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Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 6 - Evidence, November 23, 2010


OTTAWA, Tuesday, November 23, 2010

The Standing Committee on Transportation and Communications met this day at 9:30 a.m., as part of its study on emerging issues related to the Canadian airline industry.

Senator Dennis Dawson (Chair) in the chair.

[Translation]

The Chair: Honourable senators, I call this meeting of the Standing Senate Committee on Transport and Communications to order. Thank you for being here today. This morning we are continuing our study on the airline industry.

[English]

Appearing before us this morning on behalf of the Association québécoise du transport aérien is Mr. Marco Prud'homme, Chief Executive Officer.

[Translation]

Mr. Prud'homme, the floor is yours. Afterwards, we will move on to questions from the senators.

Marco Prud'homme, Chief Executive Officer, Association québécoise du transport aérien: Thank you, Mr. Chair.

[English]

I would like to thank the committee for giving us the opportunity to present our concerns regarding the emerging issues that our industry must deal with.

[Translation]

The AQTA is a non-profit organization dedicated to the development of the air transportation industry in Quebec. We are the only association that represents all sectors of the Quebec air transportation industry (transporters — both fixed wing aircraft and helicopters — flying schools, airports, and maintenance and service companies). After celebrating its 35th year of existence, the association now encompasses over 150 member companies.

We believe that the most important issues that our industry must face are the environment, safety and future personnel. Air transportation is a complex system. It is essential to keep in mind that these three issues are interrelated.

The first issue is the environment. In our industry, operational sustainability requires us to control our impact on the environment. Most discussions regarding environmental issues are related to greenhouse gas emissions. In order to put things in perspective, we would like to mention that the air transportation industry as a whole generates only 2 per cent of CO2 emissions produced by industrial activities.

Despite this performance, the International Civil Aviation Organization, or ICAO, has already set the goal of reducing that performance further by 2 per cent annually until 2050. In order to reduce greenhouse gas emissions, the key solution is to use higher performing and more efficient aircraft in terms of energy consumption.

However, environmental issues are not limited to CO2 emissions. Recent studies have shown that the greatest impact of our industry does not stem from CO2 emissions, but rather from the production of condensation trails, known as contrails. These cirrus-type clouds are produced by water vapour generated at high altitudes by aircraft engines. It appears that this phenomenon has a greater negative greenhouse gas effect than CO2 emissions. In order to counter this problem, our industry will be required over the next few years to discover more effective methods of managing flight altitudes and the ICAO estimates that it will take approximately 10 years to implement the necessary adjustments.

In order to define the actual impact of our industry on the environment, we must take into account the life cycle of both aircraft and facilities. A life cycle analysis puts in proper perspective the energy required to build aircraft and infrastructures. This analysis also takes into account the energy consumption of aircraft throughout their useful life.

Finally, the analysis includes the environmental cost related to decommissioning such aircraft. The life cycle studies that have been conducted until now have proven that air transportation is highly performing and that energy consumption is quite low during long distance journeys, if we compare it to marine or rail transportation.

One cannot discuss the topic of the environmental impact of air transportation without covering the issue of noise emissions. This issue is a favourite topic of the media. The federal Ministry of Transport has previously acknowledged the importance of keeping a certain distance between airport facilities and residential neighbourhoods. Unfortunately, the municipalities' vested interest in residential development and airport transfers have impeded the development of our industry. Some residents have played the environment card in order to get heard; however they always fail to mention that a spreading urban landscape also negatively impacts the environment, and does so permanently. We believe it is vital to better manage airport-adjacent land if we wish to ensure the long-term sustainability of this method of transportation.

Environmental issues require a long-term approach and a significant room to manœuvre in order to ensure the implementation of structured solutions.

The second point I would like to talk to you about this morning is safety. Canada stands out as an international leader in matters of safety. However, there is a significant disparity between reality and the perception of the Canadian public regarding the level of safety that exists in air transportation. Listening to some media reports, you could easily conclude that activities in our industry are extremely dangerous. That negative conclusion would be far removed from the reality.

Over the last twenty years, the air transport industry has consistently improved its statistics. There are now less aircraft accidents and fewer fatalities. For instance, in 1999, a total of 170 aviation accidents were related to commercial flights. In 2009, the Transportation Safety Board of Canada listed only 95 similar occurrences. Of those, only 13 were identified as fatal accidents. In fact, a total of 36 fatalities were reported in 2009 for over 101 million passengers transported by air. That is twice less than the number of people who die every year through a drowning incident while fishing.

For comparison purposes, approximately 2,500 lives are lost every year in road accidents. Per kilometre air transportation is 22 times safer than road transportation.

While visiting Quebec recently, the ICAO's General Secretary stated that, without safety, there would not be civil aviation.

Despite enviable statistics in terms of safety, we must propose and implement new tools to further improve those statistics. Such tools could be technological, regulatory, or organizational in nature. In each case, we need sufficient leeway to reach our objectives and maintain the public's confidence.

