Air Canada this month ended service to Calgary from Regina and Saskatoon and stopped flying to Victoria and other B.C. cities from the Alberta hub.MIKE SEGAR/Reuters
Canada’s competition watchdog is being urged to look into moves by Air Canada and WestJet to end regional service in parts of the country, steps one business group alleges are anti-competitive.
Air Canada AC-T this month ended service to Calgary from Regina and Saskatoon and stopped flying to Victoria and other B.C. cities from the Alberta hub. The Montreal-based carrier took the steps seven months after Calgary-based WestJet said it would end some service within Eastern Canada, including Quebec and the Maritimes.
On Tuesday, the Greater Saskatoon Chamber of Commerce called on Competition Commissioner Matthew Boswell to investigate the service cancellations and their impact on travellers’ choices and costs. The group urged Mr. Boswell to find out if the airlines broke the law by effectively agreeing to divide the Canadian airline market between them.
“Air Canada and WestJet’s competition-softening conduct across Canadian regional air routes is anticompetitive,” the business group said in a 12-page complaint to the watchdog. “This conduct warrants inquiry by the [Competition] Bureau to determine whether the air carriers have either expressly or tacitly come to an agreement to allocate markets, contrary to the conspiracy provisions, or the civil competitor collaboration provisions, of the Competition Act.”
Air Canada told local media in December that the cancellation of the Saskatchewan-Calgary flights was part of its “prudent and disciplined” efforts to focus on its main hubs – Vancouver, Toronto and Montreal.
In June, WestJet said it would focus more on Western Canada and reduce its Eastern Canadian schedule, including the competitive Toronto-Montreal route, as it emerged from the pandemic. “We think that the West has more room for growth for us than the East,” chief executive Alexis von Hoensbroech told The Globe and Mail at the time.
Air Canada and WestJet rejected the suggestion that they had conspired with one another.
“WestJet 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,” spokeswoman Denise Kenny said.
“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,” the airline said in an e-mail.
The Competition Bureau confirmed that it received the complaint, but said it is prevented by law from saying if it will investigate. “Likewise, it would be inappropriate for the Bureau to speculate or comment as to whether the conduct described in the complaint contravenes the Competition Act,” spokeswoman Sarah Brown said. “The Bureau must conduct a thorough and complete examination of the facts before reaching any conclusion as to whether the Act has been contravened.”
The Saskatoon business group said 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 Chamber believes Air Canada’s decision to abandon a longstanding and profitable domestic route, and cede ground to its closest direct competitor, is concerning and warrants the [Competition] Bureau’s intervention,” the group said in a separate statement.
After Air Canada pulled out, discount carrier Flair Airlines announced plans to fly between Saskatoon and Calgary beginning this May. The Saskatoon business group said Flair is welcome, but cannot compare with the frequency, service and network Air Canada offered.
“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,” said Jason Aebig, head of the group. “If Air Canada is unwilling to explain its decision to its customers and stakeholders, it can explain its decision to its regulators. We believe in profitability. We believe in competition. This decision doesn’t make sense and all of it needs a closer look.”