JetBlue Airways (B6, New York JFK) has lodged a request with the US Department of Transportation (DOT), asking that if United Airlines (UA, Chicago O'Hare) and Air Canada (AC, Montréal Trudeau) decide to negotiate a transborder joint venture, that it be subject to public review. The two airlines are currently covered by an anti-trust immunity which means that any deal could potentially be carried out without public scrutiny.
Earlier this year, Air Canada said that it was keen to renew discussions with United Airlines to pursue a partnership. At the time, Air Canada's Vice President of Alliances and Regulatory Affairs, Yves Dufresne, said that they were definitely interested. "The Canada-US bilateral air transport market is still the largest in the world," Dufresne said. "We made an attempt several years ago but there were so many roadblocks."
Proposed changes to Canada's Transportation Act could remove those roadblocks, as it would make the approval process for joint ventures more transparent and predictable. It will also liberalise the foreign ownership of Canadian air carriers.
But jetBlue is concerned that, given Air Canada's immunity status with United, the two airlines could negotiate a deal which is harmful to consumers. They argue that the anti-trust immunity (ATI) that they were awarded is twenty years old, and the aviation landscape has changed considerably since then.
"United and Air Canada should not be allowed to avoid a public, contemporaneous competitive review of their joint venture agreement by relying on a twenty-year old ATI grant and a private non-docketed review of the new agreement, especially when there are crucial competitive considerations that exist today that were not applicable in the 1997 proceeding," jetBlue's filing says.
Between them, United and Air Canada hold approximately 57% of the transborder market, based on seat capacity offered. For its part, US-based jetBlue does not offer any flights north of the border.