The third issue relates to future personnel. According to the ICAO, we are going to experience significant manpower shortages in the future. Worldwide, the annual demand will reach approximately 50,000 pilots per year by 2030, while global training capabilities total some 47,000 pilots per year. Similar situations exist for other professions within our industry.

We can already feel the effects of this manpower shortage problem in Quebec. Before the recession began, our industry was already dealing with a number of workforce problems. Massive recruitment efforts put forth by airline companies have created a turnover rate of more than 75 per cent for small companies based in Quebec. The recent recession has led people to believe wrongly that the problem has abated. While the problem is currently latent, however, it could resurface due to the recovery and numerous retirements. This problem is prevalent in a number of industry sectors. It is vital that tools get implemented to forecast labour needs and establish better working conditions, which will require resources. In order for the industry to train the workforce it will need, the vocation of some airports must be protected.

In conclusion, we have spoken to you today about three issues: the environment, safety and future personnel. Unfortunately, the air transportation industry does not enjoy the required room to manoeuvre in order to implement the initiatives necessary to deal with these three issues.

Since these sessions have begun, you have heard a number of extremely relevant testimonies, including that of the National Airline Council of Canada, regarding the fiscal policy framework. We share this concern; however, we believe that the fiscal dynamics do not represent a new issue. The particular problem has persisted for many years and has restricted resources for the air transportation industry to deal with the new issues.

Any issue can be viewed as a problem or as an opportunity. However, in order to do so, we must make use of creativity, resources, and leadership. We believe that, in order to further develop the air transportation sector and ensure its ability to meet these new issues, we must provide a long-term vision for our industry, one that will recognize its economic and social value.

The Chair: Thank you for that excellent presentation, Mr. Prud'homme.

[English]

Senator Mercer: Mr. Prud'homme, I have a couple of questions. I did not quite understand when you talked about environmental analysis. You said that the analysis includes environmental costs related to the decommissioning of such aircraft. I can understand the capital cost issues with represent to decommissioning an aircraft and taking it out of service, but I do not understand the technical aspect and the environmental costs. Could you explain that so the viewers and I can better understand?

Mr. Prud'homme: When an aircraft gets to the end of its commercial or useful life, you have two choices. You either park it somewhere in the desert, where it is an environmental hazard for years to come, or you can take this into consideration and recycle most of the aircraft.

Companies that build aircraft today take into account that they will have to be recycled down the line, but most of the aircraft currently flying were not built with that vision. What we do with aircraft is an important issue. Third World countries are buying used aircraft, but we need a bigger vision on that issue.

Senator Mercer: You are including the aircraft sitting in the desert in Arizona today.

Mr. Prud'homme: Yes.

Senator Mercer: The second issue that I found surprising was your statistics on the shortage of personnel. In the industry over the past several years we have seen cutbacks by airlines, and pilots and other workers being laid off in the industry, but you are predicting a major shortage of pilots by 2030. We know that pilots are not turned out overnight. It takes a while to train a pilot. Is it your recommendation that there is a role for the federal government, obviously working with the provinces, which have some training responsibilities, to come up with programs to train more commercial pilots?

Mr. Prud'homme: That is a very interesting question. We have to keep in mind that Canada is not alone. We operate in a global world, and many new economies are building aviation industries and they need pilots. They are putting forth pressure to train more pilots. Some of our Canadian pilots are going abroad to make a living.

Although we have the capacity in Canada to train many pilots, this industry is not attracting as many youngsters as we would like. We need to improve working conditions, and we need the airports that have the vocation to do the training in Canada. That is basically the issue.

Senator Mercer: A recent court decision overturned the mandatory retirement age being imposed by Air Canada. The retirement age was 60, and they have overturned it. Will that help the pool of pilots that will be available?

Mr. Prud'homme: Most of the small carriers already have pilots who are over 60. Air Canada's policy actually helps the smaller carriers because when these pilots do retire, they come to us and offer at least five years of labour. If this goes ahead, it will put even more pressure on small carriers.

Senator Mercer: Many years ago, we used to think that we got most of our pilots from former military people. I suspect that is not the case today. If that is not the case, are they being trained at local flying clubs across the country? Is that where they are coming from?

Mr. Prud'homme: There is a mix of both, but for general aviation, the small carriers, most of the pilots are trained in flying schools.

Senator Zimmer: Canada has negotiated a number of Open Skies agreements, the most important of which are those with the European Union and the United States. How effective have these agreements been in benefiting the Canadian airline companies and travellers, and should these agreements be expanded to allow for cabotage?

Mr. Prud'homme: That is a good question. I do not think we are the most legitimate association to respond to this question, since most of our members do regional transportation. We do not do much international carriage, so I would prefer not to answer that question.

Senator Zimmer: The Canadian air sector pays a large amount of fees — some estimates put this at approximately $1.2 billion annually — for such things as fuel excise taxes, grant in lieu of taxes, airport rent and security fees. It turns out that the cost of a ticket is almost the same amount as these fees. In fact, very soon, they will probably charge us for the oxygen we breathe in on the plane and turn into carbon dioxide. All of a sudden the fee has doubled. How, if at all, have such fees affected airline growth in Canada? Many people in Canada, if they are flying to Florida, drive over the border and take a $99 flight from there. In your opinion, how has that affected the airline industry in Canada?

