Transport Committee on Dec. 13th, 2024

[Michael Rousseau]

No, that's not the case because the vast majority of my pay is variable pay, so it depends how we do year over year, and that could be subject to the board of directors' approval.

[Adam van Koeverden, Liberal, Milton, ON]

It's fair to say, though, that, if this fee increases the overall revenues of Air Canada—you increase your bottom-line revenues, which are currently in excess of $2 billion—you will receive additional pay. It's possible, I suppose. Is that not right?

[Michael Rousseau]

This is all outlined in the proxy as to how I'm compensated, but my bonus is based on how well we do versus our plan, not how well we do versus last year.

[Adam van Koeverden, Liberal, Milton, ON]

I get it.

My next question is about other people at Air Canada. We understand that you're compensated very well. We appreciate that it's a competitive corporate market, and we want talented people to be running airlines.

I understand that a lot of the folks on board, who serve us drinks and keep us safe, make sure that we have what we need in flight, they—the flight attendants and the pilots—are not paid for when they're at the airport if they're not on the plane. Is that correct?

[Michael Rousseau]

They're paid based on our contracts that we have, with either CUPE or ALPA, which represent the flight attendants and our pilots, respectively.

[Adam van Koeverden, Liberal, Milton, ON]

I'm a member of Parliament for Milton, so I have a lot of pilots and inflight staff in my community. I understand that, if they're delayed, if they're sitting in the airport, then they're not paid for those hours worked. Is that correct?

[Michael Rousseau]

Again, it's all a function of the contractual terms.

[Adam van Koeverden, Liberal, Milton, ON]

Just answer yes or no: Are they paid when they're not flying?

[Michael Rousseau]

I'd have to go back to the contracts to determine that, basically, under what circumstances.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Rousseau.

Thank you, Mr. van Koeverden.

Mr. Barsalou‑Duval, the floor is yours for six minutes.

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

Thank you, Mr. Chair.

Mr. Lukács, Mr. Rousseau, Mr. Rheault and Mr. Galardo, thank you for being with us today.

I would like to begin with a comment about your opening remarks, Mr. Rousseau, and about you learning French.

I have to say that I am one of the people who were shocked three years ago to hear you say that you were proud not to speak French when you had lived in Montreal your whole life.

Your inability to say more than a few short sentences in French today, not to mention the big trouble you had saying them, leads me to ask whether your commitment to learning French is serious or not.

I do not want to be disrespectful, because I think everyone deserves respect, but respect is a two-way street. Air Canada is a company based in Montreal, Quebec. Quebeckers expect you to learn French. I wonder whether you are serious about doing this.

[Michael Rousseau]

Thank you for your question.

I am serious about learning French. It's certainly taking me longer than I thought, but I'm continuing down that road.

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

Right. I am going to come back to the topic on the agenda, but you will understand that your answer failed to convince me. I hope you will be able to keep up a conversation in French the next time you come to the committee, or at least that you will get there someday.

You are certainly not unaware that Air Canada's announcement that it would be charging $35 for carry-on baggage was met with great indignation in Quebec. There was discussion of it in all the newspapers and on radio and television. Comments from the public were pretty unanimous. People were visibly angry.

Might this public indignation result in you reconsidering your decision to charge these fees?

[Michael Rousseau]

Thank you for your question.

We're always open to modifying something based on market conditions. That's the definition of a good company. As we said earlier, we made this change to align ourselves with our three principal competitors. If something should change in the future, we would obviously consider any type of change that makes sense.

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

In any event, I know that a lot of people are hoping so, and I am one of those people.

I think Air Canada is the largest air carrier in Canada. If I am not mistaken, you have nearly 50% of the domestic market in Canada, and I know it is even higher in Montreal.

[David Rheault, Vice-President, Government and Community Relations, Air Canada]

It is in the forties as a percentage. It is less than 50%.

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

At 47%, it is not far off 50%.

In short, nobody is disputing that Air Canada is the largest air carrier in Canada. In general, we expect an industry leader to set an example. In this case, however, we find that Air Canada is engaged in a race to the bottom.

Is that how you do things? Are you proud of deciding to aim low when it comes to the services offered to the public?

[Michael Rousseau]

Overall, we believe that we're improving services to our clients. I mean, this is one example of a commercial decision. As I mentioned earlier, we make thousands of commercial decisions that benefit consumers, including the one yesterday regarding Wi-Fi and the one earlier this year providing beer and wine to our economy customers and a better snack. There are many, many decisions that we make from a commercial perspective with the overall intent of improving the value proposition for customers and obviously winning market share and the loyalty of the Canadian consumer.

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

You are telling us that you are trying to improve your services and give consumers more for their money, but you have refused to commit yourself to ensuring that the average ticket price drops by $35 for the same services as you are currently providing. So this means that a consumer who would like to get the same product can expect price increases, not price decreases, basically.

[Michael Rousseau]

Again, as I mentioned earlier, I'm not allowed to signal any type of price change in an open forum. That's against the law in Canada. I cannot respond to your question other than to say that the market forces will determine the pricing on all different fare structures as we go forward.

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

Let's talk about that, about market forces. In the future, when people pay the base fare, which will not include carry-on baggage, and they decide to pay to add one piece to their flat rate, will the total price be higher or lower than the price of flat rates that include a carry-on bag, taking into account market forces?

[Michael Rousseau]

Thank you.

I don't know if I fully understand your question. Again, this fare structure aligns with the competition. Our basic fare structure now actually does align with our three primary competitors.

As I said earlier, having four competitors offer the same product in a very transparent fashion should be good for competition.

[The Chair, Liberal, Peter Schiefke]

Thank you very much.

Next, we'll go to Ms. Dance.

You have six minutes, please.

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

Thank you very much.

I just want to thank all the witnesses for coming in today. It's really important that, as members of Parliament, we have stuff that we can bring back to our constituents.

I'm going to start off with Air Canada. I'm going to ask some quick questions to compare those numbers that we heard from WestJet and the other providers in the earlier session.

Can you tell us roughly what percentage of your profits come from these auxiliary fees and such?

How do you make those fees each year? What falls under that category?

[Michael Rousseau]

We don't look at it that way. We look at our total revenues and we look at our total costs to determine what our net profit is in light of the competitive environment. Again, all our prices are fully transparent in many different distribution channels.

It's impossible for me to answer that question.