Higher airfares, customer complaints fuelling study into Canada’s airline sector

Market concentration, higher prices and a mounting tally of customer complaints are fuelling a Competition Bureau study into Canada’s airline industry.

In a release Monday, the regulator said two carriers continue to dominate the skies while new airlines seem to struggle to enter the market. Domestic fares also appear “relatively high” and more and more passengers are filing complaints, it said.

The backlog of customer complaints about airlines has hit a record high topping 72,000, according to the Canadian Transportation Agency.

The bureau’s review, which will draw on feedback from the public and interested parties, looks to pave the way for recommendations to government that would “make it easier for new businesses to compete and easier for consumers to make informed choices.”

First announced on May 9, the market study is the bureau’s first since it gained new powers in December that include the ability to compel information from companies.

Matthew Boswell, the competition commissioner, stressed the importance of the airline industry to residents and the economy.

“Since the Canadian population is spread out over vast distances, other modes of transportation may not be feasible replacements for air travel. More competition in the industry will mean lower prices, better services, and improved productivity,” Boswell said in the release.

Over the past 13 months, newer low-cost carriers Swoop and Lynx Air have disappeared from the skies and WestJet scooped up Sunwing Airlines. The latter two made up 72 per cent of seat capacity from Western Canada last year, according to the bureau.

Meanwhile, Air Canada and WestJet have strengthened their grip on the domestic market over the past year, even as rival Porter Airlines rapidly expands