Mr. Prud'homme: If you look at the carriers in general, you will find that most of the fleets are pretty old. The companies do not have enough — excuse me for the word here — "oxygen" to reinvest and bring back more aircraft. In the last 10 years alone, entrance fees tripled following 9/11. We have faced many issues that we did not face in the past. We are paying a navigation fee that U.S. carriers are not paying. Some airports have very expensive landing fees. Airport managers have to work with strict guidelines because they have to pay rent to Transport Canada. All those fees add up. In the end, when we face new issues and challenges, we do not have a war chest with which we can respond and do something. Most of the carriers have a benefit margin between 3 to 5 per cent. This is not the construction industry. We are down to the last minute.

One of the things that saved our industry in the last recession is that it happened in the fall. Most of the carriers know that aviation is a seasonal activity, and they make their money during the summer and then prepare for the long winter. If this recession had been in the spring, we would have a major issue right now. We were lucky because of the very careful attention that carriers paid to their profit and income. That is what saved us in Canada.

Senator Zimmer: Almost like hibernating bears.

Mr. Prud'homme: Almost.

[Translation]

Senator Fox: Mr. Prud'homme, my questions relate to the issue of future personnel, but first I would like to take a step back. If you do not feel comfortable answering, please say so. A few years ago, in Canada, we experienced a major crisis set off by the Mouvement des gens de l'air and the issue of French. Is this still a problem today?

Mr. Prud'homme: I think that it will always be a problem. The transportation regulations were recently changed, and it is now possible to pilot a plane in French in Quebec. But outside of Quebec, it is strongly recommended that pilots use English, for safety reasons.

There was no debate a few years ago when these new regulations were proposed. With all due respect for the Gens de l'air, I think that the goal of taking that action was mainly to give equal opportunities to francophone pilots. Right now, in Quebec, we have airlines that hire francophone pilots.

Senator Fox: Does this Mouvement des gens de l'air still exist?

Mr. Prud'homme: Yes.

Senator Fox: Going back to future personnel, since it is a matter of training, the Government of Canada has a role to play when it comes to professional training. Our committee can certainly make recommendations for improvements.

When we talk about future personnel, pilots are not the only ones in demand, but technicians of all kinds are as well. Can you tell me about the current situation in Quebec, for example? How many schools allow individuals to aim for a career in the aviation industry, either as pilots or technicians?

Mr. Prud'homme: That is an interesting question. In Quebec, since 2001, we have noticed a decrease in the local clientele. Overnight, aviation became less attractive and lost its appeal with young people. A number of schools in Quebec had to look overseas. We were talking earlier about shortages. A number of emerging countries, like China, do not have the infrastructure to train their own pilots. So they turn to Canada. If we had not been able to open our training centres to an international clientele, a number of schools would have been forced to shut down. Thanks to international training, we did not lose too many Quebec flying schools. However, to meet the demand, we will need to attract youngsters. To do this, we must improve wage conditions and find a balance between work and family commitments, which is far from being the case in the air transportation industry.

Senator Fox: I am thinking about a number of flying schools located in airports, but also in educational institutions, such as CEGEPs, including the CEGEP in Longueuil, among others. There is a formal school at Mirabel. Tell us about the interaction between these schools. First of all, do we have enough schools?

Mr. Prud'homme: In Quebec, there is a public pilot training program at the Chicoutimi CEGEP at the Saint-Honoré airport. You have the École nationale d'aéronautique and a school for online work that is focused more on aerospace. There are a few training centres, including the one at Mirabel, and a number of flying schools. Some institutions offer training for the management side of the business. All in all, the training offered is fairly complete. But there is a lack of communication between the various levels of the industry about the workforce needs.

Senator Fox: You were talking about the need for pilots and mechanics. Is it also a matter of training the workforce to work, for example, at companies like Bombardier or Pratt and Whitney?

Mr. Prud'homme: The field of aerospace is related to the air transportation industry. Unfortunately, this field is not within my realm of expertise. Today I am representing the air transportation industry. In that capacity, I would say that we have the schools in place, but we do not have the demand from the population to meet the need.

Senator Fox: You spoke about an international demand for about 49,500 pilots annually and a global training capability of about 47,000 pilots. Do you have data that reflects the demand in Canada and in Quebec, and the training capacity in both cases?

Mr. Prud'homme: I could send that local data to you. Unfortunately, I do not have those numbers with me at the moment.

Senator Fox: In the text for your presentation, the last sentence of the paragraph about future personnel says:

In order for the industry to train the workforce it will need, the vocation of some airports must be protected.

Can you elaborate on that and list those airports?

Mr. Prud'homme: For example, the Saint-Hubert airport was built in the late 1920s or early 1930s. Flying schools were set up in that airport in the 1960s. Training has been offered at Saint-Hubert for several decades. However, with urban sprawl and the fact that there are more and more residences in the areas around major centres, we are under a lot of pressure to limit the activities of the schools, because the houses are being built a few metres from the runways. This is the problem we are having in Saint-Hubert, but it seems that other places are having the same problem, and it is clear that residents are concerned. As a result, we need to ask ourselves some questions.

