ABSTRACT
Airline strategy plays a vital part in understanding predatory behaviour. To understand airline predation, one might ask Vanguard, Sun Jet International and Western Pacific whether they felt the sting of that bare knuckle competition. Unfortunately, they have all ceased to operate; perhaps brass knuckles weren't required. In Canada, WestJet's entry into new markets from February 1996 up until April 2000 was accompanied by across the board price matching, capacity increases, travel agency commission over-rides, and the doubling and tripling of frequent flyer points on competitive routes by Canadian and Air Canada. The chapter explores predation in the airline industry, with specific references to the Canadian experience. It explores the true origin of predatory behaviour and describes the anti-competitive acts in the industry. Airline predation proves to have many possible causes including: government policy, industry structure, airline strategy, and weak enforcement of competition legislation.
