Is Canada’s Domestic Airline Sector Taking Flight or Stalling?

WestJet and Air Canada aircraft parked at a Canadian airport.
Quintin Soloviev, CC BY-SA 4.0, via Wikimedia Commons

Canadians who rely on air travel may soon see changes on the horizon. The Competition Bureau of Canada is seeking public input as they prepare to launch a new market study.

This will focus on competition within the domestic air passenger service industry. This move comes amid growing concerns about the current state of competition in the sector.

Spotlight on Canadian Domestic Air Travel

Broadly speaking, the new study will seek input around a set of identified concerns.

  • Limited Choice

Just two major airlines control most of the domestic air travel market in Canada. This lack of competition can potentially lead to higher prices and fewer options for consumers.

  • Price Concerns

Compared to other markets, domestic airfare in Canada sits at a relatively high price point.

  • Passenger Frustration

The number of complaints filed by Canadians regarding air travel services has been on the rise in recent years.

  • Barriers to Entry

New airlines tend to face significant challenges when trying to enter the Canadian market, further hindering competition.

A Jazz Aviation Air Canada Express jet in flight.
Photo Credit: Aaron Davis, CC BY-SA 4.0, via Wikimedia Commons

By undertaking a market study, the Competition Bureau aims to gain a deeper understanding of the factors influencing these issues.

Their goal is to develop recommendations for all levels of government that will ultimately foster a more competitive airline industry.

Potential Benefits for Air Travelers

The development of an appropriate set of findings and recommendations will be made by the Competition Bureau. This could ultimately lead to several benefits for Canadians, such as:

  • Lower Ticket Prices: Increased competition often translates to lower airfares for consumers.
  • Improved Service: Airlines competing for customers may be incentivized to offer better service and amenities.
  • Enhanced Productivity: A more competitive airline industry can contribute to a stronger Canadian economy.
WestJet and Sunwings aircraft on the taxiway.
Lord of the Wings© from Toronto, Canada, CC BY-SA 2.0, via Wikimedia Commons

A Call for Public Feedback

The Competition Bureau is actively seeking public feedback on the draft market study notice. This is a chance for Canadian air travellers to have their voice heard!

Interested Canadians can submit their comments by June 17, 2024, through the Competition Bureau’s feedback form. Alternatively comments can be emailed to: [email protected].

A row of Porter Airlines Dash 8 aircraft.
Photo Credit: Porter Airlines

Strengthening Competition for a Better Future

“The airline industry is crucial to Canadians and the Canadian economy,” stated Matthew Boswell, Commissioner of Competition.

“Given Canada’s vast geography, air travel often serves as the most viable transportation option for many. Increased competition within this industry has the potential to deliver lower prices, better service, and ultimately, improved economic productivity.”

A Flair Airlines jet banks overhead.
Photo Credit: Flair Airlines

This market study marks a significant first under the Competition Act’s recently strengthened framework for such investigations.

It’s important to note that this is not an investigation into specific allegations of wrongdoing by any airline. However, if the Bureau uncovers evidence of potential law violations during the study, they will take appropriate action.

The Competition Bureau’s market study holds promise for a brighter future for Canada domestic air travel. By working together, consumers, airlines, and the government can create a more competitive landscape that benefits everyone.

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By Len Varley - Assistant Editor 4 Min Read
4 Min Read
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