Canada’s airlines: Status quo persists despite changes in "arcane" foreign ownership levels

Canada remains one of the more protectionist of the major aviation countries, but recently approved modest changes to foreign ownership limits of Canada's airlines could result in those carriers garnering increased attention from investors outside the country. However, the limited scope of the changes means the impact on potential ownership structures is unlikely to be significant.

Some of Canada's aspiring ULCCs have been exempt from foreign ownership limits for more than a year; however, it does not appear that those airlines have attracted high levels of interest from investors outside the country. Part of the reason is that no single foreign entity can hold more than 25% of voting shares of those airlines.

That restriction now applies to all of Canada's airlines, which could limit the interest foreign investors have in the country's air carriers even as the changes in foreign ownership levels are welcomed by the industry at large. However, the approval process for joint ventures between Canadian airlines and their respective partners is also changing, which could spur additional immunised tie-ups between Air Canada and WestJet and their prospective partners.