Ultralow-cost air travel will never flourish in Canada, at least not in the way it does in Europe or the United States. The reason might surprise you.
It’s not due to inflation or fuel prices. It’s not due to pilot salaries, which have risen sharply in recent years. Rather, it has to do with something so mundane it’s almost invisible: infrastructure. It’s all the systems, security and governing bodies that quietly support the country’s aviation industry, which, as it turns out, are uniquely and prohibitively expensive in Canada.
In an article last month, WestJet Group CEO Alexis von Hoensbroech explains this phenomenon in detail. “Canada is one of the most expensive places to operate an airline. Fees, taxes and charges for airports, air traffic control, security and other shared services are among the highest of any country.
“To buy a return trip from Calgary to Toronto on one of our Boeing 737-800s, as an example, your ticket is burdened with $70 in AIF, $28 in landing and terminal fees, $30 in provincial GST/HST, $22 in Nav Canada fee and $14 security fee (this doesn’t even account for other infrastructure fees such as loading, apron usage, de-icing, slot administration and more).”
That’s $160 in infrastructure-related fees alone, double what it would cost to fly an equivalent route in the U.S, according to von Hoensbroech.
This is an insane cost to levy on travellers flying through Toronto’s Pearson Airport, which, according to analytics firm J.D. Power, was the second lousiest mega airport in North America by customer satisfaction last year.
These costs should be lowered by Canadian aviation authorities so they’re in line with American or European standards. The result, in the long run, will be a more competitive aviation industry, more tourism and, of course, lower fares.
The most obvious starting point for cost-cutting is airport improvement fees, the name of which should be enough to anger Canadians since our airports don’t seem to be improving. At 19 Canadian airports, these fees are between 2.5 and 7.5 times the U.S. national average of $6 per passenger.
“Critics say the problem is that Canadian airports aren’t accountable to anyone when they set fees. The airports are just charging what they want to charge,” said John Gradek, who teaches aviation leadership at McGill University.
The service Canadians receive in return for their sky-high airport fees is unacceptable.
Last summer, for example, Pearson made headlines when it topped the list of global airports by number of flights delayed. Remember the chaos? Arriving passengers were trapped on planes because the arrivals hall was full, departing passengers missed flights due to outrageous security times. All this in a year when the Greater Toronto Transport Authority reported cash flows of $235.4 million, and executive and board compensation totalled $10 million.
What makes this problem unique is that it concerns infrastructure, which is, well, boring. It’s not the kind of issue that riles up protesters. Yet its implications are immense. It in part determines who can afford to fly as well as the types of service airlines can profitably offer.
Von Hoensbroech concludes his article by explaining his vision for integrating Swoop — once destined to become Canada’s Ryanair — into WestJet. The approach is remarkably similar to that of legacy carriers such as Air Canada — tiered service, with premium and economy options on every flight.
Canada, then, is moving away from the ultralow-cost model that works so well in Europe and the U.S. It’s a travesty caused by a most unlikely, even invisible actor — the evils of infrastructure.
Jonah Prousky is a management consultant and freelance writer based in London, U.K. His work has appeared in the CBC, Toronto Star and Calgary Herald.