Competition Bureau Continues Air Canada Inquiry

OTTAWA, December 28, 2000 — The Competition Bureau announced today that it expects to complete its investigation into allegations of anti-competitive behaviour by Air Canada towards CanJet by the end of January 2001.

On December 7, 2000, the Bureau obtained a court order requiring Air Canada to provide necessary information to the Bureau by December 20, 2000. At that time, Air Canada indicated it was unable to provide all the required information until early January 2001. The Bureau needs to analyse this further information in order to complete its inquiry.

"Once we have all the facts, we will come to a final conclusion and take appropriate action," said André Lafond, Deputy Commissioner of Competition, Civil Matters.

As of December 31, 2000, the temporary cease and desist order against Air Canada will expire. The order has been in place for 80 days, the maximum amount of time available to the Commissioner under section 104.1 of the Competition Act. The Bureau does not expect Air Canada to re-introduce at this time, the discount fares that were prohibited by the order.

The Bureau began its investigation in September 2000 after receiving a complaint from CanJet Airlines alleging that when it entered the market Air Canada reduced its fares to target CanJet on specific routes.

• October 12, 2000 -- The Commissioner issues a temporary order requiring Air Canada to cease and desist from offering or selling special discount fares on five routes in Eastern Canada on the grounds that CanJet was likely to be eliminated as a competitor on specific routes and suffer other economic harm.
  
  
• October 31, 2000 -- The Commissioner extends the order to apply to three routes: Halifax-Ottawa, Halifax-Montreal and Halifax-St-John's.
  
  
• November 17, 2000 -- Air Canada challenges the temporary order in front of the Competition Tribunal.
  
  
• November 24, 2000 -- Competition Tribunal upholds the Commissioner's order and extends it until December 31, 2000. Air Canada is appealing the Competition Tribunal's decision.

Click here for a detailed chronology of events.

Air Canada is also challenging the constitutionality of the power to issue a cease and desist order before the Quebec Superior Court. The Commissioner will be defending the validity of the special powers given to him under recent amendments to the Competition Actdealing with the airline industry.

The Competition Bureau is an independent law enforcement agency whose mandate is to maintain and encourage fair competition in Canada.

For more information, please contact:

Cynthia Grant
Communication Advisor
Communications Directorate
819-994-0349