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Canadian government calls for increased competition in airline industry

Canadian government calls for increased competition in airline industry
Policy
Webp alexis
Alexis von Hoensbroech CEO of WestJet | WestJet

The Canadian government has released a report on the state of the airline industry, emphasizing the need for increased competition to enhance affordability, service, and choice for consumers. The study by the Canadian Competition Bureau highlights that despite new entrants in the market, Air Canada and WestJet dominate domestic passenger traffic at major airports, accounting for 50% to 75%.

Matthew Boswell, Commissioner of Competition, remarked on the importance of policy changes: "With the right policy changes, governments can create the conditions for new airlines to grow and compete – and give Canadians access to more affordable, reliable options for flights."

The report reveals that Canada's domestic airline market is concentrated among a few large carriers. At eight major airports in 2023, Air Canada and WestJet combined accounted for between 56% and 78% of domestic passengers. Porter Airlines held a 30% share at Ottawa International Airport (YOW), while Flair Airlines had an 18% share at Edmonton International Airport (YEG).

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To address these issues, the Bureau recommended increasing foreign ownership limits to attract more capital into Canada's airline industry. The report suggested raising single-investor foreign ownership to 49% and allowing up to 100% foreign ownership for domestic-only carriers.

In response, Air Canada issued a statement titled ‘Myths and Facts on the Canadian Domestic Competitive Landscape,’ asserting that there is ample competition in Canada. It claimed that Canadians have more choices than ever before on most routes.

WestJet's CEO Alexis von Hoensbroech has advocated for reducing government-controlled charges and taxes. He argued during an appearance on CBC News Network that treating airports as a necessity rather than a business could stimulate air travel demand.

Both airlines have pointed out that lowering taxes would encourage more trips within Canada.

Organizations Included in this History
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