Air Transat (TS, Montréal Trudeau) has appeared before a Canadian House of Commons Standing Committee on Transport, Infrastructure and Communities to call for stricter provisions related to international joint ventures.
In its submission, Air Transat says that given the nature of joint ventures in consolidating critical business functions, they should be considered de facto mergers.
"Consequently, Transat proposed that planned international joint ventures be subjected to a review and authorization framework using largely the same provisions regarding mergers as the Canada Transportation Act," the airline said in a press statement.
The Transportation Modernization Act is currently under review in the Canadian parliament. The act looks to allow greater flexibility between airlines which want to coordinate or cooperate in the areas of pricing, routing, scheduling, capacity, or ancillary services. Under the more flexible arrangement, airlines may notify the Transport Minister about planned cooperative activities, but are not required to, nor must they notify the Commission of Competition unless required to under the Competition Act.
The amended act will also establish a new passenger rights regime, and allow an increase in the foreign ownership of airlines. Air Transat has indicated it is favour of a passenger bill of rights.
In a statement released earlier this year, Air Canada was also in favour of a charter of rights for passengers. Additionally, it welcomed a change in foreign ownership definition, saying that increasing the limit from 25% to 49% would improve "access to international investors and global capital markets for Air Canada".
The airline was also broadly in favour of easier rules around cooperation.
"The proposed amendments to the legislative provisions governing joint ventures in the airline industry should facilitate the opening up of new markets by Air Canada and its joint venture partners and accelerate projects that are currently under consideration," Air Canada said.
However, Transat disagrees, saying stricter measures are needed in order to ensure healthy competition in the market.
