Evidence of meeting #45 for International Trade in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was access.
A recording is available from Parliament.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
Yes, but not everybody lives in the Okanagan.
Mr. Vanstone, you made a couple of really interesting comments about further liberalization and some of the potential downsides. In particular, you cited the medium-term Australian experience as being negative in that regard. I was really fascinated by that.
Could you expand on that a bit?
Vice President, Corporate Strategy, Industry and Government Affairs, Air Canada
Sure. I'm happy to try to do that briefly.
If you look at Australia, it did an experiment in the early 2000s. They tried a sort of one-size-fits-all open skies. In the short term, it was very good for Australian consumers. You saw a lot more airlines flying in, especially from the Gulf, but also from Asian countries. Now that we're getting into the medium and long term, the choice available to Australian consumers in terms of direct flights has disappeared. The number of direct flights between Europe and Australia has gone from many flights to two, I believe. If you want to get between Australia and Europe, the only way to do that now is through Dubai, which as a sovereign country is a bit of a concern. As a consumer, obviously that affects pricing and demand as well.
I think we now have a very good example with Australia of the impact of unmitigated open skies for a country like Canada.
Liberal
Chrystia Freeland Liberal Toronto Centre, ON
Okay. Then all I'll say is thank you very much to all three of you.
Conservative
Nina Grewal Conservative Fleetwood—Port Kells, BC
Thank you very much, gentlemen, for coming to speak with us today.
As you know, our government is committed to developing our air traffic agreements with other nations to have a positive impact on our businesses as well as our citizens. With the growth of the aviation industry in the global market, it is very important to allow for open skies agreements, to provide easy access and cooperative growth between nations. Hearing from our airlines today allows for cooperation between industry and government to position Canada for a bright future for many years to come.
Mr. Vanstone, Air Canada is a founding member of the Star Alliance. That alliance began in 1997 with five members and has grown into a global alliance consisting of almost 27 major airlines. Star Alliance's mission is to “contribute to the long-term profitability of its members beyond their individual capabilities”. How does the mission of this alliance affect competition between these airlines, specifically Air Canada?
February 16th, 2015 / 5:15 p.m.
Vice President, Corporate Strategy, Industry and Government Affairs, Air Canada
I think the first is that the Star Alliance is not a joint venture. We don't have anti-trust immunity and we don't deal within the Star Alliance with things such as marketing, timing of flights, pricing of flights, and things of that nature.
As for what it is, we work together on measures such as pooling our maintenance costs, pooling our spare parts, and allowing each other access to information that is not commercially sensitive but is information of the trade type of dealings. As well, we try to work together to ensure that we have interline agreements and that we extend the reach of our own fleet by using code shares where appropriate and interline where it's less so.
This is all in favour of trying to enhance the experience for the customer and making sure that if you are in Vancouver today, you can get anywhere in the world via Air Canada and our Star Alliance partners. That's really our goal. It's not about commercial cooperation in any sort of anti-trust way.
Conservative
Nina Grewal Conservative Fleetwood—Port Kells, BC
Mr. Waugh, the federal government recently eased the passenger flow in airports by increasing the number of NEXUS kiosks and trusted traveller lines. How has this helped international travellers across Canada?
David Waugh Director, International Regulatory Affairs and Facilitation, Air Canada
Thank you for the question.
The improvements in NEXUS lanes in both the CBSA environment, or the customs environment, as well as in the CATSA environment, or the pre-board screening, are a very important tool for us to have in our airports in order for us to improve the customer experience and provide some predictability in terms of processing times. At the end of the day, those two items allow us to connect passengers on a more timely basis and make our product offering via Canadian airports more attractive versus that of other competitors.
Conservative
Nina Grewal Conservative Fleetwood—Port Kells, BC
Mr. Williams, how have air traffic agreements impacted Sunwing Airlines, as a leisure airline, differently from other commercial airlines?
President, Sunwing Airlines
Again, our focus is in the south and the Caribbean, but we've had improved access in Cuba and Mexico, the two biggest markets where we've had improvements in access that have allowed us to grow. Without that, our business would continue to grow, but not to the same extent. Obviously, having the open bilateral agreements and open access to the various airports in those countries clearly has helped facilitate the growth of our business.
Conservative
Conservative
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Thank you very much.
Thanks to the witnesses for being here.
Mr. Williams, I know that you have a service going out of Fredericton that goes to Varadero. I think it's a once-a-week service. Just on an example like that, I appreciate the fact it's a family-owned company and that Canadians are travelling with it. What do you see as some of the challenges for an airport like Fredericton, for example, as opposed to a larger airport, in providing that service? Fredericton has the customs clearance there, obviously, with CBSA, but for an airport like Fredericton that has customs clearance, what are some of the challenges that some of these smaller airports face that a larger one wouldn't?
President, Sunwing Airlines
Thank you very much. That's also a good question.
There are two main things we look at and need when we go into small airports. One of them is customs. We can work without it, but doing so is clearly more challenging. The other thing is ground handlers at the airports. Clearly, if we have one flight a week, this is an issue. It's not financially viable for us to have our own ground handling companies doing that work there—it's a matter of having not just the staff, but also all the equipment—so we need to have access to ground handling companies at airports that are able to provide that service to a variety of airline customers.
We had this issue in Fredericton, which actually caused us to pull out of that market for this winter. We were unable to get ground handling services.
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
That has infringed a little on your ability to provide service this year. I see there is still some weekly schedule going out, but would that be something that would prevent you from expanding that service?
Conservative
Mike Allen Conservative Tobique—Mactaquac, NB
Okay, that's helpful.
Mr. Vanstone, we heard earlier from witnesses in the first panel that with regard to cargo, while there may not be a lot of tonnage, there is great value. For example, we saw the lobster shipments that were going out of Halifax at Christmastime.
From a cargo perspective, how have some of the ATAs helped Air Canada?
Vice President, Corporate Strategy, Industry and Government Affairs, Air Canada
Absolutely, cargo in the belly of the plane is a significant business for us. It's said that every year we carry more lobsters than we do passengers. I don't know that we've ever actually counted the lobsters, but it's a good thing to say.
It's a very significant business for us, and just as for passengers, we need those agreements in order to be able to fly that cargo into an international company, or code share our cargo, or interline it on other airlines. All of that is absolutely critical for us.
The chief air negotiator in Transport Canada has been very helpful to us in helping to facilitate those cargo shipments, and they continue to be a very healthy part of our business.
Conservative
The Chair Conservative Randy Hoback
Witnesses, I'd like to thank you for being here today and sharing your information with us.
We're going to clear the room and go in camera for five minutes to do some committee business, so you are dismissed.
[Proceedings continue in camera]