The Competition Bureau of Canada has delivered a report to the Minister of Transport indicating that the proposed arrangement between Air Canada and United Airlines is likely to harm competition on ten key routes between Canada and the United States.

This arrangement would allow the two airlines to expand their coordination on pricing, which is currently restricted by a 2012 consent agreement. The Bureau previously determined that similar coordination would substantially harm competition, leading to the imposition of these restrictions.

The Bureau's analysis reveals that the proposed arrangement would eliminate a crucial source of competition between the airlines on these routes. Currently, Air Canada and United account for all non-stop passenger traffic on five of the ten routes and hold significant market shares on the others. The Bureau estimates that the proposal could lead to higher prices on most affected routes, resulting in millions of dollars in consumer harm annually.

Furthermore, the Bureau concluded that barriers to entry and expansion in the airline market are high, making it unlikely that competition from other airlines would effectively constrain Air Canada and United. This situation could create or reinforce monopoly or near-monopoly conditions on several routes.

Under the Canada Transportation Act, the Competition Bureau is required to report any competition concerns to the Minister of Transport when certain airline agreements are subject to a public interest review. The Minister will consider the Bureau's findings in their review and ultimately decide whether to authorize the proposed arrangement.