These airports were initially built in remote areas, away from the general population. Unfortunately, there might not have been a long-term vision to protect these airports. Right now, we have two alternatives. We can spend several million dollars to relocate these airports to more remote areas. But, in the long term, if we do nothing about urban sprawl, we will have the same problem in a few years.

Senator Fox: You talk about airports in particular. Do you have any specific examples?

Mr. Prud'homme: The airports in Mascouche and Saint-Hubert train the most pilots in Quebec. There has often been talk about moving these schools. But they do not have the financial resources to move elsewhere.

To ensure that we have a vision for the long term, we need to ask ourselves whether we need to protect these airports or instead build airports specifically for training by establishing protected zones around those airports.

Senator Fox: So here is another sector where we have a workforce shortage, for jobs that are highly interesting and well paying, even if the salaries could be better.

Mr. Prud'homme: I often attend career fairs where we meet a lot of youngsters. Kids of today have different dreams than the youngsters of my time or even before that. Wage conditions are very important. The possibility of sharing your time between family and work is a dynamic that we have not taken into account in our industry. It takes people who have a calling and we need to change the existing mentality. To change the mentality, we need more resources.

[English]

Senator Cochrane: Is there a labour shortage right across Canada? Do you know about that?

Mr. Prud'homme: My association represents the carriers in Quebec.

Senator Cochrane: Yes, I know that.

Mr. Prud'homme: I can tell you that before the recession all the small carriers were having issues with finding pilots. If you compared a picture taken at the beginning of the year and one taken at the end of the year, you would find that 75 per cent — more, in some cases — of the employees were new. It is a challenge to improve an enterprise and put forward a culture of safety when you have so many people coming and going.

Major airlines need many pilots, and the small carriers train those pilots for the industry. Before the recession, some aircraft had to stay on the ground because we did not have enough pilots.

Currently, we are coming back, I hope, on the right side, but we have concerns regarding new employees.

Senator Cochrane: You said that you are out there trying to encourage people to become pilots.

Mr. Prud'homme: Yes, we do that.

Senator Cochrane: Is that right across the country or just with your airlines?

Mr. Prud'homme: In Quebec, we try to talk to the youngsters at carrier events, where we promote the aviation industry. We need to get the information out. For example, it is very important to know that it costs between $50,000 and $75,000 to become a professional pilot.

Senator Cochrane: I am aware of that.

Mr. Prud'homme: Not everyone has family money to do that. Some cannot afford to borrow that amount of money, and they end up doing something else. Training for some jobs is very expensive, so it is not very attractive.

Senator Cochrane: Are we losing some of our pilots to the northern areas where incomes might be higher?

Mr. Prud'homme: I do not think we are losing them because aviation is across the country. We like the fact that pilots go up North and gain experience in northern conditions, which are quite particular to this country. These people gain experience and come back to fly for a major airline.

There is a natural road that pilots travel to gain experience and improve their skills. That is not a concern.

Senator Cochrane: Do you think that the cost is the major impediment?

Mr. Prud'homme: The cost of what?

Senator Cochrane: The cost of training to be a pilot.

Mr. Prud'homme: Yes, the cost of training limits the interest for a young person to do so.

[Translation]

Senator Boisvenu: My question concerns recruiting new candidates. From what I understand, the business of flying is predominantly male.

What is the percentage of men and women who fly?

Mr. Prud'homme: Unfortunately, you are right. We have still not managed to attract more women to the industry. There are a few. Every year, I take part in the graduation ceremony at the CEGEP in Chicoutimi. Out of a group of 30 or 40 students, there are maybe two or three young women. This gives you an idea of the percentage; it is quite minimal.

Senator Boisvenu: When we look at the lack of perseverance our boys have to go anywhere beyond grade seven, when we see the high school drop-out rate, do you think there is a specific strategy that can be developed to attract more women to flying?

Mr. Prud'homme: We know that there are youngsters who are interested. For example, the cadet movement has groups across Canada and trains pilots to get what we call a recreational permit, a basic licence. We have youngsters who are interested in flying. Unfortunately, when we face the financial reality outside that program, youngsters just do not have the resources to continue. Are there youngsters who are interested? Yes. Could we also interest more youngsters? Really, there are two aspects to this problem.

Senator Boisvenu: One last quick question: have you suggested to the provincial governments — provincial because education is a provincial responsibility — financial support mechanisms so that it is easier for students to enrol in these courses?

Mr. Prud'homme: Right now in Quebec, there is a public program that trains some 40 pilots a year. The government was not approached about it. It is important to understand that air transport is an industry that is often caught in the middle. When we talk about air transport, we are told it comes under federal jurisdiction; when we talk about training, we are told it is provincial. Depending on who we are dealing with, games can get played, unfortunately.

[English]

Senator Merchant: I want to be sure that I am asking you a question that you can deal with. You say that you represent service companies. Does that include the security sector, or are such companies not considered service- related?

