Air Canada and United may try again for US-Canada anti-trust immunity

Roughly five years after their last attempt, Air Canada and United may reapply for anti-trust immunity for trans-border routes, a move that could allow the two carriers to collude on pricing and schedules while sharing revenues, Air Canada’s president said. “We think together we could be able to get a little bit better share in the marketplace in a more profitable way,” Air Canada’s Ben Smith said. “We’ll look at it.” The carriers received clearance to start an immunized joint venture in 2012, but they never pursued it, because Canada’s regulator asked for too many “carveouts” — or routes that would not be covered. As part of a legal settlement with Canada’s regulator, the two airlines were banned from colluding on 14 of the most highly-traveled cross-border routes, including Montreal to Chicago, Toronto to San Francisco and Calgary to Houston. With so many routes not covered, a joint venture would have been “almost impossible” to implement, Smith said. “I think we were unfortunate that the regulator in Canada had just recently been appointed when we applied and in our view didn’t fully understand what the potential benefits could be,” he said. “We felt like when you looked at what had been approved in the past versus what we were given in the last go around, it didn’t really make sense. I would be surprised if we do make another application if we end up with the same sort of result.” Smith noted that competition on trans-border routes has changed since Air Canada and United’s 2012 application. Air Canada’s main domestic competitor, WestJet, a Delta and American partner, has grown considerably, so routes like Calgary-Houston are no longer United/Air Canada monopolies.<br/>