REFILE-Air Canada, United Continental settle with anti-trust watchdog

Wed Oct 24, 2012 11:22am EDT

Oct 24 (Reuters) - Canada's competition watchdog dropped objections to the proposed merger of flight operations by Air Canada and United Continental Holdings on routes between Canada and the United States, but barred them from coordinating on prices or on the number of seats available on 14 high-demand routes.

The planned joint venture between the two airlines was put on hold last year after the Competition Bureau of Canada filed an application to have the deal scrapped on antitrust grounds.

The bureau had identified 19 transborder routes, where competition would be substantially reduced by the joint venture.

The airlines have agreed not to implement their joint venture or to coordinate via existing "coordination agreements" on 14 routes between Canada and the United States.

On these routes, the airlines cannot share commercially sensitive information or pool revenue or costs.

"The consent agreement the Bureau reached with Air Canada and United Continental will ensure that passengers do not face higher prices and less choice on high-demand routes between Canada and the U.S.," John Pecman, Interim Commissioner of Competition, said in a statement.