A Canadian airline analyst says, theoretically, relaxed rules on airline ownership in this country will lead to more competition and lower prices.
Transport Minister Marc Garneau announced Thursday morning the federal Liberals’ to plan raise foreign ownership limits of airlines from 25 per cent to 49.
Karl Moore from McGill University in Calgary said Friday foreign investors don’t find the current 25 per cent ownership restriction very attractive.
“So to be able to get up to 49 per cent means foreigners can have closer to a controlling voice on the airline, certainly a lot more influence on the board and a way to go forward and make more money from it.”
Moore added if investors do come forward, we’re likely to see more service to smaller centres from new airlines flying smaller planes, but nothing like the super-discount airlines they have in Europe.
“We saw a bit of that with WestJet in its early days, it was more about lower cost,” he said. “It’s still there, it doesn’t have the laydown seats in business class and all, but we might see some lower fares. We certainly see that in Europe and the States, at times, and in Asia, so it might spread to Canada.”
While making his announcement Thursday morning, Garneau also said that the proposed new rules would lead to more competition and cheaper airfares. (kb/newstalk770)