Competition Bureau Warns Air Canada-United Expansion Could Raise Fares

GATINEAU, Canada — Canada’s Competition Bureau has warned that expanded cooperation between Air Canada (AC) and United Airlines (UA) would likely reduce competition on 10 cross-border routes and raise fares on most of them.

In its October 28 announcement, the Bureau said closer coordination, including on pricing, would eliminate an important source of competition and cause millions of dollars in annual consumer harm. The proposal remains subject to a federal public interest review.

The airlines already cooperate through their Transborder Joint Business Arrangement. However, restrictions under a 2012 consent agreement still require independent commercial decisions on the 10 routes, including pricing. The Bureau said barriers to entry and expansion would make it unlikely that other airlines could constrain the partners, creating or reinforcing monopoly or near-monopoly conditions on several routes.

“Our review found that allowing Air Canada and United to coordinate on these routes would likely reduce competition,” said Jeanne Pratt, interim commissioner of competition.

The 10 Affected Routes

The Bureau’s report to the transport minister, dated October 16, identifies these city-pair markets:

• Toronto (YTZ or YYZ)–Denver
• Toronto–Houston
• Toronto–San Francisco
• Toronto–Cleveland
• Toronto–Washington
• Montréal (YUL)–Chicago
• Montréal–Washington
• Ottawa (YOW)–New York
• Ottawa–Washington
• Vancouver (YVR)–San Francisco

These are city markets, which can include multiple airports. Based on 2025 nonstop passenger traffic, the carriers together accounted for all traffic on five of the routes. The report predicts materially higher prices on eight of the 10 routes.

Approval by the minister would not itself remove the consent agreement. According to the report, the airlines intend to seek its rescission from the Competition Tribunal if the minister authorizes the proposal. Successful rescission would allow the additional coordination.

Airlines Defend Connectivity Benefits

Air Canada defended the partnership in a statement reported by *Skies Magazine* on October 29, saying it brings approximately two million passengers connecting to or from the United States onto its domestic network annually, benefiting more than 50 Canadian communities.

The airline said 20 new cross-border routes had been added since the partnership began in 2022, and more than 4.3 million passengers had traveled on itineraries combining the two carriers’ flights.

In its October 16 announcement with United, Air Canada also argued that coordinated schedules offer more departure choices, better connections and greater flexibility during disruptions. The carriers announced new services for summer 2027, as detailed in Airways’ coverage of their six planned transborder routes.

Public Interest Review

Transport Canada’s assessment examines the proposal’s economic and competition effects. Transport Minister Steven MacKinnon can authorize the arrangement, impose conditions or refuse it, weighing the Bureau’s findings alongside other public interest considerations.

The government is accepting public comments through November 15, 2026. All Canadians can participate; the consultation specifically seeks views from travelers, aviation industry representatives, consumer and tourism groups, and Indigenous participants.