Air Canada has blasted the Canadian Competition Bureau’s attempts to block its joint venture with United Continental, saying it is “fundamentally misconceived”.
Air Canada and United Continental want to set up a transborder joint venture on flights between the US and Canada, allowing them to cooperate on flight schedules and share revenues.
Melanie Aitken, the Commissioner of Competition, outlined in June her plans to block the joint venture and to challenge existing coordination agreements between the two airlines.
She said the proposed tie-up would lead to “significantly higher” prices, a “monopoly” on ten US-Canada routes and “substantantially reduced competition” on a further nine.
“The proposed joint venture would allow Air Canada and United Continental to operate and set prices as one airline,” said Aitken.
“If allowed to proceed, consumers will face higher prices and even less choice on key, high demand air passenger routes.”
Air Canada has this week filed a reply to the commissioner’s objections, stating that the joint venture is actually “intended to and will lead to lower prices and further enhance flight options”.
The commissioner’s stance is “wholly inconsistent with the international air transportation policy of the government of Canada”, said the airline, which supports the liberalisation of competition between air carriers in different countries.
The proposed joint venture would fundamentally lead to the “substantial benefit of Canadian consumers and the Canadian economy,” the airline added.
Air Canada also accused the commissioner of seeking to “unwind longstanding agreements” between Air Canada and United Continental, which have “brought substantial benefits to airline passengers travelling on routes that originate in Canada and terminate in the United States and vice versa”.
The airline has called for the commissioner’s application to block the proposed transborder joint venture to be dismissed.
The competition bureau must respond to Air Canada by the end of August.