Airline Alliances: Justifying the Bureau’s Intervention

Abstract

In Airline Alliances: Justifying the Bureau’s Intervention, the Canadian Competition Bureau’s 2011 challenge of the proposed joint venture between Air Canada and United Continental Holdings is analysed from a Competition Law perspective, through the lens of the nuanced environment in which airlines operate in Canada. Despite the multitude of arguments supporting the pro-competitive effects of airline alliances, particularly with regards to airlines operating in the United States, Europe and Australia, this paper concludes that airline alliances are not necessarily pro-competitive within the Canadian context. Although airline alliances are theoretically well-aligned with the purposes of the Canadian Competition Act, the markets in which such alliances are permitted to operate must contain mechanisms to constrain the excessive use of market power. With current Canadian policies fostering protectionism, the Competition Bureau is arguably justified in taking a more aggressive approach with regards to airline alliances than its global peers.