Privatization? Foreign investment? Canadian airports face an overhaul of their business model
CBC
When WestJet's CEO openly criticized the federal government recently for hiking air travel fees, it wasn't that unusual. Airline and airport executives have long grumbled about all the fees charged to passengers when they buy a ticket.
It's no secret that air travel in Canada is expensive compared to the rest of the world. Airports are a big piece of that.
Beyond lamenting those costs, though, Alexis von Hoensbroech went further by calling for a broad range of changes to how Canadian airports are funded and operated. His demands, if successful, could ultimately lead to a revamp of air travel in the country and open the doors to partial or full private ownership of airports.
Still, experts caution, the eventual impact on airfares may be minimal.
The desire for cheaper tickets is what's motivating von Hoensbroech, who pointed to the recent demise of WestJet's discount brand Swoop. The executive said fees and taxes make it too difficult to offer bargain prices.
Currently, all the mandatory costs for an average one-way domestic ticket are $88, the airline said, up from $76 in 2019. The fees include taxes, security charges, airport fees and so on.
WestJet is calling for the federal government to freeze the fees, permanently stop collecting rent from airports across the country, and — most importantly — conduct a full review of how airports are funded and operate.
There are many different models for how airports operate and it's worth considering what could work in Canada, said von Hoensbroech.
"We are just asking for a study and not proposing what the actual changes should look like because there will be many different ways of fixing this," he said to journalists in Calgary last week.
The demands come at a time when the federal government is willing to listen.
"We'll continue to work with our partners to attract more investments in Canadian airports, so that millions of passengers can continue to pass through their doors every year," said Laurent de Casanove, press secretary to Transport Minister Pablo Rodriguez.
"Canadians work hard and save up to travel. They expect to leave on time, and they expect good service from airlines. This should be their top priority," she said.
In the recent federal budget, the government outlined how it wants to explore allowing private investment into Canadian airports. The investment could possibly come from pension funds or other groups, such as sovereign wealth funds.
"What has to happen, in my opinion, is a whole new governance structure for airports," said John Gradek, an industry analyst and co-ordinator of the aviation management program at McGill University.
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