Canada: CCB provides report on concerns in proposed northern airlines merger

The Canadian Competition Bureau (CCB) announced Tuesday, February 26, that following a thorough review, it has determined that the proposed merger of First Air and Canadian North is likely to result in a substantial lessening of competition in the provision of passenger travel and cargo services.

The effects of the transaction are likely to include reductions in passenger and cargo capacity, increases in price, and reductions in flight schedules.

Many communities in northern Canada rely on air services due to the large geographic areas and limited road infrastructure in certain areas. These services play an important role in economic development, interconnectedness among communities, and the supply of food, healthcare, and other goods and services. Many communities served by First Air and Canadian North are accessible only by air for much of the year.

The CCB’s review focused on services offered by both airlines to communities in Nunavut and the Northwest Territories. In most of the affected areas, the proposed transaction represents a merger-to-monopoly.