Fri. Feb 23rd, 2024

The two largest airlines share 75% of the Canadian market.

Air Canada and WestJet, an unshakable duopoly

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It is difficult for new players in the airline industry to dethrone the giants, Air Canada and WestJet, which hold three-quarters of the domestic market.

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    Despite the arrival of new competitors in recent years, two air carriers control three-quarters of the Canadian market, which has an impact on the price of plane tickets and services offered, according to experts.

    According to airline data firm Cirium, Air Canada holds nearly half (46%) of the domestic market, while rival WestJet occupies 29%. Far behind are the companies Flair, Porter, Canadian North and Lynx, among others.

    Air Transat, which had approximately 1% of the Canadian market at last year, has since stopped offering domestic flights. From now on, the Montreal carrier focuses exclusively on journeys to destinations abroad.

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    This duopoly – a market dominated by two companies – would have an impact on the price of flights, particularly in less-served regions, according to John Gradek, a professor at McGill University and former head of pricing at Air Canada. /p>

    It's more expensive to travel between Sept-Îles and Montreal than to #x27;go from Montreal to Paris. It really is a situation of lack of competition.

    A quote from John Gradek, Professor of Aviation Management, McGill University

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    Internationally, there is a lot of direct and indirect competition, which regulates prices and improves the offer for consumers. But Canada as such is so small in terms of markets that we let these major carriers, like WestJet and Air Canada, operate in a virtual monopoly and therefore, prices are higher, he adds.< /p>Open in full screen mode

    John Gradek is a professor of aviation management at McGill University and former executive at Air Canada.

    Customers believe that the lack of competition not only leads to higher prices for airline tickets, but that this dominant position of the major Canadian carriers makes them a little complacent with regard to customer service and processing complaints.

    For many trips or to have a direct, non-stop connection, Air Canada is often the only option, says Eve Kinizo, who says he no longer wants to fly with this company since his nightmare experience last September.

    The Toronto filmmaker says Air Canada counter staff forced her to put her camera and equipment – ​​which she planned to bring on the plane – in her checked baggage.

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    Eve Kinizo, outraged by her recent experience with Air Canada, believes that the lack of competition makes the company complacent about the service customer service and handling complaints.

    Subsequently, he was refused boarding, without explanation, says Ms. Kinizo. And without even having taken off, my luggage was returned to me damaged, she laments.

    I've never seen anything like this. We are treated like trash. It's disturbing and inhumane.

    A quote from Air Canada customer Eve Kinizo

    She filed a complaint and a request for compensation from the airline, but there was no follow-up.

    It is also not possible for him to consult a complaint file online: the link on the Air Canada website has not been working for several weeks. Call center agents also do not have access to this information.

    The company responded to us by email that a computer update caused this technical problem. We are currently working to resolve this malfunction as quickly as possible, says Christophe Hennebelle, vice-president of communications at Air Canada.

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    For several weeks, the link to your complaint file on the Air Canada website has not been working. The company indicates that the problem occurred during a computer update.

    The spokesperson adds that Air Canada has indeed received Ms. Kinizo's complaint and that the company will respond as soon as possible.

    Customer service, in this very competitive market, is a strong priority for Air Canada, and we are constantly investing to better serve our customers, underlines Mr. Hennebelle. When unfortunately we are unable to fully satisfy our customers, we strive to handle complaints satisfactorily.

    La Torontoise, for its part, 'is turned to the Canadian Transportation Agency, but the processing time for complaints is currently around 18 months.

    Approximately 62,000 airline files are still being processed, the federal agency confirms. More than 43,000 of these complaints have been filed this year.

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    WestJet, for his part, believes that competition in the industry in Canada has never been so healthy, especially with the emergence of new players in recent years.

    WestJet is poised to take a leadership role with an ambitious growth plan and commitment to providing low-cost travel options for Canadians from coast to coast, says its spokesperson Madison Kruger, in an emailed statement.

    Last month, Flair Airlines CEO Stephen Jones said he wanted to tackle the duopoly in the Canadian market. The Edmonton company has been increasing its routes in recent years, particularly in the east of the country. In May, the airline will add destinations to the island of Newfoundland and a route between Toronto and Quebec City.

    People in these areas have been a bit stuck having to take expensive flights, because the costs of the carriers present are very high. We really strive to be efficient, which allows us to operate while offering lower fares.

    A quote from Stephen Jones, President and CEO, Flair Airlines

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    In addition to expanding its flight program, Flair Airlines must also restore its image. From January to March of this year, the Canadian Transportation Agency received approximately 21 complaints for every 100 flights from the airline.

    Its Calgary rival , Lynx Air, for its part, has more than tripled its market share in one year. Founded in April 2022, the company hopes to increase its presence in the domestic market, offering 5% of available seat kilometers next year.

    The discounted airline offer continues to be favorably adopted by Canadian travelers, says the company.

    Air Transat and Porter recently decided to create a joint venture and combine their networks. This partnership should increase competition in the domestic market, according to the two companies, because it will make it possible to offer more routes to customers.

    Thanks to its robust domestic network, notably linking Toronto Pearson and Montreal Trudeau airports, Porter will be able to feed Transat's diversified network to Europe and sun destinations, and vice versa, says Porter CEO Michael Deluce. /p>

    It will create synergies and allow us to compete even more fiercely, he adds.

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    Porter and Air Transat have launched a joint venture to allow them to share codes and combine their flight networks.

    The two carriers tested this collaboration during of a pilot project during the summer of 2022, which proved successful. Loyalty programs will also be matched.

    Our collaboration agreement with Porter aims to enhance and transform the competitive landscape in the country, because together, we represent a strong force to compete more solidly, indicates Transat spokesperson Andréan Gagné.

    < p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">Our objective is to offer an expanded offer to our customers thanks to the complementarity of our two networks, as well as an improved and harmonized experience.

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    But it's still difficult for smaller players to grab a bigger piece of the pie — and it's not for lack of will.

    Mehran Ebrahimi, director of the Aeronautics and Civil Aviation Observatory at UQAM, suspects that not all new low-cost airlines will survive in the long term .

    The others, like Flair and Lynx, have difficulty standing out, says the expert. Air Canada and WestJet have solid backbones and can compete on price, which can deter or weaken a new player. This has happened often.

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    Mehran Ebrahimi, director of the Aeronautics and Civil Aviation Observatory and professor of management at UQAM

    Mr. Ebrahimi therefore expects some consolidation in the airline industry in the coming years, following the example of WestJet, which recently swallowed up Sunwing and closed its low-cost subsidiary Swoop.

    < p class="StyledBodyHtmlParagraph-sc-48221190-4 hnvfyV">He specifies that airlines are constrained not only by demand from travelers, but also by airport capacity, which has not increased much in recent years .

    The pie isn't growing much, so getting a bigger slice will require mergers and acquisitions.

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