Competition Bureau says Air Canada-United arrangement could raise prices on 10 routes

A report from Competition Bureau Canada says a proposed arrangement involving Air Canada and United Airlines could weaken competition across 10 routes linking Canada and the United States. The report was delivered to the Minister of Transport for consideration in a public interest review.

Under the proposal, the airlines would be able to coordinate more extensively, including on pricing. That coordination is currently limited on the 10 routes under a 2012 consent agreement.

The bureau’s assessment is that most of the affected routes could see higher fares, with consumer harm estimated at millions of dollars each year.

The routes link Toronto, Montreal, Ottawa and Vancouver to Chicago, Cleveland, Denver, Houston, New York, San Francisco and Washington.

Jeanne Pratt, Interim Commissioner of Competition, said: “Competition between airlines helps keep fares lower and gives travellers more choice and better service . Our review found that allowing Air Canada and United to coordinate on these routes would likely reduce competition on key Canada-U.S. routes and lead to higher prices for travellers.”

The Minister of Transport will make the final decision on whether to authorize the proposed arrangement after considering the Competition Bureau’s findings in the public interest review.