Mr. Prud'homme: When we say "services," we are talking about ramp services, fuel, insurance, lawyers and engineers, but we are not talking about security.

Senator Merchant: I will not ask you anything about that, then.

You have already been asked about the competitiveness of our country for tourist dollars. I believe we have heard that Canada has fallen as a destination of choice to fifteenth place from ninth place 10 years ago. Can you tell us what can be done to make Canada a more attractive place to visit? I think some of this has to do with expensive landing fees because there is great competitiveness for tourists. I am sure every country is trying to attract tourists. Can you tell us what has to be done to improve our situation? Has hosting the Winter Olympic Games made a difference? Perhaps we have moved up a bit. Can you elaborate on that?

Mr. Prud'homme: When the country that is across the border, the United States, plays under one set of rules and Canada plays by a different set of rules, it is very hard to compete. I am not talking about regulations, but fees, cost structure and so on,

To give you an example, some people in the region of Montreal are willing to drive all the way down to Plattsburgh in the United States to take a flight instead of crossing the bridge to Montreal to fly to the same destination but sometimes at double the cost. Hopefully for us it is a new phenomenon and we do not have many people driving to the U.S. to take a flight. However, it is an issue. If we want to have a stronger industry, we need to at least adjust the cost structure to better reflect what is happening across the border.

Senator Merchant: Countries that were behind us are now ahead of us, and they are not the U.S. What are your expectations? We are listening to you and we will make recommendations. Austria, Germany, Hong Kong, Turkey, Malaysia, Ukraine have all moved ahead of us. They are not the U.S. Obviously, people are choosing to travel there. I am wondering if that has something to do with the cost of coming to Canada.

Mr. Prud'homme: As I said earlier, our association is pretty much related to regional flights and travel.

My personal opinion is that it is not because we do not have anything to offer to tourists; it is perhaps because the cost to get here is expensive. That would be my answer.

Senator Merchant: I think we agree on that.

When you talk about environmental issues and CO2 emissions, you are speaking simply about emissions from the aircraft; is that correct?

Mr. Prud'homme: No, it goes beyond that. The emissions also include the equipment at the airport. Let us say that that is a small part of the number. When we are talking about aviation, mostly it is related to the aircraft.

Senator Merchant: I understand that tarmac cement is a dirty substance to produce. You need to have not only the original tarmac, but you need to maintain it. You have given us the figure of 2 per cent CO2 emissions, but does that include the complete picture of airports or just the emissions from the aircraft?

Mr. Prud'homme: The 2 per cent is related to ongoing emissions. When you talk about environmental costs for the airport, this is included in the life cycle of the industry. We have to realize that although airports cost a lot, they cost less than roads. Over short distances, we are pretty much equal in regard to the impact of emissions. However, Canada is a country where most destinations are far apart. Over long distances, it is competitive in relation to performance.

Senator Merchant: Finally, you talked about the cirrus-type clouds produced by water vapour. You say we need to discover more effective methods of managing that. What kind of methods? Can you tell us about that?

Mr. Prud'homme: This issue is new. It arose during 9/11 when all aircraft were stuck on the ground. Most recently, people paid attention to it when an Icelandic volcano erupted and there was a flight ban in Europe. The phenomenon has a big impact. Depending on the altitude at which the aircraft are flying, they are finding that we can reduce the impact. I am not a scientist, but it has to do with air moisture and so on. If we can find a way to better manage the altitude, then we can reduce that impact. Right now, it is not taken into account because it is fairly new.

The point is that when you are addressing environmental issues, you have to take into account all parts of the industry, not just one part. That is the point I am making. Before putting forward a solution, we have to pay attention to the counter-effect that could have on another part of the industry.

Senator Frum: Is it correct that the Plattsburgh International Airport is one of your members?

Mr. Prud'homme: Yes.

Senator Frum: In light of your response to Senator Merchant, the dynamics are interesting.

Mr. Prud'homme: There are two ways of looking at it. Some people think that to solve an issue, you need to be in a closed room and talk about the problem without including the people who are concerned inside that same room. Before 2006, we were basically only a carrier association. Day in and day out we talked about our problems, but we did not hear from the people we work with. We expanded that mandate to include the airports, services, maintenance companies and the flying schools.

The reality is that Plattsburgh shares part of our Quebec market. We decided to invite them to meet with us every year. From memory — so do not quote me on the numbers — I would say that about 12 million people go through the airport at Dorval every year, and about 80,000 people go to Plattsburgh. It has an impact, but it is not like it is half of the Montreal market.

Senator Frum: What do you think their motivation is for being at the table? It is a competitive relationship.

Mr. Prud'homme: Their motivation is to meet some of the enterprises in Quebec that need space, which is an issue in Quebec. If you want to build a hangar or do maintenance services, there are not many spaces available; and they have a lot of space. They are in the association to attract small maintenance companies to go across the border and develop their installations. That is their main interest.

Senator Frum: Do you have other American organizations in your association?

Mr. Prud'homme: No.

Senator Plett: My questions were answered during the series of supplementary questions asked by my colleagues. Thank you.

