The Competition Tribunal issued on July 22, 2003, its decision on the phase one of the abuse of dominance case brought by the Commissioner of Competition against Air Canada. The commissioner alleged that in 2000 and 2001, Air Canada responded to the entry of discount carriers CanJet Airlines and WestJet into Atlantic Canada by adding capacity and reducing fares on its competing flights such that it was operating these flights below its “avoidable costs”. The commissioner alleged that in so doing, Air Canada committed anti-competitive acts and thereby abused its position as the dominant domestic airline in Canada. Air Canada denied the allegations. WestJet intervened in the case in support of the commissioner.
At the request of the commissioner and Air Canada, the Tribunal agreed to hear the case in two phases: (1) to determine whether Air Canada operated below its avoidable costs on specific routes, and to develop principles for assessing avoidable cost issues; and (2) to determine the competitive effects of Air Canada’s actions. In its phase one decision, the Tribunal concluded that Air Canada did operate below its avoidable costs during the relevant time period, and in so doing engaged in anti-competitive acts within the meaning of s. 79 of the Competition Act. Issues still to be determined in phase two include whether Air Canada’s actions were part of a practice of anti-competitive acts, and whether they resulted in a substantial lessening or prevention of competition.
In light of the Companies’ Creditors Arrangement Act order issued in regard to Air Canada on April 1, the Tribunal stayed its phase one decision for the duration of that order.
The Commissioner of Competition was represented by Donald Houston and Jeanne Pratt of Fraser Milner Casgrain LLP (formerly with Kelly Affleck Greene); by Michael Osborne of Affleck Greene Orr LLP; and by Jim Marshall of the Federal Department of Justice. Air Canada was represented by Katherine Kay, Eliot Kolers and Danielle Royal of Stikeman Elliott LLP; supported in-house by John Baker, senior vice-president and general counsel. WestJet was represented by Daniel McDonald, Q.C., and Alicia Quesnel of Burnet, Duckworth & Palmer LLP.
At the request of the commissioner and Air Canada, the Tribunal agreed to hear the case in two phases: (1) to determine whether Air Canada operated below its avoidable costs on specific routes, and to develop principles for assessing avoidable cost issues; and (2) to determine the competitive effects of Air Canada’s actions. In its phase one decision, the Tribunal concluded that Air Canada did operate below its avoidable costs during the relevant time period, and in so doing engaged in anti-competitive acts within the meaning of s. 79 of the Competition Act. Issues still to be determined in phase two include whether Air Canada’s actions were part of a practice of anti-competitive acts, and whether they resulted in a substantial lessening or prevention of competition.
In light of the Companies’ Creditors Arrangement Act order issued in regard to Air Canada on April 1, the Tribunal stayed its phase one decision for the duration of that order.
The Commissioner of Competition was represented by Donald Houston and Jeanne Pratt of Fraser Milner Casgrain LLP (formerly with Kelly Affleck Greene); by Michael Osborne of Affleck Greene Orr LLP; and by Jim Marshall of the Federal Department of Justice. Air Canada was represented by Katherine Kay, Eliot Kolers and Danielle Royal of Stikeman Elliott LLP; supported in-house by John Baker, senior vice-president and general counsel. WestJet was represented by Daniel McDonald, Q.C., and Alicia Quesnel of Burnet, Duckworth & Palmer LLP.
Lawyer(s)
Peter G. Gilchrist
Eliot N. Kolers
Danielle Royal
Jeanne L. Pratt
Alicia K. Quesnel
W. Michael G. Osborne
Simon A. Romano
Katherine L. Kay
Daniel J. McDonald