Canada’s Competition Commissioner has launched a predatory pricing investigation of WestJet Airlines Ltd., after receiving a complaint the Calgary-based carrier and its Swoop division are undercutting competitors with below-cost fares in violation of the Competition Act.
The commissioner filed a motion in the Federal Court of Canada outlining its investigation as it sought a court order that a WestJet vice-president be required to appear before the commissioner to explain the airline’s pricing, planning and scheduling and other information relevant to the inquiry.
The competition watchdog launched its inquiry in November after meeting with representatives of Kelowna-based Flair Airlines Ltd. which alleged WestJet and its newly launched Swoop brand were offering seats on some routes at prices designed to force competitors out of the market.
Flair alleged Swoop’s “anti-competitive conduct” made it stop flying its Edmonton-to-Hamilton route, and could force it out of the Canadian market entirely.
“WestJet and Swoop are presently compiling information in answer to the bureau’s inquiry and will not be providing further comment at this time,” WestJet spokeswoman Lauren Stewart said.
The watchdog’s request for a court order complaint was first reported by Ottawa publication Blacklock’s Reporter.
According to the application made by the Department of Justice to Federal Court, Swoop allegedly priced its Edmonton-to-Abbotsford route at as little as $39, which equals 2 cents after taxes, fees and travellers security charges.
Swoop offered one-way fares to Hamilton from Edmonton for $69, including taxes and other fees, for an effective fare of $28.59. Flair said its lowest all-inclusive price for the same route in 2017 was $149. Flair left that route, and Swoop is the only airline flying it at this time, the court document says.
“Based on the commissioner’s inquiry to date, the commissioner has reason to believe that the parties have engaged in conduct that constitutes an abuse of dominant position,” the watchdog said in the court document.
On Tuesday, the Chief Justice of the Federal Court granted the commissioner’s motion and ordered WestJet vice-president John Weatherill to testify at a later date before the competition inquiry. The justice also ordered the airlines to provide all documents requested by the Competition Commissioner.