Air Canada (AC, Montréal Trudeau) and competitor WestJet (WS, Calgary) are facing allegations of anti-competitive behaviour and possible collusion after the flag carrier terminated its flights from Saskatoon to Calgary.

The Greater Saskatoon Chamber of Commerce has asked Canada's Competition Bureau to examine Air Canada's decision to terminate its air service on the route, arguing it harms competition as it leaves travellers with less choice and higher fares.

"The Chamber believes Air Canada's decision to abandon a longstanding and profitable domestic route, and cede ground to its closest direct competitor, [WestJet], is concerning and warrants the Bureau's intervention, it commented in a statement. "WestJet will be the only airline offering direct service between Saskatchewan and Calgary now that Air Canada's route cancellation has taken effect, giving it an anti-competitive monopoly," the Chamber said.

It also has asked the Bureau to determine if Air Canada and WestJet "either expressly or tacitly agreed to allocate markets, contrary to the conspiracy provisions, or the civil competitor collaboration provisions, of the Competition Act".

"Route changes through 2022 suggest that Air Canada and WestJet took steps to soften competition in the oligopolistic Canadian airline industry. Air Canada withdrew competition from WestJet's traditional home-turf regional routes, and WestJet did the same in the traditional home-turf regional routes of Air Canada," the Chamber said. "Even if the conduct falls short of being an 'agreement' between the airlines, it amounts to an abuse of dominance by Air Canada and WestJet where the airlines have engaged in conduct intended to harm competition, thereby improving their respective positions in the market."

The Chamber's 11-page submission to the Bureau contends that Air Canada's cancellation of service from Saskatoon to Calgary amounts to a net loss of competition and choice for business and leisure travellers, leaving WestJet, its closest, direct competitor as the sole provider of comparable service to Saskatoon and Saskatchewan.

"Air Canada has not adequately explained its' business decision' to disregard strong and growing demand and eliminate a route that has been consistently profitable for over 30 years," said Saskatoon Chamber Chief Executive Officer Jason Aebig, noting forecasts that predict strong economic and population growth for Saskatoon and Saskatchewan in the years ahead. "If Air Canada is unwilling to explain its decision to its customers and stakeholders, it can explain its decision to its regulators."

Air Canada was not immediately available for comment.

In a statement to CTV News, the flag carrier said it continued to rebuild its business in a prudent and disciplined way, which meant looking at every aspect of its network and deploying its resources where they would be most productive. "After careful review, we've decided that we must continue to strategically focus on rebuilding our main hubs of Toronto Pearson, Vancouver International and Montréal Trudeau. As a result, we have made the difficult decision to suspend a number of regional routes from Calgary, effective January 2023."

The company dismissed claims of anti-competitive practices as unfounded. "Air Canada complies with all its regulatory obligations in relation to route suspensions," it said. "Air Canada strongly rejects any allegations of anti-competitive conduct, and even after these route changes, remains a strong competitor across Canada, including in Saskatchewan."

WestJet, in a statement shared with ch-aviation, said: "WestJet is committed to compliance with all laws and regulations, including competition law, and as a foundational aspect of such compliance, does not engage with our competition about network decisions or any other aspects of our business."

WestJet said it remained committed to serving Saskatchewan and "keeping air travel both affordable and accessible", having done so for nearly 27 years. "We worked to restore services from the region suspended during COVID, and our commitment to and investment in Saskatchewan will continue as part of our new strategic direction, which will support the province’s visitor economy and business and leisure connectivity. To this end, this month WestJet added additional daily service from both Saskatchewan airports to Calgary," it said.