Canada’s Competition Watchdog Says the Air Canada–United Deal Would Cost Flyers

Canada’s Competition Bureau has concluded that a proposed route partnership between Air Canada and United Airlines would likely weaken competition on all 10 Canada–U.S. routes it covers and raise fares on eight of them, Reuters reported on October 28. The bureau estimates the cost to passengers at millions of dollars a year.

The two Star Alliance members proposed earlier this month to coordinate prices on routes where they compete today. Those routes are currently restricted by a 2012 consent agreement. The bureau says the carriers account for all nonstop passenger traffic on five of the 10 routes and hold large combined shares on the rest.

The airlines asked for a Canadian government public interest review on October 16, and the bureau’s report will inform it. Air Canada says the partnership supports connectivity and notes it has added 20 Canada–U.S. routes since 2022 and carried more than 4.3 million joint passengers. United did not comment.

The backdrop is a soft market. Reuters notes high fuel costs and weak Canadian leisure demand for US trips, with Canadian return trips from the United States 26 percent below 2024 levels in the first nine months of 2026. The decision now sits with the Canadian government.

Sources: Reuters via MarketScreener, Aviation Week