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Competition Bureau Calls for 100% Foreign Ownership to Break Air Canada-WestJet Stronghold

The report proposes a new license class for domestic carriers with 100% foreign ownership to draw in global expertise and capital.

An Air Canada flight taxis to a runway as a WestJet flight takes off at Vancouver International Airport, in Richmond, B.C., on Friday, March 20, 2020. THE CANADIAN PRESS/Darryl Dyck
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Grounded Air Canada planes sit on the tarmac at Pearson International Airport during the COVID-19 pandemic in Toronto on Wednesday, April 28, 2021. THE CANADIAN PRESS/Nathan Denette
An Air Canada jet flies past a cell phone tower as it comes in to land at Pearson Airport in Toronto on Thursday January 20, 2022.

Overview

  • The Competition Bureau recommends lifting all foreign ownership caps and creating a new class of domestic-only airlines that could be entirely foreign-owned.
  • The study finds Air Canada and WestJet account for between 56% and 78% of domestic passenger traffic at major airports, a level the bureau labels “extremely high.”
  • Officials propose stripping the transport minister of override powers in airline merger reviews so that deals must clear antitrust scrutiny before proceeding.
  • Bureau analysis shows that adding a single new competitor on a route can reduce airfares by about 9%, underscoring potential cost savings for travellers.
  • Air Canada has questioned the bureau’s market concentration data and, along with regional airport authorities, warned that foreign carriers may overlook low-traffic routes serving remote communities.