Canadian Official Tries To Block United-Air Canada Venture

Home > News > Aviation 2011 Canadian Official Tries To Block United-Air Canada Venture By Jerry Limone June 29, 2011 Canada's competition czar has filed an application with the country's Competition Tribunal to prohibit a joint venture between Air Canada and United Continental Holdings. Star Alliance partners Air Canada and United already have laid the groundwork for a revenue-sharing joint venture for transborder flights. The airlines have antitrust immunity and were scheduled to launch the joint venture this year. Melanie Aitken, Canada's commissioner of competition, said the joint venture would enable Air Canada and United to "monopolize 10 important Canada-U.S. routes." She considers the joint venture to effectively be a merger between United Continental and Air Canada. "If allowed to proceed, consumers will face higher prices and even less choice on key, high-demand air passenger routes," she said. In addition to challenging the joint venture, Aitken is challenging agreements that allow Air Canada and United to coordinate pricing and scheduling and share revenue. "Through these existing agreements, the companies currently have the power to charge passengers inflated fares," she said. "Moreover, if these anticompetitive provisions are further implemented, with or without the joint venture, Canadians will pay even more for less choice and higher fares." In separate statements, Air Canada and United said they "strongly disagree" with Aitken. "United's transborder cooperation with Air Canada has provided customers traveling between Canada and the U.S. with more and better service," United said. According to reports, an amendment to Canada's Competition Act allows the country's competition commissioner to argue cases of alleged anticompetitive behavior before the Competition Tribunal, which can force a decision. Source: Travel Weekly