Joshua Thomson
Joshua is CANZUK International's Senior Associate
for Eastern Canada in Saint John, New Brunswick.
CANZUK International welcomes the publication of the Canadian Competition Bureau’s market study report for increasing cost competitiveness in Canada’s airline industry.
It is well known that Canadian air travelers pay some of the highest airfares in the world. Canada’s airline industry imposes a layered fee structure that often makes travel significantly more expensive. Government-mandated charges – such as airport improvement fees, security fees, navigation fees, landing fees, fuel taxes, and airport rents – frequently account for 25–35 % of the total ticket cost for domestic flights. In practical terms, this means Canadians regularly pay upwards of C$75 per flight before the airline even adds its base fare.
Today, the Competition Bureau of Canada released its latest report, “Cleared for take-off: Elevating airline competition“, which provides policy recommendations to improve competition in Canada’s aviation industry and reduce fares for consumers.
As part of the report, the Bureau has recommended a key policy proposal supported by CANZUK International, concerning cabotage rights within aviation airspace.
Cabotage rights are the rights of airlines to operate within the domestic borders of another country, particularly to carry passengers and cargo from one point in the other country directly to another point in the same country. At this time, the Government of Canada places significant restrictions on foreign airlines undertaking cabotage rights, which stifles competition in Canada and leads to higher ticket prices for consumers.
“Canada’s aviation sector is constrained by foreign ownership limits and restrictions on foreign carriers operating domestic routes in Canada (known as cabotage),” the report states. “Ultimately, this affects the flying public through fewer choices and higher prices. Other countries have adopted looser regulations.”
As such, the report has recommended that the federal government should, “Work with other countries to remove foreign competition restrictions in international agreements” and should:
“Allow airlines from partner countries to fly domestic service within Canada. This practice is known as cabotage. These changes will mean Canada can benefit more from capital and industry knowledge from other countries.”
Undoubtedly, it makes complete sense for Canada to consider “partner countries” as the United Kingdom, Australia, and New Zealand, given their exemplary records in aviation safety, security, and commitment to competition.
As such, Canada could consider affording CANZUK airlines, such as Air New Zealand, British Airways, and Qantas, the right to operate within domestic Canadian airspace, thereby providing greater route access for Canadian passengers, increasing competition, and reducing airfares. The same cabotage rights could also be extended to Canadian airlines, such as Air Canada and WestJet, throughout Australia, New Zealand and the United Kingdom.
CANZUK International will continue to work with relevant government ministries in Canada, and Transport Canada, to advocate for increased cabotage rights for CANZUK airlines, and support the recommendations of the Competition Bureau.
As part of the report, the Bureau has recommended a key policy proposal supported by CANZUK International, concerning cabotage rights within aviation airspace.
Cabotage rights are the rights of airlines to operate within the domestic borders of another country, particularly to carry passengers and cargo from one point in the other country directly to another point in the same country. At this time, the Government of Canada places significant restrictions on foreign airlines undertaking cabotage rights, which stifles competition in Canada and leads to higher ticket prices for consumers.
“Canada’s aviation sector is constrained by foreign ownership limits and restrictions on foreign carriers operating domestic routes in Canada (known as cabotage),” the report states. “Ultimately, this affects the flying public through fewer choices and higher prices. Other countries have adopted looser regulations.”
As such, the report has recommended that the federal government should, “Work with other countries to remove foreign competition restrictions in international agreements” and should:
“Allow airlines from partner countries to fly domestic service within Canada. This practice is known as cabotage. These changes will mean Canada can benefit more from capital and industry knowledge from other countries.”
Undoubtedly, it makes complete sense for Canada to consider “partner countries” as the United Kingdom, Australia, and New Zealand, given their exemplary records in aviation safety, security, and commitment to competition.
As such, Canada could consider affording CANZUK airlines, such as Air New Zealand, British Airways, and Qantas, the right to operate within domestic Canadian airspace, thereby providing greater route access for Canadian passengers, increasing competition, and reducing airfares. The same cabotage rights could also be extended to Canadian airlines, such as Air Canada and WestJet, throughout Australia, New Zealand and the United Kingdom.
CANZUK International will continue to work with relevant government ministries in Canada, and Transport Canada, to advocate for increased cabotage rights for CANZUK airlines, and support the recommendations of the Competition Bureau.
Heading photo: Wikimedia under Creative Commons Attribution-Share Alike 4.0 International license
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