“A foreign carrier is not going to service our smallest towns.” This statement encapsulates the concerns raised by industry leaders regarding increased foreign ownership of domestic Canadian airlines. The Canadian Airports Council (CAC) believes that permitting up to 100% foreign-ownership should not be considered, arguing that cabotage will fail to address competition issues in Canada’s vast landscape.
Monette Pasher, CAC President, emphasized that foreign carriers would not address the needs of remote towns and thin volume routes, underscoring the unique travel landscape of Canada. Supporting this perspective, an opinion article in The Globe and Mail by Cargojet founder Ajay Virmani highlighted how cabotage could jeopardize Canadian jobs and diminish local control over a vital industry. “The foreign carriers most likely to cash in on this opportunity will be American ones,” he noted, pointing out that the United States does not allow foreign airlines to operate domestic routes, carefully protecting their market.
Impact of Recent Airline Shutdowns
The recent demise of Lynx Air in February 2024, followed by Canada Jetlines in August 2024, has left low-cost carrier Flair Airlines as one of the few remaining contenders in the Canadian market. Flair’s VP of Commercial, Eric Tanner, voiced satisfaction with a recent report reflecting the structural barriers that have been limiting competition in the airline industry, resulting in inflated fares for Canadian travelers.
Tanner cited issues such as “opaque slot allocation, unfair airport fee structures, and exclusive commercial arrangements” as significant barriers preventing new entrants into the market. He called on the government to implement the report’s impactful recommendations promptly, arguing that Canadians deserve a more competitive and affordable air travel environment.
Porter Airlines: Growth Amid Challenges
Porter Airlines, in contrast, continues to expand rapidly, having recently added 44 new aircraft to its fleet since 2023. The airline is also launching new routes across North America, including access to all ten provinces in Canada. Porter’s spokesperson, Brad Cicero, expressed support for several recommendations from the recent study, particularly those enabling international flights at Montreal’s YHU, as well as exploring new aircraft technology at Billy Bishop Airport.
Foreign Ownership Recommendations
Regarding the bureau’s recommendation on foreign ownership, Porter supports raised limits to 49% for a single shareholder. However, Cicero cautioned that any changes allowing foreign airlines to operate domestic routes needs careful consideration. “This could further disadvantage smaller carriers and should not be implemented without reciprocal access for Canadian airlines in other countries,” he stated. The implications of such a decision may favor larger players with more resources and established brand recognition.
As the debate continues, the future of the Canadian aviation industry hangs in the balance. Will regulatory changes foster a more competitive market, or will they inadvertently strengthen larger, established carriers at the expense of smaller airlines? The stakes are high, not just for carriers, but for Canadian travelers who desire more affordable options and improved service in an increasingly challenging environment.
