Air Canada and United Airlines have asked the Minister of Transport to approve an update to their transborder joint venture. In operation since 2022, the joint venture lets them coordinate schedules, fares, marketing, sales and revenue management on many Canada–U.S. routes. Under the Canada Transportation Act, the Minister can authorise it, authorise it with conditions, or refuse it in the public interest. The Competition Bureau must report on how it would affect competition.

The Bureau’s finding

A 2012 consent agreement, which has the force of a Competition Tribunal order, bars the two airlines from coordinating on 10 routes. The new proposal seeks “expanded coordination, including price coordination” on those routes. The Bureau’s report, dated 16 October, concludes the change “would create and entrench a monopoly or near-monopoly on key transborder routes”.

2025 non-stop passenger shares (Air Canada / United, plus other carriers):

  • 100% combined: Toronto–Cleveland (100/0), Montréal–Washington (76/24), Toronto–Denver (55/45), Toronto–Houston (49/51), Ottawa–Washington (44/56).
  • 65–83% combined: Toronto–San Francisco (63/20; Porter 17), Montréal–Chicago (47/34; American 19), Vancouver–San Francisco (35/41; Flair 20, WestJet 5), Toronto–Washington (47/18; Porter 18, American 17).
  • Ottawa–New York: United 42%, Porter 58%.

The Bureau’s simulation found “materially higher prices on eight of the ten” routes, “amounting to millions of dollars in consumer harm annually”. The largest predicted increases were on Ottawa–Washington, Vancouver–San Francisco, Montréal–Washington, Toronto–Denver and Toronto–Houston. The Bureau also said FAA slot and scheduling limits at O’Hare, Newark, LaGuardia and JFK make it hard for new competitors to enter.

“Our review found that allowing Air Canada and United to coordinate on these routes would likely reduce competition on key Canada-U.S. routes and lead to higher prices for travellers.” — Jeanne Pratt, Interim Commissioner of Competition

What happens next

Transport Canada is running a public-interest assessment that looks at economic impacts and competition. Canadians can comment on letstalktransportation.ca until 15 November. Minister Steven MacKinnon has said the review will ensure “any expanded cooperation between these carriers benefits Canadians”. He is not bound by the Bureau’s findings.

Citizen impact: Travellers on these 10 city pairs would bear the cost, especially on routes to Washington, Denver and Houston. Neither the Bureau nor the airlines have published a per-ticket figure. Comments to Transport Canada are open until 15 November.