New process for review and authorization of air carrier joint ventures now in place
April 3, 2019 Ottawa, Ontario Transport Canada
Canadians rely on an aviation sector with diverse international travel offerings for both business and leisure travel. Growing Canada’s international air transportation networks allows airlines to provide passengers and businesses with greater connectivity, to grow their businesses and compete globally.
The Honourable Marc Garneau, Minister of Transport, announced that effective today, the Minister of Transport has the authority to review and authorize joint ventures between airlines. Previously, only the Competition Bureau reviewed air carrier joint ventures to determine whether a joint venture would substantially lessen or prevent competition. It did not consider factors beyond those related to competition, such as impact on employment. This new process allows the Minister of Transport to authorize a proposed joint venture that would be in the public interest by balancing those interests with impacts on competition. This process was a key priority from the Minister’s Transportation 2030 strategy to promote greater choice and connectivity in the air sector, which may lead to lower ticket prices.
Joint ventures are an increasingly common practice in the global air transportation sector. They allow two or more air carriers to coordinate functions on specific routes, including scheduling, pricing, revenue management, marketing and sales. Joint ventures can open up new routes and markets for Canadian travellers and allow access to more destinations, including more international markets, without needing to book separate tickets on different carriers.
The Transportation Modernization Act (Act) set out the new voluntary process where air carriers can seek authorization for joint ventures from the Minister of Transport, and to allow the Minister to consider both the impacts on competition (assessed by the Commissioner of Competition) and the public interest when authorizing such arrangements.
New regulations stemming from the Act also allow for the recovery of costs from participating air carriers, for Transport Canada activities related to the public interest review of joint ventures.
“With higher international ownership limits in effect and now a new review process for air carrier joint ventures, we are once again delivering on our promise to make the Canadian air sector more competitive and to provide access to more destinations for Canadian travellers. A joint venture is a possible option for air carriers to consider to expand their global networks while maximizing efficiency gains that may lead to lower air fares.”
The Honourable Marc Garneau
Minister of Transport
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