Canada’s Competition Bureau Wednesday withdrew its objections to an Air Canada-United Continental joint venture, saying it had reached a deal to preserve competition on key Canada-US routes.
Canada’s former anti-trust czar last year sought to block the proposal for the two airlines to coordinate schedules, sales and pricing, which she said amounted to a merger that would give them a monopoly on several transborder routes.
Commissioner Melanie Aitken had said she feared consumers would, as a result of the plan, “face higher prices and even less choice on key, high demand air passenger routes.”
But now the Competition Bureau says it has reached an agreement with the two airlines not to implement their joint venture on 14 routes.
Air Canada and Continental can go ahead with syncing their operations — except on these 14 key routes, where they must not coordinate prices, the number of seats available at each price, pool revenue or costs, or share commercially sensitive information.
An independent monitor will be appointed to ensure the airlines stick to the deal, said the Competition Bureau.
Originally, the government agency had identified 19 air passenger routes where competition would be reduced by the joint venture, including Calgary-Houston, Montreal-Washington, Ottawa-New York and Toronto-San Francisco.
It said Wednesday a further review and analysis of five of those routes determined that competition was unlikely to be “substantially harmed” as a result of the airlines’ coordination, and so the “consent agreement” applies only to the other 14.
The two airlines hold an estimated 55 percent share of trips from Canada to the United States.
Anti-trust czar greenlights Air Canada-United pact
