Competition Bureau launching study of airline competition in Canada

Canada’s Competition Bureau is preparing to launch a market study of competition in domestic air passenger services in Canada and, in the process, it will be consulting with Canadians.

In announcing the study, the Competition Bureau indicated that recent events have raised questions about the state of competition in the industry, which include:

• The domestic air travel market is concentrated with only two major airlines
• Domestic airfare in Canada appears to be relatively high
• Canadians have filed more complaints about air travel services in recent years
• New airlines appear to face challenges entering the Canadian market

The market study will allow the Bureau to better understand what is driving these issues, and to make recommendations to all levels of government to improve competition in the airline industry.

As well, the study will examine how to make it easier for new businesses to compete and easier for consumers to make informed choices.

Matthew Boswell, Commissioner of Competition, said: ““The airline industry is important to Canadians and the Canadian economy. Since the Canadian population is spread out over vast distances, other modes of transportation may not be feasible replacements for air travel. More competition in the industry will mean lower prices, better services, and improved productivity.”

Market studies allow the Bureau to examine an industry or business sector from a competition perspective to identify factors that may impede competition.

The just-launched market study will be the first market study undertaken under the Competition Act’s strengthened framework for market studies.

However, it’s noted that the study is not an investigation into specific allegations of wrongdoing. However, if the Bureau finds evidence that someone may be doing something against the law, we will investigate and take appropriate action.

The Bureau is seeking public feedback on the terms of reference in the draft market study notice.

Interested parties are invited to submit their comments by June 17, 2024, through our feedback form or by emailing [email protected].

The Competition Bureau said that following the consultation, it will publish its final terms of reference and officially launch the market study. The final terms of reference will include details on how to provide submissions to the market study.