Madam Chairman, I appreciate the opportunity to speak to this take note debate on the difficulties being experienced at present by the Canadian airline industry. Our airline industry has long and short term challenges.
These challenges should be dealt with separately. We should not be mixing apples and oranges. The short term challenges result from the dramatic decrease in the appetite of the consumer for flight travel, especially international flight travel resulting from the terrorist incidents that occurred in New York City, Washington, D.C. and Pennsylvania on September 11.
Before dealing with the financial assistance that a lot of us are speaking about tonight, the first issue that has to be addressed is providing consumers with total confidence in the security of our airline system. Our Canadian system is safe and has been safe. Canada has an enviable aviation safety and security record and is committed to improving that record. However the system is not perfect and improvements have to be made.
Canada and all other countries around the world are taking extraordinary steps to improve the system. Changes must be made in both airport and air flight security. There must be increased terrorism response training for flight crews; increased use of sophisticated technology; total separation of the cockpit from passenger areas; worldwide identification and tracking of known terrorists or people who in the past have associated with known terrorists; and increased penalties for both the travelling public and, more important, the companies that operate within our Canadian airports for any violation of airline security regulations.
It has been said tonight that many of these actions are being taken. I compliment our Minister of Transport for the actions that have been taken to date.
I support the privatization of our airports. I have read or heard nothing that convinces me the Government of Canada is better able to operate the country's airports than the companies that are presently operating them.
Improvements have to be made, especially with the financial plight of our smaller airports. The Government of Canada must make and enforce the rules. What the Canadian airline industry needs right now is a return to normal flight levels.
Airline traffic will return. We are seeing positive signs, especially on domestic flights, that the number of passengers is slowly returning. Immediately after the September 11 incident traffic was down by 60%. Today it is my understanding that traffic is down by approximately 20% and decreasing daily.
On the issue of financial assistance to Air Canada, I am compelled to recommend a go slow and cautious approach. Any decision has to bear in mind that Air Canada lost $108 million in the second quarter of this year. That is nearly a million dollars per day for every day that it was operating during that period.
Robert Milton, president and chief executive officer, announced that Air Canada had to adopt a new business plan and lay off approximately 4,000 employees. That announcement was made prior to the September 11 incident.
Many of the commitments made by Air Canada during the takeover of Canadian Airlines and incorporated in Bill C-26 were in serious jeopardy prior to the September 11 incident. Any compensation package should be based on losses directly incurred as a result of the September 11 incident, and any package should be available to all airlines operating in Canada. That is the short term solution.
Unlike some of my colleagues, I am against the Government of Canada taking over Air Canada. A government owned airline would be cumbersome, uneconomical and inefficient. It would not have the flexibility to operate in today's complex airline industry.
Unlike many of my colleagues, I am against the Government of Canada taking an equity position in Air Canada. This would be politically pleasing in the short term but would cause considerable grief to the Government of Canada. I see difficulty convincing the public as we go forward that the government is not operating Air Canada. As the saying goes, “if you are in for a penny, you are in for a pound”.
The industry's long term problems are caused to a large extent by the sheer size of our country.
Canada is a geographically large country, the second largest country in the world, with a relatively small population. Servicing cities like Montreal, Ottawa, Toronto, Calgary and Vancouver will not be the challenge. The challenge will be providing air service to other cities, towns and regions that require economical, stable and reliable air service.
If Canada is to remain a strong country, regular, stable and cost efficient service is needed in smaller centres. We need a competitive environment, the environment that existed prior to the September 11 attacks. We also need mechanisms that in the long term protect service to our smaller communities.
Looking at the long term and going forward, I invite the transportation committee and the Minister of Transport to look at the following positive recommendations.
First, all airlines should be required, depending on the number of flights they have, to offer service to outlying communities, to the smaller towns, to the smaller regions. This would be done on a comparative basis, based upon the size of the airline and the flights they operate.
Second, all airlines operating on major routes should be required to accept passengers of a competitive regional carrier at a reasonable cost. This code sharing is similar to the concept that has been already successfully adopted in the long distance telephone industry.
Finally, and most important, there are many routes because of their remoteness that will require government assistance. Air service is the lifeblood of many communities in the western part of Canada, right across the northern part of the country and in Atlantic Canada.
The Government of Canada provides assistance for roads and wharfs. It assists the rail industry. It is only normal to accept the proposition that some assistance would go directly to the airlines that provide service to these communities.
There is tremendous pressure today, tonight and tomorrow on the government to straighten all the problems of the airline industry. We are under some artificial deadline this week. There is suggestion the train is leaving town and that everyone should be on the train.
What I am saying tonight is that the trains are already gone from a lot of these smaller towns, cities and regions. They do not have trains and they need air service.
The public is returning and will continue to return to the air. The short term difficulties should be dealt with as such. At the same time the government should seize this opportunity, this crisis, to look at a made in Canada solution to the long term challenges facing our Canadian airline industry.