Competition Bureau launches market study of Canadian airline sector

The Competition Bureau officially launched yesterday (July 29) its market study of competition in domestic air passenger services.

The launch of the market study follows the completion of the consultation on its scope and the Minister of Innovation, Science and Industry’s approval of the final terms of reference.

“Air travel is a critical service,” Matthew Boswell, the Bureau’s commissioner. “We know many Canadians are frustrated by the cost and quality of the service being provided domestically. We heard this in many of the over 1,400 submissions to the consultation on the terms of reference. Our goal with this market study is to examine the current state of competition in Canada’s airline sector and to determine what can be done to improve it.”

The market study will allow the Bureau to better understand what is driving the competition issues in the domestic airline industry.

Specifically, the Bureau plans to examine three key topics:

• the state of competition in Canada’s airline industry;
• the barriers to entry and expansion that exist in the domestic industry; and
• the impediments to Canadians seeking to make informed choices for air travel.

The Bureau will publish the results of the market study in a final report, which will make recommendations to improve competition for the benefit of Canadian air passengers, as well as the workers and entrepreneurs who enable these services.

The Bureau is seeking submissions from those with information relevant to this study.

Those interested in making a submission can learn more at Market study: Competition in Canada’s airline industry.

The deadline for submissions is Aug. 31, 2024.

Melissa Fisher, a deputy commissioner with the Bureau, announced in May it would launch a market study focused on the Canadian airline industry while testifying in front of a parliamentary committee that started its own study of the same issues after Lynx ceased operations, one of at least eight budget airlines to shut down in Canada since 2000.

According to the Canadian Press, Fisher said the bureau will look at improving competition for “the benefit of domestic air passengers as well as the workers and entrepreneurs who enable these services.”

She also cited “recent events that have raised questions about the state of competition in the airline sector.”

On May 27, the bureau opened public consultations. It stopped taking feedback on June 17.

Its final market study report is expected to be published in June 2025.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.