureau has invited input from the public on the terms of reference for the upcoming study. Canadians have been encouraged to provide feedback on key questions, such as how policymakers can support airline entry and expansion and how they can better assist consumers when shopping for airfares. The bureau will consider this feedback when finalizing the study's scope and objectives.
The study is expected to examine various factors influencing the domestic air travel market, including airport costs, consumer preferences, and regulatory barriers to entry. One area of focus will be the role of airport fees, which industry players believe contribute to the high cost of air travel in Canada. Garth Lund, chief commercial officer of Flair Airlines, highlighted the significant expenses associated with operating in Canadian airports compared to those in the US and Europe. He called for measures to address these costs, which he believes are passed on to consumers in the form of higher airfares.
In response to the Competition Bureau's announcement, François-Philippe Champagne, the federal Minister of Innovation, Science, and Industry, suggested refining the study to focus specifically on domestic passenger airline services rather than broader airport governance issues. The bureau's study will consider this suggestion, with the final terms of reference subject to ministerial approval.
This investigation marks a significant step for the Competition Bureau, which recently gained new powers to compel information from companies involved in its studies. The bureau aims to leverage these powers to gather comprehensive data on the domestic air travel industry and identify opportunities to enhance competition and benefit consumers.
Overall, the Competition Bureau's investigation into the domestic air travel industry reflects its commitment to promoting competition and protecting consumer interests in Canada. By addressing concerns related to high airfares and limited competition, the bureau seeks to create a more competitive and accessible air travel market for all Canadians.
