Greater airline competition is key to solving intractable problems
RADNOR, PA, Jan. 22 /CNW/ -- The Business Travel Coalition (BTC) today
applauded Canadian Competition Bureau's recommendations to open the domestic
Canadian commercial air transportation services market to much needed
competition from foreign airlines.
BTC Chairman Kevin Mitchell said, "The Canadian competition authority has
identified the key problem facing Canadian consumers of air travel services --
the lack of meaningful airline competition -- and recommended constructive
steps to ameliorate this unfortunate, longstanding situation. Consumers in
Canada deserve more airline choice and lower fares, and business travelers
deserve more efficient travel procurement options than are currently offered
in this important but increasingly broken market. With more airline
competition, airlines operating in Canada will become more responsive to
The Competition Bureau recognized that "the public interest in airline
competition goes beyond the interests of existing domestic market participants
to include the economy generally and important industries, such as tourism."
In light of this, the Commissioner recommended increasing foreign ownership
limits in Canadian carriers from 25% to 49.9%, allowing 100% foreign ownership
of carriers that carry passengers and goods only within Canada -- thereby
creating a new class of "Canada-only" carriers, and allowing foreign carriers
to engage in "cabotage" -- a practice which would involve foreign carriers
picking up passengers at Canadian gateways and transporting them to other
Canadian cities. These proposals advanced by the Canadian government would
inject foreign capital into the Canadian market, increase the number of routes
served to and from Canada, and further promote competition.
A significant public policy issue that the Competition Bureau identified
is whether these reforms and opening up the Canadian market to foreign
carriers should be implemented unilaterally or only on a reciprocal basis. For
its part, the Bureau concludes that "based on competition grounds a strong
case exists supporting the implementation of such measures unilaterally."
Whether liberalization comes unilaterally or reciprocally, the BTC urges other
nations to recognize the value to consumers in opening domestic markets to
more competition from foreign carriers. Recent reports of stepped up merger
and joint venture activity in the US and Europe make this an imperative.
"In the months ahead, discussions will be initiated within the industry
about shaping a brighter future for the Canadian air transportation services
market," said Mr. Mitchell. "The Competition Bureau's views offer a helpful
and optimistic focal point for these discussions."
The full text of the Competition Bureau's proposal can be found at
CONTACT BTC: Kevin Mitchell, 610 341-1850,
Founded in 1994, the mission of the Business Travel Coalition is to bring
transparency to industry and government policies and practices so that
customers can influence issues of strategic importance to them.
For further information:
For further information: Kevin Mitchell of Business Travel Coalition,
(610) 341-1850, mitchell@BusinessTravelCoalition.com, Web Site: