North

Canadian North says it will assist Competition Bureau investigation

Canadian North and First Air have 90 days to hand over information to the Competition Bureau, and the founders of defunct discount air service GoSarvaq are pleased.

Canadian North and First Air have 90 days to hand over documents to bureau

The Competition Bureau filed an application Oct. 20 with the Federal Court to get the information from Canadian North and First Air for its investigation into alleged anti-competitive conduct. (Vincent Robinet/CBC)

The founders of GoSarvaq, a now-defunct discount air service, say they are pleased a federal court has granted an order for two Northern airlines to hand over information to the Competition Bureau.

The bureau filed an application Oct. 20 with the Federal Court to get the information from Canadian North and First Air for its investigation into alleged anti-competitive conduct. The bureau is reviewing the codeshare agreement between First Air and Canadian North, as well as allegations that the airlines have engaged in predatory pricing.

In an affidavit, Max Liu, senior competition law officer with the Competition Bureau, stated there's reason to believe that the Northern airlines "have engaged in conduct that constitutes an abuse of dominant market position."

GoSarvaq had aimed to sell seats on flights between Iqaluit and Ottawa at discount prices, but never got off the ground. In May, GoSarvaq made a public statement blaming dramatic drops in prices by competitors First Air and Canadian North for killing its discount air service. It has filed a complaint with the Competition Bureau.

"We are certainly pleased that the Competition Bureau has made this progress," said Allen Hayward from GoSarvaq.

"We know that the competition bureau has been working on this diligently for a number of months right from the initial complaint from GoSarvaq."

He said he was pleased the bureau was able to advance the investigation during the past few months.

In an affidavit to the court, the Competition Bureau stated it had requested information before from the two Northern airlines but what they received was incomplete.

The two airlines have 90 days to hand over financial documents as well as telephone logs, calendars, and appointment books for the bureau to investigate the allegations.

'We follow widely used airline industry practices'

Canadian North's president Steve Hankirk said in a statement the company will assist the Competition Bureau with its investigation.

Allen Hayward, one of the founders of the now-defunct airline service GoSarvaq, says he's pleased with the progress made in the Competition Bureau's investigation. (CBC)

"We follow widely used airline industry practices that we believe comply with all applicable laws," stated Hankirk.

He added that the airline has been responsive to its Northern customers and has "made significant schedule enhancements over the past year in response to feedback."

"We understand that air service is not a luxury for Northerners; it's a vital lifeline."

The codeshare agreement came into effect in May 2015, after Canadian North and First Air called off merger talks. Codeshare agreements allow for sharing of passengers and cargo on certain routes. 

Hankirk's statement said "this agreement allows us to more efficiently service both cargo and passenger demand and has enabled major schedule improvements."

According to the transcript of a Federal Court hearing held Oct. 26 in Ottawa, the bureau was seeking records spanning an 18-month period starting Jan. 1, 2014.

First Air has not yet responded to a request for comment.

ABOUT THE AUTHOR

Sima Sahar Zerehi is a reporter with CBC North. She started her career in journalism with the ethnic press working for a Canadian-based Farsi language newspaper. Her CBC journey began as a regular commentator with CBC radio's Metro Morning. Since then she's worked with CBC in Montreal, Toronto and now Iqaluit.

with files from John Van Dusen and Kieran Oudshoorn

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