Latest news with #CanadianAirlines
National Post
36 minutes ago
- Business
- National Post
Allow total foreign ownership of domestic-only Canadian airlines: Competition Bureau report
Canada should allow up to 100 per cent foreign ownership of domestic-only airlines in a bid to lower fares and boost flight options, the Competition Bureau says in a new report highlighting the country's 'highly concentrated' aviation industry. Article content In a market study released Thursday, the watchdog suggested a new class of airline that operates only in Canada but has owners outside its borders, opening the gate to global expertise — and cash. Article content Article content Article content The current foreign ownership cap sits at 49 per cent, with sovereignty and national security often cited as the reason. In addition, no more than 25 per cent of a domestic carrier can be owned by any one foreign entity, a proportion the Competition Bureau proposed raising to nearly half. Article content Article content 'Allowing more foreign investment in Canadian airlines improves access to capital, drives growth and promotes competition,' the report said, pointing to Australia and New Zealand as places that permit full outsider ownership of in-country carriers. Article content 'As economist Michael Porter famously put it, unless a firm is forced to compete at home, it will usually lose its competitiveness abroad,' Brad Callaghan, an associate deputy commissioner at the Competition Bureau, said during a press briefing. Article content Weak competition in the airline industry remains a big hurdle to lower prices and better service across the country, and remote communities especially, the report found. Article content Article content 'Competition in Canada's airline sector has struggled to take off,' it said, noting consumers' dissatisfaction with ticket prices, service quality and range of flight choice. Article content Air Canada and WestJet together account for between half and three-quarters of all domestic passengers at major airports, according to the study. Article content Though competition improved between 2019 and 2023 with the arrival of Flair Airlines and the expansion of Porter Airlines, market concentration remains 'extremely high' and competition from new entrants fragile, the bureau said. Article content 'Many Canadians report that international flights are often cheaper than flights within Canada' — partly due to 'cabotage' rules prohibiting point-to-point trips within Canada by foreign airlines — it noted. The watchdog proposed working with other countries to remove foreign competition restrictions in international agreements.
Bloomberg
11 hours ago
- Business
- Bloomberg
Watchdog Urges Canada to Open Airline Sector to More Foreign Capital
Canada should loosen investment rules for airlines to allow full foreign ownership of carriers that fly only within the domestic market, according to the country's competition watchdog. The recommendation is one of several released Thursday by the Competition Bureau following a nearly yearlong study. It also suggests raising the ownership limit for Canadian airlines so that a single foreign investor can own as much as 49%, up from the current 25%, and prioritizing competition in merger reviews.
Yahoo
11 hours ago
- Business
- Yahoo
Watchdog recommends up to 100% foreign airline ownership amid low competition
Canada should allow 100 per cent foreign ownership of domestic-only airlines, the Competition Bureau says in a new report highlighting the country's "highly concentrated" aviation industry. In a market study released Thursday, the watchdog suggested creating a new class of airline that operates only in Canada but could have owners from outside its borders, opening the gate to global expertise — and cash. The current foreign ownership cap sits 49 per cent. In addition, no more than 25 per cent of a carrier can be owned by any one foreign entity, a proportion the Competition Bureau proposed raising to nearly half. "Allowing more foreign investment in Canadian airlines improves access to capital, drives growth and promotes competition," the report said. Low competition in the airline industry remains a big hurdle to lower prices and better service across the country, and remote communities especially, the report found. 'Competition in Canada's airline sector has struggled to take off,' it said, noting consumers' dissatisfaction with fares, flight options and service quality. Air Canada and WestJet together account for between half and three-quarters of all domestic passengers at major airports, according to the study. Though competition improved between 2019 and 2023 with the arrival of Flair Airlines and the expansion of Porter Airlines, market concentration remains 'extremely high' and competition from new entrants fragile, the bureau said, with the field dominated by a few large airlines. 'Many Canadians report that international flights are often cheaper than flights within Canada,' it noted. The report recommended a basket of reforms that include shifting the financial burden of airport maintenance away from passengers, thus lowering ticket prices and allowing more consumers to book flights on budget carriers, as well as expanding market access for new entrants by allowing secondary airports to compete with major hubs. Currently, flight exclusivity clauses often mean only one airport in a local area can host international flights. 