Canada's Competition Bureau (CB) says it has launched an investigation into Canadian North (5T, Yellowknife) and First Air (Carp) over concerns their business practices may have been prejudicial to rival operators, including failed start-up Go Sarvaq (Iqaluit), attempting to gain access to their markets.
According to the Canadian Broadcasting Corporation (CBC), the CB's investigation focuses on the terms of Canadian North's codeshare agreement with First Air as well as allegations they engaged in predatory pricing in a bid to keep GoSarvaq out of their niche.
A virtual low-cost carrier, GoSarvaq had planned to charter a B737-400 from Flair Airlines (F8, Kelowna) for flights from Ottawa International to Halifax via Iqaluit in May this year. However, the start-up called off the launch, later abandoning it altogether, after Canadian North and First Air suddenly dropped their prices to what GoSarvaq president Adamee Itorcheak said were the lowest ever seen for ten years.
It subsequently filed a complaint with the CB culminating in a court order requiring Canadian North and First Air to turn over their over financial documents as well as telephone logs, calendars, and appointment books for the bureau to investigate the allegations.
Insofar as the codeshare agreement is concerned, Canadian North's president Steve Hankirk told CBC that the partnership, which came into effect in May 2015 shortly after merger talks with First Air fell through, has allowed the two carriers to more "efficiently service both cargo and passenger demand and has enabled major schedule improvements."
Canadian North says it is cooperating with the CB's investigation.
