IN THE WAKE OF Air Canada’s merger with Canadian Airlines, Transport Minister David Collenette two years ago appointed Debra Ward to review the effects of airline restructuring in Canada and make recommendations for the future. Now Ward, 47, a former president of the Tourism Industry Association of Canada, has tabled her 85-page report, recommending, among other things, that the government relax the foreign ownership rules on Canadian carriers and, most controversially, consider “cabotage”—letting foreign airlines operate on routes within Canada, in competition with domestic carriers. Last week, Ottawa Correspondent Julian Beltrame talked to her about the state of air travel.
When you were appointed, Canada’s airline industry was still in turmoil. Are we better off now?
Well, we’re no longer in crisis. In some ways it’s good. Air Canada seems to be getting it together a bit more, Westjet is growing and competition is growing. But it’s not as good as it could be, should be, or ought to be for the long term.
You say Ottawa should allow foreign airlines—in reality, U.S. carriers-free reign to operate in Canada. You even suggest a unilateral move, if the United States isn’t willing to open its routes to, say, Air Canada. How did you come to that conclusion?
If it’s a reciprocal arrangement, it makes sense like free trade made sense. Canadian business has done quite well under free trade, so I don’t see why our aviation community shouldn’t fare as well. Unilateral open skies would be a struggle, but at the end of the day it’s important that the government be able to stand back and look at the greater good—not only what’s good for carriers, but what’s good for consumers.
How do you see it working?
Initially, you could consider cabotage in
regions, like the continental midwest or the two coasts. If you are not getting adequate service, say in Atlantic Canada, you could have a small U.S. shuttle carrier do a loop there. That could be a case where it would be beneficial without severely harming Canadian carriers. We shouldn’t close the door to that because it might help both communities, in Canada and the U.S., get the service they need.
Is it important that Air Canada stay in Canadian hands?
Not to me. It’s important from a national pride point of view. But I don’t think it affects business decisions. We’re labouring under this myth that because these carriers are Canadian, they will do something good for us. Well, they’re not obliged to do anything. They don’t even have to buy Canadian goods and services. They’re businesses and if they fly to certain communities it’s because it makes good business sense and for no other reason.
David Collenette has basically shot down your unilateral open skies concept. Are you
disappointed he has taken such a firm stance?
No. He and I agree to disagree on this. He hired me to do a job without having any idea what I would say, so I give him credit for letting me stir the pot. Don’t forget, these recommendations are meant for the long term. I’m not saying we should do this right away.
In your discussions with travellers, what’s the major complaint about service today?
The biggest frustration I see is that there isn’t enough choice. If people don’t have choice, they don’t have power. Air Canada has 73 per cent of the market now. I believe if given a choice, many people would still choose Air Canada because it’s a better airline than it’s given credit for. It’s certainly better than a lot I’ve flown in the United States. But there’s a world of difference between choosing Air Canada and being forced to to take it because it’s the only game in town.
Do you think Canadians will ever see two national airlines slugging it out for their patronage again?
Not the way they did it before. It would again turn into a war of attrition. But there are other ways. I’d like to see another domestic carrier that somehow manages to feed into an international alliance. That would expand the choices for travellers beyond what we have now. CT1
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