'New entrants to the market face aggressive competitive responses,' the study found. The report also called for an end to the transport minister's power to override mergers and acquisitions deemed anticompetitive under a federal review process. It also urged industry-wide publication of data on delays and cancellations to help consumers make informed choices, on par with the United States and United Kingdom. It further stressed the unique challenges faced by remote communities and recommended a working group to ramp up service to the North, where air transportation is an 'essential lifeline, even for residents who never fly' but whose food and medicine arrive by plane. 'New entrants face major barriers because existing carriers control critical assets at the major northern airports,' the report said. It asked the government to "tailor regulations to the northern context" and weed out unnecessary costs. Over the past 20 months, four low-cost carriers have disappeared from the skies, as Lynx Air and Canada Jetlines shut down and WestJet folded subsidiary Swoop and the recently acquired Sunwing Airlines into its main-line service. While the country's biggest cities remain amply served, smaller ones have fewer options, which can also result in higher prices and, when things go awry, stranded passengers. The Calgary-Saskatoon route saw flights fall 39 per cent to 412 last month from 673 in May 2019, now that the airspace between Alberta and Saskatchewan's two biggest cities is served with non-stop flights by WestJet only — Air Canada pulled out over two years ago — according to aviation data firm Cirium. Flight volumes between Ottawa and Fredericton decreased 23 per cent in the same period to 89 trips after Air Canada exited the route, leaving Porter as its sole carrier. Routes served by just one airline tend to be more expensive, the report noted. 'Our research shows that when just one new competitor flies on a route between two cities, airfares go down by nine per cent on average,' the report said. This report by The Canadian Press was first published June 19, 2025. Companies in this story: (TSX: AC) Christopher Reynolds, The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
09-04-2025
- Business
- Yahoo
Air Canada (TSX:AC) Expands International Routes Despite 11% Price Drop Last Week
Air Canada recently opened a new international route between Vancouver and Manila, alongside enhancing its European summer travel offerings, yet the company's share price fell 11% last week. This period coincided with the broader market drop of 12% amid volatility driven by new U.S. tariffs and retaliations from China. The introduction of new flight routes, while positive for the company's long-term connectivity goals, likely couldn't counteract the significant market pressures from the trade tensions. Meanwhile, Air Canada's involvement in the Canadian high-speed rail project marks ongoing diversification efforts, but likely played a minimal role in last week's price movement. You should learn about the 2 risks we've spotted with Air Canada (including 1 which is a bit concerning). Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence. The introduction of new international routes by Air Canada is a step toward enhancing its global connectivity, potentially boosting revenue by attracting more passengers and high-yield customers. However, these positive developments come against the backdrop of last week's 11% share price drop, mirroring broader market volatility. The geopolitical tensions affecting overall market conditions could create obstacles for Air Canada's revenue growth and future earnings projections. Furthermore, while these operational improvements aim to enhance market offerings, geopolitical pressures and competitive forces could pose risks to maintaining net margins. Over the past five years, Air Canada's shareholders experienced a total return decline of 33.97%, highlighting a challenging period for those invested in the company. In comparison, over the past year, Air Canada underperformed both the Canadian market, which returned a decline of 1.6%, and the Canadian Airlines industry, which fell 12%. This longer-term performance underscores the volatility and complexities that have impacted investor confidence. The current share price of CA$14.38 is significantly under the analysts' consensus price target of CA$23.78, presenting a projection that suggests considerable upside potential, should the company's strategic initiatives bear fruit and market conditions stabilize. Nonetheless, achieving these price targets depends heavily on the company's ability to manage geopolitical risks, competitive pressures, and fluctuating operational costs, such as fuel. These factors are crucial in understanding the complexities influencing Air Canada's forecasted revenue and earnings. Review our growth performance report to gain insights into Air Canada's future. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TSX:AC. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Sign in to access your portfolio
