The Saskatoon Greater Chamber of Commerce has asked a national watchdog to investigate if Air Canada and WestJet colluded to divide flight routes, stating softened competition between the two airlines is unfair to Saskatchewan’s travelling public and business groups.
“Even if the conduct falls short of being an “agreement” between the airlines,” a press release states, “it amounts to an abuse of dominance by Air Canada and WestJet where the airlines have engaged in conduct intended to harm competition, thereby improving their respective positions in the market.”
The chamber is asking the Competition Bureau Canada to examine Air Canada’s cancellation of direct flights from Saskatoon and Regina to Calgary.
Due to required confidentiality, the bureau did not confirm whether it will be investigating this matter.
“If the behaviour of these two airlines has basically given each one an anti-competitive monopoly on its routes, the federal regulators should look into it,” said chamber CEO Jason Aebig.
Air Canada claimed no collaboration was involved in its decision to take flights off of Saskatchewan’s market.
“Air Canada strongly rejects any allegations of anti-competitive conduct, and even after these route changes, remains a strong competitor across Canada including in Saskatchewan,” read a statement provided by Air Canada.
WestJet also denied the conspiracy allegations, saying it “does not engage with our competition about network decisions or any other aspects our business.”
Competitive law expert Jennifer Quaid explained that what might look like conspiracy efforts might simply be individual strategy.
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“Oftentimes, competitors don’t really need to talk to each other or to communicate at all in order to develop strategies. And so, the idea of there being expressed co-operation or collusion here might in fact just not be true,”
She said that investigators will need to find witnesses and documentation to conspiracy. The flight cancellation records will not be enough.
“It’s pretty challenging to find proof of intent. I mean, contrary to public perception, smoking guns are rarely there.”
As Global News previously reported, Air Canada passengers will have to fly to Vancouver from either city to get to Calgary, with flights costing sometimes more than twice as much as a direct flight. And WestJet’s flights between Saskatoon and Regina to Calgary were still more expensive than Air Canada’s direct routes had been.
Several businesses and one leading researcher warned the cancellation could have a chilling effect on the province’s economy and ability attract leading researchers and businesses.
“Air Canada’s route cancelation means that Saskatoon-based businesses will spend more time and more money to connect with the people and markets they serve,” Aebig is quoted in the release as saying.
“Compared to neighbouring provinces, Air Canada’s decision creates unnecessary barriers for Saskatoon’s current businesses, research institutes and residents, as well as those wishing to visit, study or do business here.”
When Air Canada announced the cancellations in December, it stated it is looking to rebuild in a prudent and disciplined way by deploying resources where they will be most productive and that it will focus on main hubs in Montreal, Toronto and Vancouver.
The 11-page submission to the competition bureau cites a report from the Conference Board of Canada, a think tank, which concluded the Saskatoon economy would outpace the Canadian economy in 2023.
“Any “business case” for leaving Saskatoon appears to be very weak,” it said, adding that the cancellation will lead to increased prices, reduced choice and “poorer quality of service from an unchecked monopolist.”
“If Air Canada is unwilling to explain its decision (to cancel the flights) to its customers and stakeholders, it can explain its decision to its regulators.”
— with files from Jeanelle Mandes