ABSTRACT
This chapter describes the key elements of Canada's system of airline regulation as it existed in the late 1970s and early 1980s. It discusses the regulatory regime in place in the late 1970s, and explores the forces behind deregulation. The chapter also describes the significant changes in industry structure, and gives data on the early experience with conduct and performance. Although the Conservative government allowed CP Air to provide transcontinental service beginning in 1959, the Cabinet limited it to one flight per day each way between Vancouver and Montreal in order to protect Air Canada's financial position. Under the Aeronautics Act the Air Transport Committee (ATC) of the Canadian Transport Commission was required to determine if the new carrier's services were required by 'present and future public convenience and necessity' (PCN). The chapter shows that during the 1978–1988 period, the average yield per passenger-kilometre increased by 68% in Canada while the increase was only 43% in the US.