Senator Kochhar: Mr. Prud'homme, you mentioned that the training of pilots costs a lot of money, which keeps many people from entering the pilot training program. Would it be prudent for the airlines to underwrite some of the cost of training with a contract, like the army does? Someone wanting to become a doctor can have tuition money from the army in exchange for signing a five-year contract to stay with the army. Would it be prudent for the airlines to run such a program?

Mr. Prud'homme: That is a good question. Most large airlines will not hire pilots when they first get their professional licence, which requires approximately 250 hours of flying time. They hire pilots with more than 2,000 to 3,000 hours of flying time, depending on the type of company. To get those hours, a new pilot has to work for small carriers. That is the challenge. Even small carriers have restrictions because of insurance policies, and they have to hire people who have experience. When these people finish their training, they have to become instructors if they want to increase their hours, or they have to work where the conditions are extremely difficult, either in the Far North or patrolling during the fire season.

As you can see, there is a need at the top of the ladder, but there is not much communication or a system to help the industry bring people in. We need to address this issue by working together, but it is pretty hard to do.

Senator Kochhar: My other question concerns the cancellation of flights, which happens more and more frequently. I am trying to understand why this happens. Is it because there are not enough passengers on a particular flight or is it because the pilot is sick and cannot be replaced? What are the main reasons for these cancellations? I am not talking about natural causes such as bad weather. I am talking about cancellation without a real excuse or cause. Can you elaborate on that, please?

Mr. Prud'homme: Yes. Recently a private bill was proposed, Bill C-310, to give rights to passengers given the increase in flight cancellations. There was a lot of publicity in the media around the issue. However, when you look at the number of complaints per year received by Transport Canada, you will see that the number has decreased in the last five years although traffic has increased.

Before we do something, we have to assess if this is a perception problem or a reality problem. Airlines do not have any interest in cancelling a flight because it disturbs the rest of the network and the schedule. When they cancel, it is because of a maintenance, safety or weather issue. Airlines know in advance how many people will be on board an aircraft. When there are not enough passengers for a flight, they cancel the flight in advance, not the day of the flight.

Senator Zimmer: Senator Kochhar touched on my question. I was Minister of National Defence for seven years in the 1970s. In the Armed Forces, there is a huge pool of talent. They join at the age of 18 and retire at the age of 45 to 50. They are looking for a second career, and many were ready and trained with thousands of flying hours. Of course, all of them wanted to fly on the toys, such as the Challengers and the Falcons. There is a huge pool of talent with many hours of flying time. Is there any possibility of cracking into that pool of trained talent that might require only a refresher course on a simulator? In that way, you would have new pilots. Is that a possibility?

Mr. Prud'homme: It is always a possibility. You have to take into account that the working conditions on small carriers are not that attractive. Flying is fun, but at the end of the day you have to make a living out of it. Some people who have an interest are die hard aviation fans who fly small carriers basically just for fun. Most pilots fly to earn a living. If we want to attract more people, we have to address the working conditions we currently offer in the market.

Senator Mercer: You mentioned the Saint-Hubert Airport and the issue of urban sprawl closing in around it. I am trying to link some of this information together.

In other parts of the country, including Quebec and my province of Nova Scotia, some airports are underutilized and in danger of closing for that reason. Do you think a business case could be made for creating major flight training schools at some of those airports? First, such an economic driver would create local employment; second, it would help with maintenance of the airport; and, third, it would remove the training of pilots from urban centres, such as Saint Hubert, to more rural areas. I believe you mentioned Chicoutimi, for example.

Mr. Prud'homme: It is Saint-Honoré. Certainly it could be looked at. The problem with that scenario is this: Who will pay for it? Most small airports on the verge of closing are managed by a city or town that does not have the resources to attract investment in facilities that would attract flying schools.

The flying schools themselves do not have the resources to close down at one place and move to another. At the end of the day, there is no guarantee that this other small airport will not face the same issue in 10 or 15 years.

For example, Saint-Hubert is a very particular airport because it has a control tower, and it is one of the only airports in Quebec where a professional pilot can train on communications. It is important for safety issues. If the industry lost this airport, the cost to safety — not the functional cost — would be very important.

Senator Mercer: You spoke about the training of many international students to become pilots. The obvious question post-9/11 is: We know that some of the 9/11 terrorists were trained in the United States to pilot planes. We heard stories at the time that they were not really interested in learning how to land because they never intended to land, as we saw. This goes to the background checks and the safety around who is being trained at the schools. Could you explain to us the security checks that do happen? Do you have an opinion as to whether those checks are rigid enough to protect us against people who are seeking this training not for positive reasons but for negative reasons?

Mr. Prud'homme: I am sorry to tell you that I do not have the technical knowledge or the expertise to answer that question. One thing I can tell you, though, is that because of 9/11, we have eliminated many points of contact that we used to have with youngsters. To give you an example, most of the pilots today have learned this dream or passion for flight by visiting a cockpit during flight, and this does not happen anymore. Many people have gone to an airport on a weekend with their parents and looked around an aircraft and kicked the tires, and this does not exist anymore. Airports are tight security areas. They are almost dangerous places, if you listen to the media. This attitude has basically created the problem that we have right now.

