CanJet Complaint Against Air Cananda

On October 12, 2000, under a new power given to the Commissioner of Competition following the acquisition by Air Canada of Canadian Airlines, the Commissioner issued a Temporary Order requiring that Air Canada cease and desist from offering specific discount fares on certain eastern Canada routes. The Order follows allegations by CanJet that when it entered the market on September 5, 2000, Air Canada reduced its fares to target CanJet on specific routes. On October 31, the Order was extended until November 30, 2000 on three of the five routes, and was subsequently further extended by the Competition Tribunal until December 31, 2000.

This marks the first time the Commissioner has ever exercised this extraordinary power, which allows him to restrain a competitive response during a period of time of up to 80 days if he is of the opinion that there “could” be “anti-competitive conduct” and that a competitor is likely to be eliminated or suffer other harm than cannot be remedied by the Competition Tribunal, all without hearing representations or evidence from the affected parties.

Air Canada commenced an application to the Competition Tribunal on November 1, 2000, requesting that the Tribunal set aside the Temporary Order, or alternatively vary its duration and some of the language in the Order.

Stikeman Elliott represents Air Canada, with a team comprised of Katherine L. Kay, Eliot N. Kolers, Jason L. Gudofsky and Adam L. Kalbfleisch from Stikemans’ Toronto office, and Lawson A.W. Hunter, Q.C. and Mirko Bibic from Stikeman’s Ottawa office. The Stikeman team also worked with John M. Baker, the Senior Vice-President and General Counsel of Air Canada. Representing CanJet are Neil Finkelstein, Brian Radnoff and Mark Katz of Davies Ward Phillips & Vineberg LLP (previously Davies Ward & Beck LLP).