Vancouver Province - September 24, 1997
By Colin Kenny
It is one thing for Canadian consumers to lose cut-rate airlines like Greyhound and Vista, both of which have left our skies in recent weeks. It would be another if Air Canada were to force their only serious domestic competitor, Canadian Airlines, to the ground.
It is no secret that Canadian is a troubled operation, teetering on the brink. Its endangered employees have long suspected that rival Air Canada's business plan is centered around forcing Canadian into bankruptcy. The furious lobbying that Air Canada is currently engaged in on Parliament Hill should only heighten these fears.
Air Canada has submitted a request to Transport Canada to increase the number of flights it is permitted to make into the lucrative Hong Kong market from four flights a week to as many as the market will bear. Canadian currently operates 19 flights a week (from Toronto, Montreal, Ottawa and Vancouver) to Hong Kong.
Traditionally, the federal government has divided up markets so both airlines could make a go of it, to the advantage of the employees, suppliers and customers of both airlines. Asia was originally Canadian's turf, although Air Canada has demanded, and been granted, a nominal part of the action.
Asia has long been Canadian's last best chance at remaining solvent. Canadian's international routes, largely concentrated in the Asia-Pacific rim, play a critical role in supplementing the airline's domestic traffic and keeping it financially viable. Air Canada clearly wants the federal government to give it the chance to cut off Canadian's blood supply.
It can be argued that this is just good old classical liberal economics - dogs eat dogs, after all, and that's just the way the marketplace works. But leaving a smallish country of 30 million people with just one domestic airline gets down to the territory in which capitalism begins to get counter-productive: when monopolies take hold.
The non-interference zealots will argue that there will always be plenty of competition from airlines based outside Canada, and to some degree that is true. But if that argument is carried to its logical conclusion, Air Canada will eventually get thrown to the wolves as well, and Canadians will be left with no national airlines.
Canadian consumers are well-served by two national airlines. As long as Canadian has the resources and the grit to keep on giving Air Canada a decent level of competition, it should be encouraged to do so.
Canada has never had the kind of tough, anti-trust legislation that has served the United States so well. Our Competition Act is all but toothless. That means the federal government has always had keep an eye on key sectors where competition hasn't always been as vigorous as it should be.
The air passenger sector is a case in point. Letting Air Canada bully its way into unlimited servicing of Hong Kong would constitute a black mark on the record of this government. Your MP and the federal cabinet should be reminded of that.