Although safety and security checks are important, we also have to address the need to bring the population back closer to aviation and make them feel that it is part of our social network.

[Translation]

Senator Boisvenu: Mr. Prud'homme, I have two questions for you. First, I have made a lot of trips to Europe, and one thing I am trying to understand is why the pricing structure and cost of travelling in Europe is so different from the pricing structure and costs, in Canada particularly. Do you have an explanation for this major difference?

Mr. Prud'homme: First off, there are a lot of discount airlines in Europe, which is not really the case in Canada. WestJet identifies itself as a discount airline, but when you look at the company structure, it is still the same as a standard airline. There are major differences, but the structure is still far from what we see in Europe. I think that the market is very different in Europe. We must keep in mind as well that, geographically, there are 360 degrees of destinations in Europe, unlike in Canada, where the majority of travel is done from East to West or West to East. In Europe, the volume is much higher and there are more destinations. Unfortunately, we do not have this volume in Canada to justify this pricing structure. The market is very different.

We often talk about the problem of noise in Europe. There again, when we talk about noise problems in Europe, we talk about large carriers. When we talk about the noise problem in Canada, we are usually talking about small aircraft. So, you see, sometimes these topics are similar, but the market conditions are vastly different, as is the costing structure, so it is tough to make parallels.

Senator Boisvenu: Does regulation or over-regulation play a role?

Mr. Prud'homme: We are overly regulated in Canada. Would there be a way to do better with less? Sure, but there too, there is an associated cost and resources are limited. Right now, a number of amendments to the Canadian aviation regulations have been proposed and are still pending. We have a system right now that is moving at a snail's pace, let us say. Basically, the regulations will definitely have an impact, but we must always keep in mind that they are there mainly to protect passengers. In that sense, I think that no one could be against the regulations.

Senator Boisvenu: Last question. I want to go back to recruiting and the next generation. The airline industry is more than just the transportation of goods and passengers; it is linked to tourism, commerce, business and even, at the very reaches, safety. When we talk about the workforce shortage, this could have a major impact on the Canadian or North American economy. We have spoken a lot about the problems of future personnel. For your association, where are you in terms of solutions for resolving this problem in the next two years, for example? Do you have any solutions in the works?

Mr. Prud'homme: You know, our association is a non-profit organization, so our means are limited. Before the recession, there was a shortage of pilots and, quite often, what would happen is that flights quite simply would not leave. If we want to develop the mining industry in Northern Canada, if we want to continue to showcase Canada abroad, we will need to review our costing strategy. I do not think that trucking companies have to pay for highway infrastructures, but in the case of air transport, carriers have to pay for communication in the air, for infrastructure on the ground, in addition to taxes on gas, not to mention the landing fees; it is constant. If we had to draw a parallel, we could say that, for a number of years, aviation was seen — pardon the term — as a cash cow. The reality is that the well has run dry.

Other challenges stand out for our industry and, unfortunately, to deal with them, the solution is that some carriers will have to shut down. Those that want to stay will have to boost their prices. Market forces apply here. I do not think that raising prices even more will improve the situation for the population as a whole.

Senator Boisvenu: But what I am particularly interested in is the workforce. What is the situation there?

Mr. Prud'homme: In terms of the workforce, it is not rocket science. What we are trying to do at the association is to put in place initiatives to get youngsters interested. For example, when I meet kids, I often tell them that, yes, your pilot's licence can be expensive, but it lets you work all over Canada and even abroad, which is not the case for someone who undergoes very advanced technical training, but who will not be able to get their equivalency in other provinces or overseas. This training opens the doors to the world. When we take this cost into consideration, it is a long-term vision. We realize that there is a worthwhile cost-benefit relationship. But for a 20-year-old kid without any money, it does not matter what the argument is; it is still an expense.

Senator Fox: I would like to continue a little bit with Senator Boisvenu's line of questioning about future personnel and training the workforce. We are in a situation where we are talking about shortages and, at the same time, we are talking about an available workforce, if we look at the unemployment rates. And there is obviously the terrible trend of kids dropping out of school. It seems to me that there should be some way to direct people into industries where there is a shortage, industries that offer a future.

You have also talked about the need to improve working conditions in the industry. I would like you to speak a little more about that, because there is a sector in that industry that is highly unionized. For example, if someone goes to work for Bombardier or somewhere else, this is a sector where the unions are involved in negotiating with management. Other sectors are not unionized. Are you talking about salaries and incentives?

We are talking about the debt load of Canadian students. It can be truly overwhelming. Governments should offer more assistance programs.

Could you tell me about the specific sectors where conditions should be improved?

Mr. Prud'homme: The problem that aviation is currently facing also exists in other transportation industries. Today, youngsters value family a lot, being at home, recreation. Unfortunately, our industry does not currently make room for a work/life balance. Employees are asked to be away from home for weeks at a time. So it is difficult to attract kids with these kinds of conditions.

