New process for air carrier joint ventures in Canada

The authority to review and authorize joint ventures between airlines in Canada is now being reviewed and authorized by the Minister of Transport.

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.

The new review process allows the Minister of Transport, currently the Honourable Marc Garneau, to authorize a proposed joint venture that would be in the public interest by balancing those interests with impacts on competition.

This was a key priority from the Minister’s Transportation 2030 strategy to promote greater choice and connectivity in the air sector.

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.

Such 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.