Competition bureau closes airline investigations

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The Competition Bureau has found no evidence of anti-competitive acts between First Air and Canadian North.

This follows a yearlong investigation into First Air and Canada North, which closed on Tuesday.

The Competition Bureau has found no evidence of acts of anti-competition between First Air and Canadian North during the airline companies’ codesharing agreement, although it noted they were concerned about now defunct upstart airline GoSarvaq. NNSL file photo

The bureau also closed investigations into the 2015 merger of First Air and Calm Air in the Kivalliq. The bureau was looking into several issues, including allegations of predatory pricing surrounding the codeshare agreement between First Air and Canadian North.
Kelly Lewis, communications manager with Canadian North, said the company is pleased the investigation is over.

“We have always operated within the set parameters of the competition law,” stated Dan Valin, marketing and communications manager with First Air in an email, adding First Air plans to continue operating within the law.

Starting in July 2015, the two airlines operated 16 routes around the North as part of a codeshare agreement, which allows both airlines to sell seats and services on the same flight. Along with an Edmonton-Yellowknife route, trans-Arctic route and flights to the Baffin, Kitikmeot and Mackenzie Valley regions, the codeshare also covered flights between Ottawa and Iqaluit, where the airlines were accused of lowering prices below cost in an effort to drive out competitor GoSarvaq. Before the investigation could be completed, First Air announced it would be terminating the codeshare agreement.

The investigation continued into allegations of predatory pricing on the Ottawa-Iqaluit route, separate from the codeshare issue.

Last year, GoSarvaq folded before its first flight. At the time, the airline blamed competitor pricing for blocking its entry into the Iqaluit-Ottawa route. The company claimed Canadian North and First Air offered flights for $100 to $200 less after GoSarvaq started booking tickets.

The bureau concluded that while “predatory pricing promotions” by the two airlines did have an impact on GoSarvaq’s plans to enter the market, it didn’t find sufficient evidence that these were anti-competitive acts.

In a news release, John Pecman, commissioner of competition with the Competition Bureau stressed the importance of air transportation to the North, as well as the unique challenges faced by airlines operating north of 60.

“Competition plays a key role and while we are closing our investigations, airlines must recognize that compliance with the Competition Act is an essential practice and the bureau will continue to be vigilant in this arena,” he stated.