Saturday,  October 16, 2021  11:49 pm

"Canada closed to competition," says WestJet, after Ottawa approves Air Canada-Transat deal

"Canada closed to competition," says WestJet, after Ottawa approves Air Canada-Transat deal
Ed Sims, WestJet president and CEO. (File photo)
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

WestJet is saying that Canada is now closed to healthy competition following the federal government's approval of Air Canada's proposed takeover of Transat A.T.  

The much-talked-about transaction was green lit by Ottawa on Thursday (Feb. 11). 

Minister of Transport Omar Alghabra said the takeover will bring "greater stability to Canada’s air transport market," adding that it will be accompanied by conditions that support international competition, connectivity and protect jobs. 

But WestJet is saying that the transaction was approved "without significant remedies." 

READ MORE: Government of Canada approves Transat-Air Canada deal

"This decision shows blatant disregard for all Canadians who believe in healthy competition," said Ed Sims, WestJet president and CEO, in a press release issued late last night titled "Canada closed to competition." 

"When Canadians look to explore the world and reunite with family and friends once again, they will face fewer choices and higher fares," Mr. Sims said.

The government's own Competition Bureau stated in regards to the proposed purchase, "Eliminating the rivalry between these airlines would result in increased prices, less choice, decreases in service and a significant reduction in travel by Canadians on a variety of routes where their existing networks overlap," Sims noted. 

Still under review  

Indeed, in March 2020, the Competition Bureau of Canada was unfavourable to the Air Canada-Transat transaction. 

However, it should be noted that their analysis was done before the COVID-19 pandemic outbreak.  The federal government green lit Air Canada's purchase of Transat AT on Thursday (Feb. 11).

But the European Commission, which oversees competition policy in the 27-member European Union, is still studying the deal to determine if it will, in fact, hinder competition, increase prices and lead to fewer choices for consumers.

The $190 million-dollar transaction has yet to receive a green light from the EU, which has been delaying their decision to approve the purchase for several months now. 

An announcement from EU regulators is expected very soon, however. 

Flying into a monopoly? 

This is isn't the first time that WestJet has spoken out against Air Canada's takeover of Transat. 

Last month, the Globe and Mail reported that the Calgary-based carrier was urging Ottawa to reject the deal, or draft conditions that would limit the combined companies’ pull in the market.

READ MORE: WestJet asking Ottawa to reject Air Canada-Transat deal or enforce conditions

According to the Jan. 20 report, WestJet sent a submission to then-Transport Minister Marc Garneau on Jan. 3, saying that the COVID-19 pandemic must not be used as an excuse to allow Canada’s biggest airline to buy its third-biggest.

WestJet, notably, reportedly asked federal officials to prevent Air Canada from offering its Aeroplan loyalty program to Transat passengers, saying that it would “lock up otherwise contestable customers” and lead to a near-monopoly on international routes from Canada to Europe.

"It is hard to imagine a deal as anti-competitive in any industry where the number one player buys number three without meaningful remedies," concluded Mr. Sims in his release last night. "This is a serious setback to Canada's economy." 

"The Competition Bureau themselves described such cosmetic remedies as inadequate. Canadians should be profoundly disappointed."

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