Canada’s two biggest airlines, WestJet and Air Canada, have been ordered to hand over information about their operations as part of the Canadian government’s probe into the competitiveness of the country’s airline industry.
Ottowa’s Competition Bureau obtained two court orders requiring the airlines to provide the information as part of its market study, with the companies told to hand in documents detailing their competition analyses, key performance metrics, and analyses of barriers to entry in the industry.
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The order is part of the Bureau’s airline market study launched in July, which has set out to explore the competitiveness of the market dominated by its two biggest players after the closure of multiple smaller Canadian airlines such as Lynx Air and Canada Jetlines in recent years.
When launching the study, the Bureau reported that 80% of the domestic market’s capacity was provided by WestJet and Air Canada and noted the fact that both airlines had scaled back operations into Western and Eastern Canada, causing prices for flights in those regions to increase.
The Bureau said: “Despite the promising entry and expansion by some airlines, the Canadian market appears challenging for many carriers.
“This includes low-cost and ultra-low-cost carriers, which seem to face more difficulties in Canada compared to other countries.”
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By GlobalDataInformation provided by WestJet and Air Canada under the new court orders will be used to inform the Bureau’s ‘evidence-based findings’ and recommendations on how to improve the competitiveness of the industry.
The orders mark the first time the Bureau has used its information gathering powers to impel companies to provide information as part of a market study, with both airlines needing to produce records and written answers relating to questions posed to them.
Other information requested by the bureau includes agreements held by the airlines with airports and their shareholdings in other domestic airlines, as well as their analyses of government policies supporting new entries into the industry.
