TRAN Committee News Release

December 8, 1999

Today the House of Commons Standing Committee on Transport released its report Restructuring Canada’s Airline Industry: Fostering Competition and Protecting the Public Interest. The report follows 6 weeks of intensive hearings during which the Committee held 33 meetings, totalling about 82 hours, to receive testimony from 101 witnesses on a restructured airline industry. Presenters to the Committee included charter, independent and regional carriers, the two national carriers, representatives of two air alliances, representatives of organized labour, travel agents, consumer advocates and local airport authorities. The Committee received 64 briefs and letters.

The report’s 42 recommendations are designed to foster healthy competition and protect the public interest in a restructured airline industry. The Committee believes that rather than re-regulating the airline industry, the most appropriate way of fostering competition is to lower or remove as many barriers to full participation in the marketplace as possible. However, mechanisms must also be put in place to protect the public interest.

To this end, recommendations are made concerning more government control over predatory behaviour, higher airline ownership limits, improved access to airport slots and facilities, expanded interlining and code sharing arrangements, an examination of regional affiliate divestiture, negotiation of reciprocal cabotage, exploration of Canada-only carriers, development of modified sixth freedom rights and liberalization of international air charter policy.

To protect the public interest, recommendations are made in a number of areas. Specifically, the report addresses safety as a priority, government oversight of air fares, preservation of air services to small and remote communities, assistance to financially-vulnerable airports, protection for airline employees, opportunities for travel agents to "negotiate" commissions, a monitoring and review process to assess the impact of a restructured industry on the public, and commitments by a dominant carrier.

Together, these recommendations form a policy framework for a restructured airline industry that will satisfy the twin goals of fostering competition and protecting the public interest. The Committee believes that one of the guiding principles in developing a policy framework is striking the appropriate balance between protecting the public interest and not impairing the competitiveness of a dominant carrier.

The report is available on the Internet, at http://www.parl.gc.ca.

For further information, contact:

Stan Keyes, M.P., Chair of the Standing Committee on Transport at (613) 995-1757 (phone) or (613) 992-8356 (fax)

Guyanne Desforges, Clerk of the Committee, at (613) 996-1496 (phone), (613) 992-7974 (fax) or (e-mail).