The Greater Saskatoon Chamber of Commerce announced in a release that it submitted a request to Canada’s Competition Bureau 17JAN, calling it to investigate the possibility of collaboration between airlines to cede territory to their competition, resulting in less choice and higher airfares.
Specifically, it challenges Air Canada’s decision to terminate service from Saskatoon. Air Canada stopped all service from both Saskatoon and Regina to the regional hub of Calgary effective 16JAN.
As Open Jaw reported, the move followed the 2021 announcement by competitor WestJet that it was doubling down on its focus on Western Canada - and sure enough, Air Canada’s service change prompted WestJet to swoop into the void, adding new daily flights on both routes.
Flair Airlines had already announced its new daily direct service YYC - YXE would begin - but not til 09MAY.
At least one local air analyst was startled by Air Canada's move. "I'm surprised that Air Canada would completely vacate the market largely to WestJet," Rick Erickson told CBC News. "I haven't seen this done before."
Furthermore, the Saskatoon CoC argues that WestJet’s increased service comes at a price.
According to a report in the Globe & Mail, the Saskatoon CoC believes that, “Air Canada’s cancellation of twice-daily flights to Calgary has spurred WestJet to increase its airfares by hundreds of dollars. The loss of Air Canada flights to Calgary has also made it much harder for Saskatchewan businesses to reach other cities in North America and around the world.”
The CoC’s statement quotes its CEO claiming, "Air Canada has not adequately explained its 'business decision' to disregard strong and growing demand and eliminate a route that has been consistently profitable for over 30 years."
Jason Aebig says in the statement that forecasts actually predict strong economic and population growth for Saskatoon and Saskatchewan in the years ahead. "If Air Canada is unwilling to explain its decision to its customers and stakeholders, it can explain its decision to its regulators."
The statement contends that, “Route changes through 2022 suggest that Air Canada and WestJet took steps to soften competition in the oligopolistic Canadian airline industry. Air Canada withdrew competition from the traditional home-turf regional routes of WestJet, and WestJet did the same in the traditional home-turf regional routes of Air Canada.
“The Chamber has asked the Bureau to determine whether the air carriers either expressly or tacitly came to an agreement to allocate markets, contrary to the conspiracy provisions, or the civil competitor collaboration provisions, of the Competition Act.”
According to the Globe, both airlines reject the claim they conspired to reduce competition.
It quotes a WestJet response saying that the airline “is committed to compliance with all laws and regulations, including competition law, and as a foundational aspect of such compliance, does not engage with our competition about network decisions or any other aspects of our business.”
On its part, Air Canada “strongly rejects any allegations of anti-competitive conduct, and even after these route changes, remains a strong competitor across Canada including in Saskatchewan,” it said in an email to the Globe.
The federal Competition Bureau, meanwhile, acknowledges it has received the complaint from the Saskatoon Chamber of Commerce, but has not confirmed if it will investigate.
