Transport Committee on Dec. 13th, 2024

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

It's from Prince George to Vancouver, okay. Thank you so much.

My third question relates to babies. I have a young daughter, and I have a young son, and constituents in my riding want to make sure that baby bags are not subject to bag fees, as we have discussed earlier.

[Alexis von Hoensbroech]

They are not subject to this.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you

[The Chair, Liberal, Peter Schiefke]

Next, we have Mr. Rogers.

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

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Thank you, Chair.

I appreciate the guests today who are answering our questions in regard to these fees that are being charged by WestJet and now, of course, proposed by Air Canada.

There are a couple of points I want to make.

One is that, since the COVID era, WestJet has been noticeably absent—and I discussed this with Mr. Gibbons a number of times—from regional rural airports, which is creating a real problem for travellers like me. For instance, the only way I can get in and out of Gander is by Air Canada and provincial airlines. Accessibility is a big problem. Our major concern is access to regional airports like Gander and others in rural Canada. It's a real challenge.

I used to be a regular WestJet customer with the card that you talked about that gave me some benefits. I liked the airline. I enjoyed the service when I was able to access the service. Now, of course, I'm no longer a WestJet customer, because I can't get to it unless I drive a long distance to St. John's or somewhere else or fly to Halifax or somewhere to get to use the airline's services.

I'd like to know how soon you are going to be able to move from this urban model of flying that you currently have and get back into these regional hubs, I call them, like Gander, for example, in the rural parts of Canada, because that's sadly missing. These fees are not something I like, but that's a bigger concern right now.

[Alexis von Hoensbroech]

First of all, I want to dispute that. We do fly to many regional airports, especially in western Canada, and this is a big part of our strategy.

What I will say, though, is that especially those high fees and charges are burdening regional airports more than the big airports, because those routes are often very marginal. If then the prices go up and, therefore, fewer people fly or it cannot be put on the ticket price, then those routes can easily go under.

By the way, APPR is also a big risk for regional flying, because, if you have just one flight that becomes APPR-eligible, this can easily eat off the entire profit for the year, so then you can equally not fly.

I also want to say that I think it's a pity that you did not invite any of the CEOs of the northern regional airlines like Canadian North or any of those regions, because they have to deal with exactly this every single day.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

I have five minutes here and not a lot of time to ask my many questions.

When I see routes being cut out in parts of Canada that are important to me, my region and my province, and fees going up, that leaves a very poor taste in my mouth—whatever airline it is. I would say the same to Air Canada.

Air Canada, to its credit, has maintained routes, either through Jazz or through provincial airlines, to keep servicing Gander and some of the smaller regional airports, but the cost of doing that has gone through the roof. If you talk to people in the Happy Valley-Goose Bay, Labrador and Wabush, flying intraprovincially costs enormous amounts of money to fly from one location to the other and to the capital city of St. John's.

Air Canada, why are you considering fees for baggage when you consider the costs they're adding to people's flights?

[The Chair, Liberal, Peter Schiefke]

I'm sorry, Mr. Rogers. Air Canada is on the second panel. It's not on this one.

[Churence Rogers, Liberal, Bonavista—Burin—Trinity, NL]

Oh. I'm sorry.

[The Chair, Liberal, Peter Schiefke]

If you have a question for Porter, WestJet or Air Transat....

[Alexis von Hoensbroech]

To your regional concern, there are great examples around the world. The U.S. has an essential air service program. Europe has a public service obligation program that supports small regional flights.

I think Canada should look at those programs and consider whether they are something Canada could adapt for Canada.

I think Andy has one more comment.

[Andrew Gibbons, Vice-President, External Affairs, WestJet Airlines Ltd.]

Mr. Rogers, I want to touch on Newfoundland and Labrador because it was two years ago at this committee that you asked, very point-blank, whether or not WestJet would leave that province. What we said at the time was that we had no intention of leaving that province and we intended to grow.

Since then, you've seen us address the biggest air access gap the province had, which was direct flights to Europe. Actually, next summer, we'll have a daily flight between Europe and the province—to and from—which has been so incredibly well received. Even in a small community like Sydney, Nova Scotia, we added a new flight for next summer.

We have a very strong growth story in Newfoundland and Labrador. I know we are missed in Gander, and we are committed to working with you on that.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Gibbons.

I'm going to have to cut you off there, unfortunately. I'm trying to stick to everybody's time.

