Expansion of Air Canada and United Airlines' transborder joint business agreement "would likely result in harm to competition," according to a Canadian Competition Bureau report issued last week. The bureau is an independent law enforcement agency that is responsible for the administration and enforcement of Canada's Competition Act.
The carriers on June 18 requested to renew and expand the partnership with 10 additional transborder routes in their joint business arrangement. The routes currently are part of a "carve-out" section of a 2012 consent agreement that are subject to restrictions because of "competition concerns," according to the report. The carriers want the carve-out eliminated.
The 10 routes include flights between:
- Toronto and Denver
- Toronto and Houston (HOU or IAH)
- Toronto and San Francisco (OAK or SFO)
- Montreal and Chicago (MDW or ORD)
- Montreal and Washington, D.C. (DCA, IAD or BWI)
- Toronto and Cleveland
- Vancouver and San Francisco (OAK or SFO)
- Ottawa and New York (EWR, JFK or LGA)
- Ottawa and Washington, D.C. (DCA, IAD or BWI)
- Toronto and Washington, D.C. (DCA, IAD or BWI)
The Toronto routes would include service from Toronto Pearson International Airport or Billy Bishop Toronto City Airport.
The bureau specified that if implemented, the elimination of the carve-out section of the agreement would "create and entrench a monopoly or near-monopoly on key transborder routes, and eliminate the direct rivalry that currently constrains prices and benefits consumers," according to the report.
Air Canada did not immediately respond to a request for comment. United directed BTN to an Oct. 16 Air Canada press release that not only announced other new routes under the carriers' transborder partnership but also outlined what the carriers described as the benefits of their agreement, noting that "coordinated schedules provide more departure options, improved connections and greater flexibility during disruptions."
Transport Canada officials are assessing the carriers' request, and the Canadian public has until Nov. 15 to comment on the proposal.