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Testifying on Sept. 14 at a sitting of the House of Commons Standing Committee on Transport, Infrastructure and Communities examining Bill C-49, the Transportation Modernization Act, Transat A.T. Inc., called for stricter provisions relative to the approval of international airline joint ventures so as to maintain healthy competition on the Canadian market.
In a press release, Transat said that given creation of an airline joint venture aims at consolidating and coordinating the critical business functions (e.g., route planning, capacity, fares) of two air carriers within a single entity, this type of arrangement should be considered a de facto merger and, as such, subjected to existing legislation, under which it is already possible to determine whether agreements of this nature are in the public interest.
Transat reminded the committee that in the past, the Commissioner of Competition has expressed major concerns about the risk of anti-competitive behaviour resulting from airline joint ventures, especially where the partners control a significant share of the market.
Consequently, Transat proposed that planned international joint ventures be subjected to a review and authorization framework using largely the same provisions regarding mergers as the Canada Transportation Act, which were developed jointly by the Commissioner of Competition and the Minister of Transport.
Transat also reiterated its support for the proposed airline passenger bill of rights, which would aim to ensure improved customer experience through a fair and balanced regulatory framework. The company also agrees with the proposal in the draft legislation to increase the limit on foreign ownership of Canadian-licenced airlines to 49 per cent.