Mr. Barsalou‑Duval, you have the floor for two and a half minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Mr. von Hoensbroech, I've been listening to you for a while, but I'm having trouble following you. Correct me if I'm wrong, but a person who boards a plane with no baggage for a flight lasting two, three, four, five, or six hours is the exception rather than the rule, I think. I would very much like to see your data, to know what percentage of passengers travel with no baggage, whether checked or carry-on. This is a new thing. It was free of charge before.

The prices posted for flights do not include charges for checked baggage or carry-on baggage. Basically, when a consumer picks their flight, they don't see the actual price they will be paying. This is what I consider to be problematic. Ultimately, they can make a choice as to what airline to travel with, but what can they do to be sure that all the companies are charging the same for checked baggage and carry-on baggage? What can the consumer do to figure everything out?

[Alexis von Hoensbroech]

We had 1.2 million Canadians who bought an ultrabasic fare and did not bring a large carry-on bag and check a bag. That's a significant number. It's about half of all the ultrabasic passengers we had.

By the way, if someone has a WestJet credit card, they can buy an ultrabasic fare and check a bag for free. If they have a loyalty status, they can do the same, so there are many ways to enjoy the low fare.

With regard to prices—obviously, how much a bag costs is pricing—there can never be a uniform price among competitors because this is a price competition that competitors will never talk about.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

So you are confirming that it is very difficult for a consumer to compare one carrier with another, because all they can compare are the ticket prices. They don't know how much they will be charged for baggage. These are hidden charges, in a way, and that can undermine their choice. I see this as a problem.

[Alexis von Hoensbroech]

I'm sorry. I disagree, because it's very transparent. People can look up the fees, so they don't blindly book something and then suddenly find out that they have to pay something else. They can see it. Part of the booking process is how much it will cost.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Barsalou‑Duval.

Next we have Ms. Dance.

The floor is yours for two and a half minutes, please.

[Leila Dance, NDP, Elmwood—Transcona, MB]

Thank you, Mr. Chair.

We've heard that if the external fees were lowered, it would cost less for travellers and they would be able to save money.

Knowing that companies like all of yours have the financial responsibility to their stakeholders to make as much money as possible, what's the guarantee that even if we can manage to convince the government to lower these fees, you won't just keep your prices at that same level or higher?

[Alexis von Hoensbroech]

That's very easy.

As I said before, we have been flying with five million empty seats and we would like to fill those seats. The way to fill those seats is to have people fly who otherwise wouldn't be flying. If the fees and charges were half of what they are today, this would allow us to offer tickets at an all-in ticket price that would get people off their couches to go into an airplane because they then can afford it.

This would grow the pie. There would be more than 10 million additional people in Canada who would then be able to fly who can't fly today. That's our gain. Our gain is not to put the price up, but to stimulate new people who would otherwise not fly.

[Leila Dance, NDP, Elmwood—Transcona, MB]

Don't you think more people would fly if it was more reasonably priced?

[Alexis von Hoensbroech]

That's exactly what I'm saying. More people would fly if the minimum price that you can offer is lower.

Right now, you basically cannot offer a ticket price that's below $100. If you go to Europe, people fly for 39 euros or dollars or whatever. That's because the taxes and fees that are being added to the ticket are much lower in Europe. That's why Ryanair can actually do it. They offer the cheapest prices and they are the most profitable airline in Europe. I mean, if you just put these things together, it's pretty obvious where the problem sits.

[Leila Dance, NDP, Elmwood—Transcona, MB]

Yes, I've flown Ryanair. I was able, as a single mom, to hop around Europe with my son. I was able to afford their $30 and $40 tickets. It was extremely reasonable. I think that's the problem. I would have loved to have travelled across Canada with my son, but the prices here are just far outpacing those things.

I get that you're talking about those external fees, but I think that a lot of it is still the individual fee that people are forced to pay when it comes down to all these things.

I booked a ticket with my son a few years ago and we didn't even get to sit together. I was like, “What do you mean we don't get to sit together?” She said that it was the way it was booked because I had paid for my ticket and used points for his. They wanted to charge me to move him, so that we could sit together. I was shocked by it and tried to figure out a way to make that work. My son said he'd sit by himself, but I said that was not going to happen.

It's just one of those things. We see it in the south in the U.S., with some of their seats as well.

I'm just trying to wrap my head around it. I know I'm out of time.

[Alexis von Hoensbroech]

I have just one comment.

[The Chair, Liberal, Peter Schiefke]

Unfortunately, we don't have time.