Transport Committee on June 11th, 2024

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Kendall.

Mr. Benedict, I'll give you the last word on the same question.

[Sébastien Benedict]

Thank you.

There are so many beautiful places to visit in Quebec's remote regions, but people don't want to waste their vacation time driving 14 hours to visit tourist destinations. Consequently, from the tourism industry's point of view, affordable and reliable air access has to be available if we want people to visit our northern and remote regions.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Badawey.

Mr. Strahl, the floor is yours. You have five minutes, please.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

Thank you very much, Mr. Chair.

My question is regarding the passenger protection regulations, the APPR. I'll probably go back to Mr. Wright for this.

Often rural and remote airports may have less technical capacity in terms of being able to allow planes to land in inclement weather, fog, snow and that sort of thing, where there's limited visibility. I know that the airlines have raised concerns about whether or not, if the new proposed APPR regulations that the CTA has proposed come into effect, the result could be simply a choice to reduce services in regions where there are risks of delays or risks of cancellations.

Have you looked at those new proposed regulations? Has the Gander airport responded or provided any feedback on them? Do you share the concern that if the regulations are too onerous, they will result in less service to rural, remote and northern communities?

[Reg Wright]

Yes, I absolutely do share that concern. It's a very delicate balance to protect the needs of consumers. I think we would all universally agree on that, but there may be unintended consequences. Without getting into too much detail, I think the demands for the time in which a delayed flight has to be recovered by the airline make it very easy for them to axe markets that don't have daily service.

It's easy to get another tail to fly a route if you're at Trudeau or Pearson, but when you're in Moncton, New Brunswick, or Gander, you have to remember that most of these shoulder season services are built on non-daily service. We have carriers flying two or maybe four times a week as they try to build demand and go to daily. That's crucial.

We talk a lot about airline profitability. I won't say it in front of the committee here, but sometimes the margins on what airlines make per passenger can be quite shockingly low. If the penalty regime is too high, it can wipe out months of profitability in a single flight.

Again, I'm not against it, but I do think it needs to be carefully, carefully assessed. What is the impact on air service in rural communities? Furthermore, is it a disincentive to travel? Also keep in mind that any costs borne by the airlines will ultimately be handed on in some shape or form to consumers.

[Mark Strahl, Conservative, Chilliwack—Hope, BC]

I also want to talk to Mr. Kendall about flight duty hours.

You talked about pilot shortages, and you talked about capacity. If you have to fly four flights to replace the one jet that no longer can fly into a gravel runway, you need four times the crew.

You talked about $140,000 to train a pilot. Often the small rural or regional airlines train the pilots, who are then immediately poached to the more profitable bigger airlines. You become almost a free training ground for someone else to poach your pilots.

We've heard from rural, remote, northern airlines and charter companies, etc., that they are having a really difficult time with the flight duty regulations and Transport Canada's lack of flexibility there. Obviously, pilot safety and aircraft safety are number one, but can you talk about the impact those regulations have had on the ability of northern airlines or northern operators to continue to provide the vital lifeline to northern communities?

[Robert Kendall]

I can't talk at length about that. All I can tell you is that my experiences in talking with the people who are operating up there is that, with the distances you have to fly and the distance the aircraft is able to fly with a full load of fuel, it sometimes causes layovers, which causes crews to not be able to go to the next stop. Before, they would have an extra two or three hours to fly. They would make it to the next site and complete the run. They may have to lay over a day now and do the remainder of the trip. From what I have heard, it has caused serious issues, there's no question. With crews being as limited as they are, it's true.

To answer your other question, the last 737-200 will be out of service with Air Inuit next summer.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Kendall.

Thank you, Mr. Strahl.

Next we have Mr. Fillmore.

Mr. Fillmore, the floor is yours. You have five minutes, sir.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you Mr. Chair.

Thanks very much to the witnesses here and online.

I'm sorry that Mr. Davidson is not here. I wanted to say to him that we really appreciate his passion on the topic of emissions, and I did feel that I needed to remind him that Canada has the third-lowest gas tax regime in all the OECD nations. Canadians are the highest tailpipe emitters in the world, and we all need to do better.

We've heard from witnesses today about the challenges that we're facing: inflation due to the pandemic and war; the cost of capital similarly related; mergers; the shortages of skilled labour, be they pilots or on the ground; foreign ownership within Canada; and availability of capital. There are a number of headwinds that the industry is facing right now.

Government is certainly doing its part. We want to know more about what else we can be doing.

The standout in the testimony so far for me this morning has been the role of industry partners and what partners can do.

Mr. Kendall, we heard you speak about alternative runway materials, as an example.

I wonder if the witnesses would care to opine on what the role of industry partners might be in helping to face the headwinds that lie ahead in a broad sense.

Mr. Wright, you mentioned in particular the development of a new aircraft.

Could we hear about the role of industry in solving these problems?

[Reg Wright]

It's a universal problem across rural jurisdictions all over the world. There is not yet any ready replacement for something in the sub-50-seat range that is intended to service light-density spoke markets and can operate economically. I think a lot of those problems would be solved with the development of that.

On those partnerships with aircraft manufacturers, if more than one country is involved in supporting this development and working with industry, an accelerator fund or something clean and efficient that can make those loops in a profitable and environmentally friendly standard would be welcome in almost every small spoke market in the world.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you for that.

Mr. Benedict, I wonder if there's any role for development of destination-by-destination partners that can help to ease some of the challenges, if that makes any sense to you.

