Competition Bureau to launch market study of Canadian airline sector

OTTAWA — Canada’s Competition Bureau says it will begin a market study focused on the Canadian airline sector.

It will look into the state of competition in the airline industry and how governments can make improvements.

In a market study, the bureau examines barriers to competition, such as regulations or policies, within a specific sector.

Melissa Fisher, a deputy commissioner with the bureau, made the announcement while testifying in front of a parliamentary committee studying airline competition in Canada. 

She said the bureau will look at improving competition for “the benefit of domestic air passengers as well as the workers and entrepreneurs who enable these services.”

Fisher cited “recent events that have raised questions about the state of competition in the airline sector.”

The committee launched its study after Lynx Air folded in February, Conservative MP Ryan Williams noted.

It was at least the eighth budget airline to shut down in Canada since 2000. 

The Lynx Air shutdown followed the closure of fellow low-cost carrier Swoop, and WestJet’s purchase of Sunwing Airlines in 2023.

Fisher said this will be the first study under new powers the organization gained in December, which include the ability to compel information from companies. 

It will follow the Competition Bureau’s recent study of the grocery sector.

Vass Bednar, executive director of the Master of Public Policy Program at McMaster University, said that study was productive and spurred “a lot of great conversation.”

Now that the bureau has “market study powers, perhaps they’ll be able to offer a more comprehensive and detailed assessment,” she said.

This report by The Canadian Press was first published May 9, 2024.

Anja Karadeglija, The Canadian Press