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Canada should allow increased airline foreign ownership -study

Published 2016-02-25, 04:23 p/m
© Reuters. Canada should allow increased airline foreign ownership -study
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OTTAWA, Feb 25 (Reuters) - Ottawa should raise current
foreign-ownership limits on airlines to boost competition and
encourage new entrants into the market, a study for the Canadian
government recommended on Thursday.
The review, which sought to identify priorities for
modernizing Canadian transportation laws, recommended the
government increase foreign ownership limits to at least 49
percent from 25 percent for air carriers providing commercial
passenger services.
"Our goal is to see Canada join most other large aviation
markets in allowing significant (but not full) foreign ownership
of passenger air carriers," the report said.
"These changes should contribute to narrowing the gap
between Canada and other markets in terms of our relatively low
level of competition and our relatively high airfares."
For airlines operating all-freight and specialty air
services, foreign ownership limits should be increased to 100
percent, the study said.
The government should also level the playing field for new
entrants and growing carriers by ensuring that regulations for
granting licenses and air operator certificates are consistent,
the report said.
Shares of Air Canada AC.TO closed up 1.5 percent at
C$7.26, while those of WestJet WJA.TO ended down 0.7 percent
at C$16.19.

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