Decision No. 361-P-A-2001

June 29, 2001

June 29, 2001

IN THE MATTER OF a complaint by Dan Motisca concerning the fare offered by Air Canada on the Prince Rupert-Vancouver route.

File No. M4370/A74/00-274

By Decision No. 99-P-A-2001 dated March 7, 2001, the Canadian Transportation Agency (hereinafter the Agency) determined that the $398 V14SNR fare published or offered by Air Canada in respect of its domestic service between Prince Rupert and Vancouver on or about August 10, 2000, was unreasonable. As a result, the Agency advised of its intention to direct Air Canada, pursuant to paragraph 66(1)(b) of the Canada Transportation Act, S.C., 1996, c. 10 (hereinafter the CTA), to amend its tariff by reducing the V14SNR fare offered in respect of its service between Prince Rupert and Vancouver so that the V14SNR fare is comparable to the L-14VALU fares Air Canada offers in respect of its domestic service between Winnipeg and Saskatoon.

Prior to making a direction under paragraph 66(1)(b), subsection 66(5) of the CTA requires the Agency to consider any representations made by the licensee with respect to what is reasonable in the circumstances. The Agency thus provided Air Canada with the opportunity to make such representations, and the carrier filed its written comments on April 9, 2001.

The Agency has carefully reviewed and considered the comments filed by Air Canada. The Agency also recognizes that changes have occurred in the Prince Rupert-Vancouver market since the filing of the complaint by Mr. Motisca on August 10, 2000. In particular, the Agency notes that Air Canada altered its pricing structure in this market by introducing the $305 ECONO round-trip fare in mid-February 2001. The introduction of this ECONO fare restored to historical levels the difference between the lowest fare available in respect of Air Canada's Prince Rupert-Vancouver service and the lowest fare available in respect of its similar, competitive Winnipeg-Saskatoon service. This difference, which had increased significantly in the absence of competition in the Prince Rupert-Vancouver market, is now less than the difference in fare levels which prevailed when competition existed in that market. In addition, on February 27, 2001, Hawkair Aviation Services Limited initiated twice-weekly passenger service between Prince Rupert and Vancouver, offering fares which ranged between $287 and $643, thus introducing limited competition into that market.

As a consequence of these changes, the Agency will not, at this time, direct Air Canada to amend its tariff in the manner set out in Decision No. 99-P-A-2001. However, in accordance with paragraph 66(7)(a) of the CTA, Air Canada is required to keep the Agency informed of all changes or modifications to its existing tariffs in respect of its Prince Rupert-Vancouver service as they occur for a period up to and including July 4, 2002. Furthermore, Air Canada is reminded that, pursuant to subsection 66(6) of the CTA, the Agency may, in the absence of a specific complaint, monitor and review passenger fares offered in respect of certain domestic services and, if necessary, require corrective action.

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