Saskatoon Chamber of Commerce asks federal watchdog to investigate Air Canada

The Greater Saskatoon Chamber of Commerce has filed a complaint with Canada’s Competition Bureau over Air Canada’s decision to stop flights from Saskatoon to Calgary.

“Air Canada has not adequately explained its ‘business decision’ to disregard strong and growing demand and eliminate a route that has been consistently profitable for over 30 years,” said Chamber CEO Jason Aebig in a news release.

The complaint comes as WestJet confirmed it is adding more direct flights between the two cities.

The Chamber is asking the federal agency to determine whether the two carriers either "expressly or tacitly came to an agreement to allocate markets" in violation of the Competition Act.

“If Air Canada is unwilling to explain its decision to its customers and stakeholders, it can explain its decision to its regulators," Aebig said.

“Generations of taxpayers have supported the operation of our airlines and national air services system with the expectation that they work for the benefit of all Canadians, in every province and region,” Aebig said.

“They have a responsibility to the country, and specifically the travelling public, to account for decisions that are clearly undermining competition and choice.”

“The Saskatoon/Regina to Calgary routes are of vital importance to the residents and business community of Saskatchewan, as well as those wishing to visit or do business in Saskatchewan,” the 11-page complaint document states.

“Air Canada cancelling these routes to and from Saskatchewan, in spite of their profitability, will leave WestJet as the only airline offering direct service between Saskatchewan and Calgary, giving it an anti-competitive monopoly," the complaint says.

AIRLINES RESPOND

In a statement to CTV News, Air Canada said it dropped the flights in question to help rebuild its business "in a prudent way."

The airline pointed to its daily flights to Vancouver and Toronto, as well as a new Monteral flight which will be added in June, as signs of its continued commitment to offering service in Saskatchewan.

The company said any claims of anti-competitive practices are unfounded.

"Air Canada complies with all its regulatory obligations in relation to route suspensions," the statement said.

"Air Canada strongly rejects any allegations of anti-competitive conduct, and even after these route changes, remains a strong competitor across Canada including in Saskatchewan."

WestJet also sent a statement to CTV News, saying they have worked to offer affordable flights out of Saskatoon, including to Calgary.

“We appreciate the continued support of our loyal guests from across Saskatchewan, where both markets we serve are critical to WestJet’s long-term success,” the statement said.

“We remain committed to keeping air travel both affordable and accessible for our guests and we welcome feedback and engagement with the local communities about our service offerings. WestJet is committed to compliance with all laws and regulations, including competition law, and as a foundational aspect of such compliance, does not engage with our competition about network decisions or any other aspects of our business.”

'SIGN OF DESPERATION'

An aviation management expert says the Chamber is in over its head.

“It's a sign of desperation, as far as I'm concerned,” said John Gradek, faculty lecturer in aviation management at McGill University.

“They're using scare tactics and they're using some accusations which are going to be extremely difficult to prove. They're asking the Competition Bureau to get involved in this and it's basically grasping at straws.”

Gradek said in the Canadian aviation industry it was up to airlines to decide where they offer service.

“Canadian regulation basically allows airlines to fly into markets and to leave markets. So it is a function of the airline's own strategic plan and strategic orientation to basically decide how to serve a market, and when to enter into a market, and when to leave a market and that is wholly within the responsibilities and accountabilities of the airline.”

Air Canada made the announcement in December. At the time, there were eight daily flights from Saskatoon to Calgary, two from Air Canada and six through WestJet. As of January 16, only WestJet is operating flights between the two cities.

“Prices have already gone up several hundred dollars in response to Air Canada’s cancellation of the route,” the Chamber complaint states.

“Compared to neighbouring provinces, Air Canada’s decision creates unnecessary barriers for Saskatoon’s current businesses, research institutes and residents, as well as those wishing to visit, study or do business here,” Aebig said.

'IMPORTANT HUB'

In the complaint, Calgary is described as a gateway to the rest of the world for businesses in Saskatchewan.

“Calgary is a particularly important hub for the Saskatoon and broader Saskatchewan business communities and the anchor industries of uranium, oil, gas, potash, and other critical minerals. Companies such as Nutrien, Cameco, BHP, Federated Cooperatives, Orano, Vendasta and many of Saskatoon’s other top manufacturing and exporting companies rely heavily on air travel to support and develop markets across North America and around the world,” the complaint said.

“Air Canada's looking at its operations all the time and understanding the market behaviour. And the market behaviour in the wintertime between Calgary and Saskatchewan is probably light traffic, and the airplanes are too big,” Gradek said. “Once demand picks up again, the odds are they'll be back.”

The Chamber said that plans by Flair Airlines to offer Saskatoon to Calgary flights later this year will not replace the loss of Air Canada.

“Flair’s current expansion plans are centred on deploying capacity to leisure markets,” the document said. “There is no equivalency between Flair and Air Canada on service, convenience, or connectivity. Flair cannot provide an effective substitute for business travellers, who will be left with no choice but to travel WestJet.”

Aebig said the airlines have a “responsibility to the country, and specifically the travelling public,” to answer for decisions that impact competition and choice.

“We trust the Competition Bureau to clarify the issues,” said Aebig. “What is clear is business confidence is strong, our economic horizon is bright, and growing numbers of people are eager to visit, learn and work in Saskatoon and Saskatchewan.”

The complaint was filed on Jan. 17.

--With files from Tyler Barrow