The phrase “I wish airfare in Canada was cheaper” or similar phrases, likely profanity-laced, is something many of us have either said or heard at least once in our lifetime.
It’s no secret that flying in this country is expensive. In fact, according to a recent report from the travel agency Kiwi.com, travelling by air in Canada is very expensive.
The Kiwi.com report said that Canadians pay an average $38.71 US to fly 100 kilometres, making Canada the fifth most expensive country out of the 75 countries they surveyed. Only Japan, the Netherlands, Qatar, Finland and the United Arab Emirates were more expensive.
As Canadians it’s safe to say that we are used to limited choice. Much like our telecommunication or banking sector, Canada’s aviation sector is dominated by a few big companies.
Air Canada and WestJet, Canada’s biggest airlines, both dominate the domestic market.
There are other Canadian-based airlines in this country such as Air Transat, Air North and Sunwing, but few would consider any of them to be a major domestic competitor to Air Canada or WestJet.
And that’s a problem.
Air Canada, WestJet and other Canadian airlines have been posting sky high profits lately, all while increasing fees like annoyingly charging for checked bags.
Whether it’s allowing increased competition from foreign and domestic airlines or moving away from the protectionist regulations that have benefited certain Canadian-based air carriers for decades, the federal government needs to make changes not just for the benefit of airports across this country but for consumers.
Canada is one of the few developed countries in the world without any real kind of ultra-low-cost carrier, think Spirit Airlines in the United States. And it’s estimated that about five million Canadians cross into the United States to fly each year, resulting in Canadian airports losing millions of dollars in revenue.
There may be some light at the end of the runway as two Canadian companies, Canadian Jetlines and Enerjet, are hoping to offer low-cost flights within the next couple of years. Yet it is uncertain if they will ever get off the ground due to a lack of Canadian investors as current government regulation restricts foreign ownership of any Canadian-based airline to just 25 per cent.
The federal government also has plenty of regulations in place restricting where, when and how often foreign carriers such as United Airlines or Emirates can fly in Canada. Some of these regulations are done as a way to protect the well-being of Canadian airlines like Air Canada and WestJet and it’s one of the reasons why you don’t see American Airlines operating flights from Vancouver to Calgary or Toronto.
These protectionist rules have not gone unnoticed by foreign airlines, particularly those from the Persian Gulf. Last year, Qatar Airways submitted a lengthy report to Transport Canada that highlighted the benefits of increased competition, stating that more flights means more revenue for the country’s airports and Canadian consumers.
“We also subscribe to the view that one or two airlines cannot possibly connect Canadians to the world in a convenient way and still provide competitive fares to consumers,” the report said.
While some foreign airlines do have the privilege to fly their home country and make multiple stops within Canada, they typically can’t sell tickets from one Canadian destination to another destination in Canada.
If our government can’t be bothered to encourage start up low-cost Canadian airlines, then the least they could do is allow established airlines that already operate within Canada the opportunity to provide consumers with the kind of choice that has been lacking here for years.
I’m personally fine with the idea of flying from Vancouver on a foreign airline, say Cathay Pacific, to another major destination within Canada. So bring on the foreign competition and let the air fare fall where it may.