Competition Bureau
ToolsRelated topicsResourcesCompetition Bureau settles case with Air CanadaOTTAWA, October 29, 2004 - The Competition Bureau and Air Canada have resolved their litigation before the Competition Tribunal concerning allegations that Air Canada had engaged in anti-competitive practices directed against low cost carriers WestJet and CanJet, in 2000 and 2001. "I am very pleased that we've been able to resolve this matter and retain the Tribunal's earlier decision in this case. This case has clarified the application of an avoidable cost test to assess predatory pricing in the airline industry," said Sheridan Scott, Commissioner of Competition, "The Tribunal's decision will help preserve and promote competition for the benefit of all Canadians." In March 2001, the Bureau filed an application with the Tribunal seeking an order prohibiting Air Canada from operating flights on certain routes in eastern Canada at fares that did not cover their avoidable costs. The case was divided in two parts: phase one dealt with the application of the avoidable cost test and phase two would have determined if Air Canada had engaged in an abuse of dominant position under section 79 of the Act. The Tribunal's phase one decision was released in June 2003. The Bureau believes that the principles established by the Tribunal will be relevant for future cases which may arise in similar circumstances. "In light of the passage of time and the significant changes in the industry, we have concluded that it would not be in the public interest to pursue the second part of this case," said Ms. Scott. There have been significant changes to Canada's airline industry since the litigation began in 2001, including the entry and growth of low cost carriers. Any future complaint of predatory pricing in the airline sector will be considered in the context of current competitive conditions. The Bureau has recently clarified its approach to enforcing these provisions in an open letter published on its Web site on September 23, 2004. The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. For media enquiries, please contact:Tim Weil For general enquiries, please contact:Information Centre 
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Created: 2004-10-29 Updated: 2005-04-13 |
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