The Competition Bureau of Canada is actively seeking feedback as it prepares to initiate a comprehensive market study on competition within the domestic air passenger services sector.
This move responds to growing concerns about the airline industry's competitive landscape, which has significant implications for consumers and the broader economy.
According to the Bureau, several key issues have prompted this market study. Canada's domestic air travel market is currently dominated by only two major airlines, leading to a lack of competition. Consequently, domestic airfare prices in Canada appear relatively high, drawing complaints from consumers about the cost and quality of air travel services. Additionally, new airlines face considerable obstacles when entering the Canadian market, further stifling competition and innovation.
The study aims to investigate these issues and uncover the underlying factors contributing to them. By doing so, the Competition Bureau hopes to formulate recommendations to enhance competition within the airline industry. The recommendations will be directed at all levels of government, focusing on making it easier for new businesses to compete and for consumers to make informed decisions.
The Bureau is inviting public input on the draft terms of reference for the market study. Interested parties can submit their comments by June 17. The Bureau emphasized that this consultation phase is crucial for ensuring that the study covers all relevant aspects and accurately reflects Canadians' concerns.
Once the consultation period concludes, the Bureau will finalize and publish the terms of reference. This document will detail the scope of the study and the process for submitting further information. The official launch of the market study will follow, marking the beginning of a thorough examination of the domestic air travel market from a competition standpoint.
“The airline industry is important to Canadians and the Canadian economy. Since the Canadian population is spread out over vast distances, other modes of transportation may not be feasible replacements for air travel. More competition in the industry will mean lower prices, better services, and improved productivity,” said Matthew Boswell, Commissioner of Competition.
Market studies like this allow the Competition Bureau to analyze industries or business sectors to identify factors hindering competition. This study will be the first one conducted under the strengthened framework for market studies outlined in the Competition Act.