Canadian Airports Council Response to the Competition Bureau's Airline Market Report
OTTAWA, ON, /CNW/ - Canadian airports are in a period of growth and investment. More of us want to travel by air and our entire air travel ecosystem is growing, innovating and investing to support increased demand. We fully agree that in a country of Canada's size, air travel is not a luxury, but a necessity. The right set of policy recommendations could help unlock more growth and development.
Today's report highlights challenges and provides a timely opportunity to assess the current state of the aviation ecosystem and chart a collaborative path forward. In the view of Canada's airports, the recommendations in the report could be more focused in areas that will actually drive growth and air service for communities. "Cabotage is not the answer to competition in a country as sparse and large as Canada. A foreign carrier is not going to service our smallest towns and thin volume routes," noted Monette Pasher, President of Canadian Airports Council. "We need to package the right policy solution for the specific problem at hand."
Canada's airports have been working with government and industry stakeholders to identify practical, policy-driven solutions to ensure that our country remains competitive, connected and prepared to meet the challenges of a shifting global environment.
Airports compete for air service globally and support a competitive marketplace. Airports of all sizes are investing in innovations and infrastructure to make their operations more predictable, more sustainable, more safe and more efficient. These airports will need to invest $28-billion over the next decade to keep up with growth and support the communities they serve, which depend on air services for economic opportunity, access to healthcare and social connectivity.
Facilitating this growth requires a supportive air policy ecosystem. Airports have put forward a set of policy recommendations for the government to consider this year, including:
Extend airport leases by 50 years so they can unlock growth on airport campuses;
Establish a Regional Air Connectivity Fund to support equitable air access in remote and northern regions;
Support airport infrastructure development through projects of national significance and trade diversification programs; and
Recapitalize the Airport Capital Assistance Program (ACAP) to $150-million annually in order to support regional, rural and northern airports with safety infrastructure.
This report does recognize that Canada's airline sector is more competitive than it has been in a decade. Major airports are seeing increased demand for direct flights and more diverse consumer needs in terms of destinations and services. This will support competition as we develop innovative infrastructure to improve productivity and meet demand.
Canada's airports appreciated the opportunity to engage in this dialogue and feed in to these topics, which are important for the connective tissue of our country. There is a clear focus on strengthening a sector that is vital to our economy, our communities and our global competitiveness.
About the Canadian Airports Council
The Canadian Airports Council (CAC), a division of Airports Council International-North America, is the voice for Canada's airports community. Its 60 members represent more than 100 airports, including all of the privately-operated National Airports System (NAS) airports and many municipal airports across Canada.
Canada's airports support 435,800 jobs, provide $32.9 billion in annual wages, generate $49.6 billion in GDP and produce $123.5 billion of annual economic output.
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25 minutes ago
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'And while I'm chatting to this guy, something in the back of my mind just goes, like, 'James, what the hell are you doing?' ' laughed Stewart. He turned, and completed the climb at a faster-than-planned pace, and got back in the race. A few hours later, Stewart jumped off the tram, scattered some confused tourists and squeaked in just under the 10 p.m. deadline by seconds to start his 19th trip up the Grind — eventually to complete his record-tying 19th ascent of the day. Stewart and Vancouver's Wilfrid Leblanc are the current record-holders of the Multi-Grouse Grind Challenge, the annual event held on the summer solstice — the year's longest day — both having completed 19. Leblanc won it in 2019; Stewart equalled the record last year. The Grouse Grind is a hike legendary for its views from the top and the lung-busting 30 per cent grade that must be conquered to make it there, 2.9 kilometres from top to bottom. The elevation gain is 853 metres. For context: Mount Everest is 8,850 m. 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Global News
43 minutes ago
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Vancouver Sun
an hour ago
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Allow total foreign ownership of domestic-only Canadian airlines: Competition Bureau report
Canada should allow up to 100 per cent foreign ownership of domestic-only airlines in a bid to lower fares and boost flight options, the Competition Bureau says in a new report highlighting the country's 'highly concentrated' aviation industry. In a market study released Thursday, the watchdog suggested a new class of airline that operates only in Canada but has owners outside its borders, opening the gate to global expertise — and cash. The current foreign ownership cap sits at 49 per cent, with sovereignty and national security often cited as the reason. In addition, no more than 25 per cent of a domestic carrier can be owned by any one foreign entity, a proportion the Competition Bureau proposed raising to nearly half. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. 'Allowing more foreign investment in Canadian airlines improves access to capital, drives growth and promotes competition,' the report said, pointing to Australia and New Zealand as places that permit full outsider ownership of in-country carriers. 