Three months after low-cost Lynx Air closed shop, the Trudeau government says it’s probing into the state of airline competition in Canada.
Government officials on 09MAY said the Competition Bureau will examine how government policies affect competition among Canada’s airlines, Canadian Press and the Globe and Mail report.
CP said the government is launching what it calls a “market study,” which will look at barriers to competition and consider how governments can make improvements. The exact scope of the study will be determined after the bureau consults with Canada's transport minister.
“We intend to study the state of competition in the airline industry and how governments across Canada can improve competition for the benefit of domestic air passengers as well as the workers and entrepreneurs who enable these services,” Melissa Fisher, the Competition Bureau’s deputy commissioner of mergers, told members of a parliamentary transport committee in Ottawa.
Fisher suggested that recent events in Canada “have raised questions about the state of competition in the airline sector.” (Covert talk for ‘duopoly’.)
This will be the first study under new powers the organization gained in December, which include the ability to compel information from companies, she said.
“There was and is currently a problem with concentration in the Canadian market,” John Lawford, the director of the Public Interest Advocacy Centre, told the transport committee.
Lawford pointed to several factors that limit airline competition in Canada, including the high cost of entering the market, a lack of government support for new airlines and the government’s failure to police predatory pricing or route matching.
CP said the study is the first by the Competition Bureau since the release of its 2023 investigation into the grocery business in Canada.
It remains to be seen if the bureau will actually sink its teeth into the issue, or if this is aimed at making the government look good with consumers ahead of an election. But having the feds asking questions about competition and bringing the issue to the forefront is almost certainly going to be a talking point in Canadian airline boardrooms.
