Canada is losing flight routes. This has serious consequences

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Monette Pasher is president of the Canadian Airports Council.

The Competition Bureau is studying the state of competition in Canada’s airline industry, and it’s welcome.

There’s a related but separate issue that’s equally important and still needs to be addressed: Away from our biggest cities, too many Canadians are without frequent, reliable and affordable air service. Connectivity – the frequency of flights – is an underappreciated part of Canada’s aviation puzzle.

That’s because Canada’s biggest airports – Toronto, Montreal, Vancouver, Calgary – have seen large increases in passenger volume coming out of the pandemic, which masked a fall in the number of flights over the same period. This is a global trend as airlines focus on their most profitable routes and use larger planes to accommodate more passengers with fewer flights.

The trend is similar across Canada’s eight largest airports. For example, at Montreal’s Trudeau, passenger volume is up 12 per cent compared with 2019, but the number of flights has fallen 11 per cent. Connectivity is even worse at the smaller airports that don’t act as hubs or directly facilitate leisure travel abroad. For example, Alberta’s Fort McMurray used to have 17 flights a day; it now has seven.

Ultralow-cost carriers, which have long filled the connectivity gap in densely populated markets such as Europe, face new struggles in North America and Australia. Flair Airlines is still serving markets such as Kitchener-Waterloo and Abbotsford, B.C., but U.S. budget airlines like Spirit, Frontier and Southwest are adjusting their business models to cope with a changing competitive landscape and higher fuel and labour costs.

“They’re … waving the white flag and saying the ultralow-cost, low-fare but high-fee business model is not working right now,” Kyle Potter, executive editor of Thrifty Traveler, told the Washington Post.

Airlines haven’t abandoned Canada’s regional markets completely, but with an acute shortage of qualified pilots (especially at the regional level) and short-haul business demand lagging behind leisure and “bleisure” travel, carriers have substantially reduced the frequency of regional service.

Many small airports have only recovered to 50 to 70 per cent of 2019 flight frequency volumes. Passengers travelling from, say, Nanaimo, B.C., through Vancouver, or London, Ont., through Toronto have fewer options and longer waits.

Here’s the solution: Even though low-cost Lynx has departed and, this week, Canada Jetlines announced it was grounding all flights after failing to secure operating capital, the capacity for domestic competition is still there with Air Canada AC-T, WestJet, Flair and Porter Airlines. A constellation of regional carriers could yet step up. With the right partners, incentives and conditions, these airlines could restore or augment service to underserved markets.

To foster healthy competition, Canada’s aviation industry and government should be working to channel this capacity into the market, drive down ticket prices and build a new national aviation strategy that has the right policy framework to support connectivity.

Porter might prove the missing link for some communities. It has grown from a regional carrier based at Billy Bishop Toronto City Airport to a significant national player, with 7 per cent of all scheduled seat capacity. That may not sound like much compared with Air Canada (41 per cent) and WestJet (22 per cent), but it’s more competitive than any third carrier has been in many years. Porter plans to expand its fleet to 80 planes by next year and aims to reach 100 by 2027.

The problem is more acute for passengers in remote Northern communities, where air service is not just a luxury but a lifeline for basic supplies, medical care and economic dynamism. There was a positive development recently when WestJet and Air North struck an interline agreement, which allows the two carriers to sell each others tickets to offer seamless travel connections. However, there are still capacity shortages because of a pivot during the pandemic by small regional carriers from scheduled passenger service to charter work.

In communities where service is essential but cost-prohibitive, Ottawa might consider establishing a funding mechanism that borrows from best practices in other countries. The U.S. government, for instance, views air travel as an essential service and invests in it with the Small Community Air Service Development Program. It also provides US$368-million a year in support for air services in small communities through its Essential Air Service program.

There is a lot of seat capacity; the question we should be asking ourselves is: “Is seat capacity deployed where it is needed most for Canadians, and what is the role of government?” Air travel is not a luxury in this country, it is an essential service and communities need to be connected by air to participate in today’s global economy.

In other words, this is an all-hands-on-deck moment to address the state of airline competition in this country. Why hasn’t connectivity been restored? Where is it most critical? Can the big airlines and regional carriers be induced to work in concert? And how can service be aligned with growth?

No matter where they live, Canadians need reliable, affordable air service. They can’t take flight without it.