Jetlines calls out the lack of Canadian airline competition

Canada Jetlines Ltd., an ultra-low-fare carrier in Canada, has staged a protest in the one place the airline duopoly think they own: the sky. Using four planes, 18 skydivers and the Jetlines CEO, an airborne protest was staged to call out the lack of Canadian airline competition. This act was to rally Canadians, investors and the Competition Bureau around the idea of increased competition and decreased airfares.

The ultra-low-fare carrier is encouraging people to go to Jetlines’s website and sign an online petition that will be presented to the Canadian Competition Bureau, the government agency that ensures markets operate in a competitive manner to prevent abusive monopolistic practices. While several airlines have attempted to enter the Canadian market, the duopoly has pushed them out with short-term match-pricing at prices below their avoidable costs. Thus far, Canada’s Competition Bureau has done little to rectify this issue. The Competition Bureau is currently investigating WestJet and their subsidiary new airline for “predatory pricing” to undercut new entrants. Under Canada’s competition laws, predatory pricing occurs when an incumbent with market power sets its prices below avoidable costs.

“Canadians pay among the highest airfares in the world and we’re the only developed country without an ULCC as two high cost airlines control approximately 85 per cent of the domestic market,” said Javier Suarez, CEO for Jetlines. “We know Canadians are fed up as there are between five and six million passenger trips per year by land over to the U.S. each year to fly on U.S. low cost carriers, based out of northern U.S. airports, that in many cases only operate from those airports due to the robust Canadian passenger traffic. We’re urging consumers to go online and to show their support for more competition and lower fares in Canada”.

The entrance of Jetlines has the potential to dramatically reduce airfares for Canadians on a long-term, sustainable basis. In just two decades, the ultra-low-cost carrier (ULCC) model has proven to be highly profitable and successful throughout the world. They generate economic growth but most importantly, they give consumers the freedom to travel more often. While more of these airlines are taking off, Canada has not tapped into the high demand for this kind of travel due to the anti-competitive environment of the existing Canadian duopoly. As a consequence, there is a lack of competition, that drives up prices, making consumers suffer.

Jetlines is a publicly traded company, backed by a management team and board of directors with extensive experience in the low-cost airline industry. Jetlines expect to launch operations before the end of this year. The launch of airline operations is subject to receipt of regulatory approvals and completion of the remaining financing.