High fares possible as Canadian airline market consolidates

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After entertaining new entrants for several years, Canada's airline market is once again on the path to consolidation, raising the likelihood of higher fares and fewer flight options.

Young boys look out at Air Canada and WestJet planes at Calgary International Airport on August 31, 2022. THE CANADIAN PRESS/Jeff McIntoshairlineSince May, newer low-cost carriers Swoop and Lynx Air have disappeared from the skies and WestJet has scooped up SunwingThe latter two alone made up 37 per cent of seat capacity on direct flights to sun destinations and 72 per cent from Western Canada last year, according to an October report from the Competition Bureau.

Air Canada and WestJet command 79 per cent of domestic traffic as of this month versus 74 per cent a year earlier, statistics from aviation data firm Cirium show. The regulator wound down its probe roughly five years later without taking further steps. The decision came despite then interim competition commissioner Matthew Boswell accusing WestJet and Swoop in 2018 of “engaging in ... predatory pricing by significantly decreasing the prices of their passenger tickets to a level that appears to be below their avoidable costs.”

 

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