'As economist Michael Porter famously put it, unless a firm is forced to compete at home, it will usually lose its competitiveness abroad,' Brad Callaghan, an associate deputy commissioner at the Competition Bureau, said during a press briefing. Weak competition in the airline industry remains a big hurdle to lower prices and better service across the country, and remote communities especially, the report found. 'Competition in Canada's airline sector has struggled to take off,' it said, noting consumers' dissatisfaction with ticket prices, service quality and range of flight choice. Air Canada and WestJet together account for between half and three-quarters of all domestic passengers at major airports, according to the study. Though competition improved between 2019 and 2023 with the arrival of Flair Airlines and the expansion of Porter Airlines, market concentration remains 'extremely high' and competition from new entrants fragile, the bureau said. 'Many Canadians report that international flights are often cheaper than flights within Canada' — partly due to 'cabotage' rules prohibiting point-to-point trips within Canada by foreign airlines — it noted. The watchdog proposed working with other countries to remove foreign competition restrictions in international agreements. The National Airlines Council of Canada, which represents the country's largest carriers, took issue with that, as did airports. 'Cabotage is not the answer to competition in a country as sparse and large as Canada. A foreign carrier is not going to service our smallest towns and thin volume routes,' said Monette Pasher, president of the Canadian Airports Council, in a release. Some experts agreed, arguing that opening the hatch to foreign operators would invite more competition on big routes but do little for thinly served remote communities or even small cities. 'Would I fly into Yarmouth? Would I fly into Prince Albert? Would I fly into Whitehorse? No, not a chance. There's not enough traffic there,' said John Gradek, who teaches aviation management at McGill University. 'They want the low-hanging fruit … Ottawa to Montreal, Toronto to Calgary, Edmonton to Vancouver, because that's where all the money is.' Gradek said greater access to the Canadian market should come with conditions, such as a commitment to fly certain regional routes — and reciprocal access to markets in those airlines' home countries. Direct government support akin to a per-passenger subsidy on those far-flung routes is another option, said Gabor Lukacs, president of the Air Passenger Rights advocacy group. Western University professor Geraint Harvey warned about 'dysfunctional outcomes' that could arise from new players, especially state-owned carriers like Qatar Airways and Emirates that enjoy hefty subsidies. 'They can hollow out the market — they can dominate certain routes by offering lower fares,' he said, noting that more competition could ultimately result in less, if domestic airlines are elbowed out of the market. The report recommended a basket of reforms that include reviewing the airport funding model, enhancing the role of smaller airports and shoring up service to remote communities, particularly in the North. Currently, airport infrastructure costs fall largely on travellers under a user-pay model. Extra charges such as airport fees, fuel taxes and security and navigation charges comprised 30 cents of every dollar that passengers paid for tickets in 2023 compared with 25 cents in 2019, the study said. 'They are currently biased against smaller airlines,' said Keldon Bester, executive director of the Canadian Anti-Monopoly Project, stressing that high fees put otherwise cheap flights out of reach for demographics that discount carriers rely on. Air Canada spokesman Peter Fitzpatrick said the trend 'highlights how high government fees and charges raise airfares in Canada, hurting consumers and the competitiveness of our industry.' The country's largest airline has said Canada remains at least as competitive as markets such as the United States and European Union and that the share of domestic passengers on markets served by three or more carriers has shot up over the past decade _ though the number of routes has gone down. Over the past 20 months, four low-cost carriers have disappeared from the skies, as Lynx Air and Canada Jetlines shut down and WestJet folded subsidiary Swoop and the recently acquired Sunwing Airlines into its main-line service. Canada is a noted graveyard for budget carriers. Six foundered here between 1995 and 2015: Greyhound Air, Roots Air, Air Canada's Zip, Jetsgo, Zoom Airlines and CanJet. While the country's biggest cities remain amply served, smaller destinations have fewer options, which can also result in higher prices and, when things go awry, stranded passengers. The Calgary-Saskatoon route saw flights fall 39 per cent to 412 last month compared with 673 in May 2019, now that the route between Alberta and Saskatchewan's two biggest cities is served with non-stop flights by only WestJet, according to aviation data firm Cirium. Air Canada pulled out of the route over two years ago. The report noted that routes served by just one airline tended to be more expensive. 'Our research shows that when just one new competitor flies on a route between two cities, airfares go down by nine per cent on average,' the report said. The report also proposed a working group to ramp up service to the North, where air transportation is an 'essential lifeline, even for residents who never fly' but whose food and medicine arrive by plane. It further called for an end to the transport minister's power to green-light mergers and acquisitions deemed anticompetitive by the Competition Bureau. And it urged industry-wide publication of data on delays and cancellations to help consumers make informed choices, on par with the United States and United Kingdom. Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our daily newsletter, Posted, here .
