The competition office is asking for changes to improve the competitive panorama in the Canadian airlines industry, including the loosening rules that currently limit the foreign property of Canadian airlines.
The Guardian dog, in a 117 -page market study published on Thursday, reiterated that the Canadian airline industry is highly concentrated with two main carriers, Air Canada and Westjet, which dominate the domestic market.
These airlines compete less directly from each other than six years ago, according to the report, and Westjet serves less national flyers in the East Airports, and Air Canada serves less national flyers in Western airports.
Greater competition would lead to lower rates and a higher quality of service, while better transparency around prices would help travelers make more informed decisions when buying flights, the agency said.
The existing limits of Canada in the foreign property of the airlines are also suffocating the competition, said the guard dog, and loosening these restrictions will facilitate that the newest and smaller airlines access the finances of different sources.
He recommended allowing foreign companies to take full ownership of Canadian airlines that only operate nationwide, creating a “new class of airline” that will contribute global experience and capital.
The office also suggested allowing individual international investors to have a majority of vote interest in Canadian airlines, which increases the amount of 25 percent to 49 percent.
John Gradek, professor of aviation management at McGill University, said there is a price to pay if the government loosen the rules around the foreign property of the operators.
“The decisions that will be made by those carriers who have a significant influence on the part of the foreigner [owners] It may not be the best for Canadians, “he said.
Increased air travel capacity in remote areas
The competition office indicated that the communities of the north and remote face specific difficulties when it comes to air trips because it is not profitable that most airlines operate in regions that serve smaller and distant populations, and where airfire infrastructure is lacking.
The Canadians, especially those who live in the secondary markets, are disregarded by the current state of the airline industry, said Gradek, adding that introducing and maintaining services in those markets, at a reasonable price, is a great challenge.
Lynx Air, based in Calgary, low cost, has stopped operating, citing the growing costs between the reasons for the closure. McKenzie McMillan, travel consultant with the travel group, tells BC today Michelle Eliot that Canadian airlines fight more than their American counterparts because less people travel longer distances between urban areas.
“If you live in Sault Ste. Marie, or live in a medicine hat, or live in Yarmouth … you are in trouble if you want to take a flight. And it will cost you an arm and a leg to reach any part of Canada,” he said.
The competition office recommends that a national working group be established to focus on air transport in remote regions. In general, he made 10 recommendations to improve competition, including:
- Eliminate clauses that only allow an airport in a local area to offer international flights.
- Improvement of public access to airline industry data, such as information on the quality of airlines.
- Review of how airports are managed and financed.
He also suggested limiting the power of the Minister of Transportation to cancel certain parts of the merger process between airlines. CBC News has communicated with the Ministry for a statement.
The success of the smallest porter and flair are improving the playing field, according to the report. Air Canada and Westjet have faced greater competition of at least one of these smallest carriers since 2019, he said.
“However, the history of the inputs and exits of the airline suggests that these competitive gains remain fragile, especially during economic clashes,” the office warned.
CBC News has contacted Westjet and Air Canada to get an answer.
The problems that affect the Canadian airline industry
The competition office launched its study last July and asked Canadians to communicate with the agency and share their opinions. Air Canada and Westjet were ordered by a Federal Court last fall to deliver information for the market study.
For years, consumer defenders and industry experts have shared concerns that the airline industry suffers a serious lack of competition, and some say that Air Canada and Westjet domain is equivalent to a duo.
Some travelers have also expressed their frustration due to the high cost of national air tickets, with additional rates and surcharges that swell the cost of a ticket beyond the base rate.
And the dissatisfied flyers have presented a record number of complaints about the state of air trips in recent years, and the accumulation reached a new past spring.
Meanwhile, many of the smallest discount airlines in the country have been bent or declared in bankruptcy, including Lynx Air and Canada Jetlines, and the new airlines have not been able to take off, as Swoop owned by Westjet, which finally put on the main operations of its matrix company.
