Air Canada (AC, Montréal Trudeau) is reportedly keen to once again negotiate a transborder joint venture with United Airlines (UA, Chicago O'Hare), should changes to Canada's legislation be approved, reports Bloomberg. Yves Dufresne, Air Canada's Vice President of Alliances and Regulatory Affairs, said that the airline was 'definitely interested' in pursuing a partnership with the American carrier 'when the timing is right'.
"The Canada-US bilateral air transport market is still the largest in the world," Dufresne said. "We made an attempt several years ago but there were so many roadblocks."
The Canadian Parliament is currently reviewing an amendment (Bill C-49) to the Transportation Act which, according to Transport Minister Marc Garneau will "liberalize international ownership restrictions for Canadian air carriers [and] develop a clear and predictable process for approval of airline joint ventures."
The proposed amendments would see foreign ownership limits lifted from 25% to 49%, however no single foreign investor would be able to hold more than 25%, and international air carriers could not collectively hold more than 25% of a Canadian airline.
The bill will also allow the Minister for Transport to review joint venture agreements, rather than the Competition Bureau, in a new and more transparent process. This, Garneau believes, will allow joint ventures to be assessed for their wider public interest benefits, rather than just competition and economic impacts.
Air Canada and United were in talks in 2012 over a limited joint venture which, in order to satisfy regulators, excluded fourteen transborder routes. Although this opportunity was tentatively approved, the airlines did not finalise it.
According to ch-aviation capacity data, Air Canada holds more than 44% of the transborder business, followed by United Airlines with 13%. Together, their capacity is approximately 217,000 seats per week.