[Sébastien Benedict]

I said something about that a little earlier. There isn't enough tourist traffic in the remote regions. Apart from the problem of getting there, people realize, once they've arrived, that there are no car rentals, no taxis and no shuttles or buses to get them to tourist attractions.

To make it easier for tourists to get there and to be able to welcome them, the necessary infrastructure has to be built at the regional airports, including adjacent services. That can be done by working with travel agencies or agencies that sell all-inclusive travel packages. That way, when they make reservations for tourists who want to come to our region, they can reserve support and transportation services for those tourists in advance.

[Andy Fillmore, Liberal, Halifax, NS]

Okay, I understand. The goal is that we want to have full airplanes landing in places with full hotels so the whole operation is profitable. I understand.

In the moments left in my time, let's stick with an airplane analogy. If we pull up on the stick and rise up above the clouds where the visibility is unlimited and we look ahead 20, 30, 40 years, where do you see this industry in Canada being at that time? I'll give you one example. We're hearing about electric airplanes. We're hearing about the possibility of hydrogen-powered airplanes. We had a witness on the study earlier who's involved in ideating about a future with dirigible airships to help solve some of these problems, although we didn't get any testimony on that. I just wonder where the witnesses see our industry in Canada in 30 years and what we might be doing now to help get there.

I would open it wide to anybody who wants to think expansively.

[Robert Kendall]

On the dirigible airship side, they will likely be short-haul. Mining companies might operate them, that sort of thing. They're slow, at this point, 70 knots. You're not going to have one coming up from the south to the north, but perhaps it will be from a hub centre where they would take supplies a short distance, 70 to 100 miles, whatever. I know Boeing and Lockheed are looking at developing those types of aircraft now.

In the next 40 years you're going to have more composite body aircraft flying, and there's going to have to be some method of ensuring they're safe when they're operating off the runways they're using.

[Andy Fillmore, Liberal, Halifax, NS]

Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Fillmore.

Thank you, Mr. Kendall.

Mr. Lemire, you have the floor for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Mr. Benedict, one of the major issues for regional airlines, in addition to ticket prices, is guaranteeing reliable service and suitable flight schedules.

Take, for example, Rouyn-Noranda regional airport, where flight schedules have often changed in recent years. These days, it's virtually impossible to come back from Europe without spending a night in Montreal, which makes it difficult to attract foreign tourists and international travellers to our region.

You should also understand that people love to have their connecting flights on the same ticket because it protects them when delays and problems occur, as they quite frequently do. There's also the issue of the prohibitive prices of tickets for international flights in Canada.

I'd like to know what you think about agreements between carriers, because one of the things that travellers are concerned about is coverage in the event of delays, postponements and losses resulting from a change of carrier. Is there any legal or other way to switch from one to the other? I'm thinking, in particular, about transferring baggage. Travellers should be offered more options and market competition. For example, you could arrive in Montreal on Air Transat but switch to another carrier, without penalty, to get to your regional destination.

[Sébastien Benedict]

I think that's possible, absolutely.

As we always say, you have to make life easy for tourists. If a trip looks complicated to them, they will change destinations or travel plans.

Unfortunately, connecting flights or the routing that an airline company offers is often complicated. However, if airlines co-operated, that would make life easy for tourists and help increase travel to the regions. From a market standpoint, co-operation between airlines would obviously be difficult, but it's the way to go if we want to promote tourism.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

As we all know, the return portion of a round-trip ticket is sold at a lower price. In the regions, that limits travel frequency and competition because it forces people to return with the same company. That's also true of connecting flights to international destinations.

Are there any innovative measures that might help our regions in this area? I'm not saying carriers should stop discounting round-trip tickets. However, if all connections were for sale at the same price, that might make it easier for travellers to take connecting flights with another airline.

[Sébastien Benedict]

What we're saying is that international tourists don't currently have access to the regions. They arrive in Montreal or Quebec City and have no options, which means that very few tourists travel by air to visit remote regions. As we said earlier, it all comes down to price, which is the first criterion that influences tourists' choices when they buy an airline ticket. If we penalize them because they have to travel out or return to the same place, they'll choose another option.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Schiefke]

Thank you as well.

Mr. Bachrach, the floor is yours. You have two and a half minutes, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I have one last question for Mayor Pond to round out the meeting.

We've heard from the big airports in Canada, which pay rent to the federal government to the tune of some $400 million per year, that they would like that rent either waived or reinvested in airport infrastructure as a way of supporting their operations and driving down costs for users of airports. Of course, that doesn't speak directly to the needs of small airports, especially municipal airports that are owned by municipalities.

I wonder if there might be some sort of similar accommodation provided by the federal government that would make the maintenance of airport infrastructure and the operation of airports easier for municipalities like Prince Rupert. Whether it's on the infrastructure side or the operating side, is there a need for greater federal support?

[Herbert Pond]

Yes.

I think we need to step back and take a look at the network. We look at these as individual airports, as if any one of them could survive on its own. However, every flight has an origin and a destination, and many of them have connection points in between. The big change that took place back when the airline industry deregulated was that we got the hub-and-spoke model. Airlines finally realized that 30% to 40% of their transcontinental traffic actually started in small communities like Comox or Prince Rupert and fed in. We need to think of that network as one. If Vancouver International Airport has excess money in paying rent, that should be enabling Prince Rupert, Terrace and Smithers to continue to operate because Vancouver cannot do what it does if there aren't other airports in this. It's a network, and we somehow have stopped thinking of it as a network.