Competition watchdog calls for relaxed foreign ownership rules in airline industry report

Jenna Benchetrit · CBC News

· Posted: Jun 19, 2025 8:00 AM EDT | Last Updated: 3 hours ago

The Competition Bureau is calling for changes to amended the competitory scenery successful Canada's hose industry,  including loosening rules that presently bounds overseas ownership of Canadian airlines.

The watchdog, successful a 117-page market survey published Thursday, reiterated that Canada's hose manufacture is highly concentrated with 2 large carriers — Air Canada and WestJet — dominating the home market.

Those airlines are competing little straight with each different than they did six years ago, the study said, with WestJet serving less home fliers astatine eastbound airports, and Air Canada serving less home fliers astatine occidental airports.

More contention would pb to little fares and a higher prime of service, while improved transparency astir prices would assistance travellers marque much informed decisions erstwhile buying for flights, the bureau said.

Canada's existing limits connected overseas ownership of airlines are besides stifling competition, the watchdog said, and loosening those restrictions volition marque it easier for newer, smaller airlines to entree finances from antithetic sources.

It recommended letting overseas companies instrumentality afloat ownership of Canadian airlines that lone run domestically, creating a "new people of airline" that volition bring successful planetary expertise and capital.

The bureau besides suggested letting idiosyncratic planetary investors clasp a larger stock of voting interests successful Canadian airlines, boosting the magnitude from 25 per cent to 49 per cent.

John Gradek, a prof of aviation absorption astatine McGill University, said there's a terms to wage if the government loosens rules astir overseas ownership of carriers.

"The decisions that are going to beryllium made by those carriers that person a important power by overseas [owners] whitethorn not beryllium successful the champion involvement of Canadians," helium said.

Boosting aerial question capacity in distant areas

The Competition Bureau noted that bluish and distant communities look circumstantial difficulties erstwhile it comes to aerial question due to the fact that it isn't cost-effective for astir airlines to run successful regions serving smaller, much distant populations, and wherever aerial question infrastructure is lacking.

Canadians, particularly those surviving successful secondary markets, are underserved by the existent authorities of the hose industry, said Gradek, adding that introducing and maintaining services successful those markets — astatine a tenable price — is simply a large challenge.

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"If you unrecorded successful Sault Ste. Marie, oregon you unrecorded successful Medicine Hat, oregon you unrecorded successful Yarmouth ... you're successful occupation if you privation to get connected a flight. And it's going to outgo you an limb and a limb to get anyplace successful Canada," helium said.

The Competition Bureau is recommending that a nationalist moving radical beryllium established to absorption connected aerial proscription successful distant regions. Overall, it made 10 recommendations to amended competition, including:

• Removing clauses that lone fto 1 airdrome successful a section country connection planetary flights.
• Improving nationalist entree to hose manufacture data, similar accusation connected hose quality.
• Reviewing however airports are managed and funded.

It besides suggested limiting the Transport Minister's powerfulness to override definite parts of the merger process betwixt airlines. CBC News has reached retired to the ministry for a statement.

The occurrence of smaller airlines Porter and Flair are improving the playing field, according to the report. Air Canada and WestJet person some faced accrued contention from astatine slightest 1 of these smaller carriers since 2019, it said.

"However, the past of hose entries and exits suggests that these competitory gains stay fragile, particularly during economical shocks," the bureau cautioned.

CBC News has contacted WestJet and Air Canada for a response.

The issues plaguing Canada's hose industry

The Competition Bureau launched its survey past July and called connected Canadians to interaction the bureau and stock their opinions. Air Canada and WestJet were ordered by a national tribunal past autumn to manus implicit accusation for the marketplace study.

For years, user advocates and manufacture experts person shared concerns that the hose industry suffers from a superior deficiency of competition, with immoderate saying that Air Canada and WestJet's dominance amounts to a duopoly.

Some travellers person besides expressed vexation implicit the precocious outgo of home airfare, with further fees and surcharges bloating the outgo of a summons beyond the basal fare.

And dissatisfied fliers person made a record-number of complaints astir the state of aerial question successful caller years, with the backlog having deed a caller highest past spring.

Meanwhile, galore of the country's smaller discount airlines person folded oregon filed for bankruptcy — including Lynx Air and Canada JetLines — and newer airlines person failed to instrumentality off, specified arsenic WestJet-owned Swoop, which was yet folded into its genitor company's superior operations.