WestJet planes are seen at the Calgary Airport in Calgary. File photo by THE CANADIAN PRESS

Federal Court orders second WestJet employee to testify in competition probe

MONTREAL — The Federal Court of Canada has ordered a second senior employee at WestJet Airlines Ltd. to testify under oath in a predatory pricing investigation into WestJet and its budget subsidiary, Swoop, by Canada’s competition watchdog.

The inquiry, launched by the Competition Bureau in the fall, concerns allegations the two airlines used anti-competitive practices to crowd out B.C.-based upstart Flair Airlines from at least three routes last year.

Federal Court Chief Justice Paul Crampton has ordered WestJet corporate planning manager Michael Claeren to be examined by Canada’s commissioner of competition, citing Claeren’s former role as a “senior leader” of revenue and pricing at Swoop.

He is set to appear next month alongside WestJet vice-president John Weatherill, who the Federal Court previously ordered to come before a presiding officer to explain the airline’s tactics.

The commissioner launched the inquiry “to investigate allegations the parties have abused their dominant position in the provision of air transportation services by engaging in predatory pricing practices on certain routes in Canada,” according to a March 27 affidavit from Xavier Mercier, a senior officer at the Competition Bureau.

Predatory pricing is when a company offers services below break-even costs to hobble a competitor, along with an expectation to recoup losses through future price hikes, according to Competition Bureau guidelines.

In this case the accusation applies to routes between Edmonton and the cities of Abbotsford, B.C., Hamilton, Ont., and Winnipeg. On the Hamilton route, Swoop advertised all-inclusive fares for as low as $69 starting last June, court filings state.

Flair Airlines chief executive Jim Scott has said the strategy cost his ultra-low-cost carrier about $10 million between mid-June and mid-October, placing it in jeopardy.

WestJet has said it is compiling information in response to the probe, which has seen piles of court-ordered documents and data from the two Calgary-based airlines handed over to the Competition Bureau.

Air Canada and WestJet control about 90 per cent of the domestic market and 70 per cent of the transborder market, says David Tyerman, an industry consultant who works with Enerjet, a charter airline aiming to launch as a budget carrier this year.

WestJet’s attempts to retain control over ultra-low-cost flights amount to “a pretty aggressive attempt to protect market share and keep new entrants out of the market,” Tyerman said in an interview.

The business models of Canada’s two largest airlines make ultra-low pricing on certain routes without incurring a loss tough to fathom, he said, pointing to the cost of premium seating and lounges.

“Both Air Canada and WestJet have limited their budget products to certain markets to avoid cannibalizing most of their full-price markets. In addition, it seems unlikely that Swoop and Rouge can achieve truly lowest costs, given labour costs at the incumbents and other potential cost differentials,” Tyerman said in an email.

He also noted the Competition Bureau does not have a mandated time frame for the WestJet investigation and called for prompt enforcement of anti-competitive rules.

Just Posted

Red Deer stamp-collecting event a hit, local club expected to start in fall

Postage stamp-loving Red Deerians can expect to have a place to gather… Continue reading

Red Deer woman one of three arrested by Sundre RCMP

The 19-year-old had numerous arrest warrants out of various jurisdictions

Businessman and volunteer named 2019 Citizen of the Year

John Donald’s parents and sister were each honoured previously

School leader named Red Deer Young Citizen of the Year

Leading by example at Hunting Hills High School

Suspects shot at pursuing police during crime spree

No police officers were injured in May 17 shooting

WATCH: Sunnybrook Farm Museum in Red Deer welcomes spring

Sunnybrook Farm Museum is celebrating spring in Red Deer. On Saturday, the… Continue reading

Cast your votes for the Best of Red Deer

Nominations for the Best of Red Deer Readers’ Choice Awards are officially… Continue reading

Stan Lee’s former manager arrested on elder abuse charges

LOS ANGELES — A former business manager of Stan Lee has been… Continue reading

BCUC sets out process for gas and diesel price inquiry, set to wrap Aug. 30

VANCOUVER — The British Columbia Utilities Commission says it has set out… Continue reading

2 hikers rescued after darkness sets in on trail near Cypress Mountain

North Shore Rescue says it rescued two hikers caught in the darkness… Continue reading

Canada beats Czech Republic to advance to gold-medal game at world championship

BRATISLAVA, Slovakia — Canada’s latest win at the world hockey championship left… Continue reading

Rimouski forward Lafreniere, Prince Albert goaltender Scott earn CHL awards

HALIFAX — Rimouski Oceanic star Alexis Lafreniere has been named the Canadian… Continue reading

10 wounded as gunmen open fire outside New Jersey bar

TRENTON, N.J. — Authorities say at least two gunmen fired into a… Continue reading

Mississippi rep accused of punching wife issues statement

JACKSON, Miss. — A Mississippi lawmaker accused of recently punching his wife… Continue reading

Most Read