Footnotes - Abuse of Dominance

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 ¹    The full text of Sections 78 and 79 and the regulations defining anti-competitive acts in the airline industry are reproduced in Annexes A and B respectively.

²    The undertakings provided by Air Canada, which have the force of law with the passage of Bill C-26, can be viewed at the Bureau’s web site http://competition.ic.gc.ca In part, these Undertakings require Air Canada to, surrender slots at Pearson International Airport, surrender airport facilities at various airports across Canada, allow access to its Aeroplan program to competing Canadian carriers, offer interlining and joint fare agreements to competing Canadian carriers and alter its travel agent override programs to reduce bias in favour of Air Canada

³   Annex C contains the statutory provision relating to cease and desist powers contained in section 104.1 (1) of the Competition Act.

⁴   On October 12, 2000, the Commissioner issued a temporary order against Air Canada pursuant to section 104.1. The Competition Tribunal upheld the order in a decision rendered on November 24, 2000. Air Canada is currently appealing the Tribunal’s decision and has commenced litigation in the Quebec Superior Court to challenge the authority granted to the Commissioner under section 104.1.

⁵    Based largely on the jurisprudence emanating from the Competition Tribunal, the Bureau will shortly be publishing a bulletin outlining in detail its approach to enforcing these provisions. Accordingly, while this document deals specifically with the Bureau’s approach to enforcement of specific amendments and regulations with respect to the airline industry, readers should also refer to the general enforcement guidelines with respect to sections 78 and 79 for further information and guidance.

⁶   It is not necessary that the practice of anti-competitive acts take place within Canada, but that its impact has an effect in Canada.

⁷   The market may, for antitrust purposes, include regions outside Canada.

⁸   In the Gemini II case, the Competition Tribunal stated in discussing the geographic dimension of airline markets that "an airline market is defined as a city-pair".Canada (D.I.R.) V. Air Canada, (1993) 49 C.P.R. (3d) 7at 40 (Competition Tribunal).

⁹   In the Gemini II case, the Tribunal accepted that the relevant product market can be defined as passenger airline service.

¹⁰    For example, a daily departure at 8:00 a.m. would be considered a flight.

¹¹    This particular example deals with the case in which an airline adds a flight in response to new entry. However, the same type of calculation can be made in the case where an airline maintains capacity in the face of entry.

¹²    For example, consider a flight departing daily at 8:00am from Halifax to Toronto for the month of October. The Bureau, would determine both daily flight revenue and avoidable costs on an Available Seat Mile (ASM) basis. The Bureau would consider whether the average revenue per flight for October covered its avoidable costs. In addition, the Bureau would consider the number of times during October that the flight’s daily revenue did not cover its avoidable costs.

¹³    However, the denial of access to essential facilities or services is not the only way that a dominant carrier can raise a rival’s costs.