Transat fighting Bill C-49’s provision

Transat A.T. Inc. is calling on the government to remove a joint venture provision from proposed legislation amending the Transportation Act, saying it is unnecessary and detrimental to competition among airlines in a market dominated by one carrier.

The proposed Bill C-49, which is being discussed at a committee hearing in Ottawa this week, would allow Marc Garneau, the minister of Transport, to approve applications for joint ventures between two or more airlines, considering proposals from both a competition and public interest perspective. Under the current regime, joint ventures, including those between Canadian and global carriers, are reviewed under the Competition Act.

In a brief that is expected to be submitted to the transportation committee Thursday, the Montreal-based operator of Air Transat said the proposed approval process is not necessary as Canada is well served by the Competition Act, and that existing provisions “create a transparent and balanced regime in the assessment of competition policy objectives and broader public interest considerations.”

“The only Canadian airline currently involved in one or more joint ventures and for which these proposed provisions would be of immediate and direct interests is Air Canada,” it said in its submission.

George Petsikas, Transat’s senior director of government and industry affairs, said the provisions come with potential implications for Canadian airline competition, as well as for consumers in the long-term — that reduced competition will result in higher market concentration and therefore higher fares. “We want to ensure that nothing impedes the ability for fair competition to continue in Canada and we believe that this is not something, the way it’s proposed in Bill C-49, that will achieve that goal,” he said. “We are asking for a rebalancing of the powers between the competition commissioner and the minister of Transport to approve these sort of ventures which we point out already have very concentrated market shares in and out of Canada.”

The new process would see the minister work with the commissioner of Competition.