Low Cost Airlines

Canada can be a hard country to travel in. Its immensity can be seen just from a map. It is almost 10 million square kilometers in area, with its southern and most populous border being 8,891 km long. Then why is it that it is so expensive to fly from city to city? A simple search using the carrier Westjet with use of Tripadvisor.ca for a week long trip shows that a flight from Vancouver to Toronto is worth $1,600 and a search for a same date flight between Vancouver and London, England will cost $2,000. A cost of $400 is the difference between a domestic flight and an international flight that is almost twice the distance.

Canada has made some improvements to make air travel more affordable, such as creating airport authorities that run the individual airports as opposed to the Canadian Federal Government. This happened in 1993 and helped airports improve safety and infrastructure. According to the Globe and Mail: “By expanding profitable revenue streams through food/beverage, retail, hotels and commercial real estate that have kept in check charges that airports would otherwise pass on to airlines (and their passengers).” The Federal Government now collects rent from these authorities to the tune of $148 million a year. While this system is far better than before 1993, this rent can be used to subsidise smaller or regional air carriers so smaller trips in or between Provinces can be less expensive.

The recent announcement of low-cost airlines in Canada like Jet Naked and Flair will help in this need for cheaper seats. Westjet started as a cheap alternative but with competition coming down to only these two airlines, prices have evened out. These new airlines are looking to cut costs, in the same way Ryanair did when it started out: by cutting the expenditures that come with air travel. As the Financial Post reports: “The company aims to follow in the footsteps of ultra-low cost carriers like Ryanair, Spirit Airlines and Air Asia by unbundling all the services typically built into an airfare, including food, drinks, carry-on and baggage.” By taking away these services or having the passenger pay more to have them creates an inexpensive way for passengers travel. Will these lower cost airlines provide cheaper flights within Canada has yet to be seen but the need for cheaper regional travel is needed.

Air Canada was voted best airline in North America in 2017 and 29^th in the world according to airline customers with Westjet coming in at 58^th. It’s easy to be at the top when you’re the only two competitors within Canada. Would using airport rents and subsidise smaller regional carriers help those who don’t live in or around a major city help? Most definitely. Will these low cost airline help interprovincial air travel? This has yet to be seen.

References:

https://www.theglobeandmail.com/opinion/why-canadas-airport-model-is-working-for-taxpayers/article17368507/

http://business.financialpost.com/transportation/jet-naked-aims-to-bring-ultra-cheap-airline-model-to-canada

http://www.worldairlineawards.com/Awards/world_airline_rating.html