We need to find a different way of managing our workforce. This is a new problem for us. In the past, each time there was a shortage, positions would be posted. As soon as they were posted, people would be banging down the doors of the schools to register to do their training. For several years now, we have been predicting a shortage for the start of the 21st century, as a result of pilots retiring from airlines. Unfortunately, there is no interest.

We need to deal with this problem and review the working conditions and benefits that we can offer.

Basically, the aerospace industry is unionized, as are most of the airlines. But very few small- and medium-sized companies are unionized. And even those that are offer pretty much the same conditions as those that are not.

[English]

Senator Merchant: You are lamenting the disparity between the reality of the safety of flying and the perception of it held by Canadians. Could you elaborate on why this is? Are accidents related to the condition of the aircraft, to pilot error or to weather? Could you be more specific?

Mr. Prud'homme: For the last 20 years, safety performance has improved in Canada. We are at the point when we look at accidents that it is hard to see a tendency or specific major issues that would help to improve safety. That is a challenge.

In March 2009, Transportation Safety Board brought forward three topics, I believe. One is related to aircraft collision on the ground, and another is related to the impact that landings and takeoffs have on aircraft. I do not recall the third one.

Those words can leave the impression that many accidents happen. However, the figures for 2009 show 95 commercial accidents across Canada, which includes helicopters, aircraft, flying schools, hot air balloons and so on. They include all types of aviation accidents. After carrying 101 million passengers in the year, flying is a pretty effective mode of transportation. The problem we have is about image.

To give you an example, a study was done in the U.S. showing that each aircraft accident generates 138 news stories. For every car accident, 7 news stories are generated. There is a disparity between what is happening in the sky and what the media show. We have a role to play in that regard. We have to put forward programs to show the population that we are working day in and day out on safety. We have to let people know what we are doing.

Senator Mercer: Aircraft carriers transport many people at a time and cars carry one or two people at a time. When there is an aircraft accident, it involves more fatalities.

Mr. Prud'homme: We are looking at 36 fatalities in 2009 compared to 2,500 fatalities on the road. The difference between road accidents and aircraft accidents is one of perception. When you are driving, you are under the impression that you are safe, which is not the case.

Senator Merchant: That is because you are in control.

Mr. Prud'homme: You are in control, but that does not mean you are safe. When you are flying, you are not seeing who is in control of the aircraft. That is a perception issue, and we have to work on that.

Senator Merchant: Is weather in Canada a problem for us?

Mr. Prud'homme: Weather is always an issue because we see almost every weather condition imaginable. In our view, pilots who have gained their experience in Canada are very qualified to fly in Canadian weather, compared to those from other countries. It is an issue, but it is taken care of.

Senator Plett: My question is supplementary to those of Senator Fox. You talked about the high cost of becoming a professional or commercial pilot, which I understand. I earned my private pilot's licence in 1975. Back then, it cost me $5,000. It is an exorbitant cost and commitment for a young person.

Many trades have apprenticeship programs during which people can draw on Employment Insurance. Is there anything like that in the airline industry? Should there be such a program? Should the airline industry come together and offer some form of apprenticeship program where people can qualify for a subsidy? University students receive subsidies all the time. Should we have something comparable in the airline industry whereby these people can at least receive unemployment benefits while they train? They might be able to do it more quickly than they do now. Has any consideration been given to something like that?

Mr. Prud'homme: I would say that all of those things could be done. There could be a fiscal advantage for a young student who, when he gets a job in the industry, gets some relief for the first five years. A lot of programs could be put forward.

As I said in my presentation, we need leadership and resources in order to develop something like that. Right now, when we address those issues with authorities, we find that everyone is cutting back on expenses. We have a short-term answer to a long-term problem. It is a very sad story.

Senator Plett: I agree that everyone is reducing expenses. The recession has not helped. You talked about being short 2,000 airline pilots every year, so it would make sense for the larger airline carriers to get together and run a program. In that program, they might have some kind of exchange contract for the early stages of a person's training such that the individual would work for the carrier for a certain number of years in exchange for compensation for costs incurred in the program. That would seem to be good business practice.

Mr. Prud'homme: It would be good practice if there were not such a huge gap between entry-level jobs in the industry and the airlines. The airlines do not have the resources to put forward such a program.

For example, some of the new economies have put forward different programs. Airlines are hiring people from scratch and training them to become co-pilots only on a specific type of aircraft. If that co-pilot goes outside the airline, they cannot fly another type of aircraft. It is something quite different. They had to do that because of a shortage in experience in civil aviation, so they did not have a choice.

We have to ask whether this is the road we want to travel — become a co-pilot for one airline or go through the system to become a top-level pilot, either a co-pilot or a captain. That is a question we have to ask ourselves.

Senator Plett: Having flown a lot, and having good friends who are either co-pilots or pilots, I would prefer to have a person in the right seat who is also be capable of landing the airplane. I would not encourage that.

Mr. Prud'homme: That is my belief also.

Senator Zimmer: I have to ask this question. It is a continuation of Senator Mercer's question about 9/11 and the terrorists who were trained in Florida by that company. It is one thing to deal with the terrorists, but was that company every dealt with? Come on — they wanted to learn how to just fly an aircraft, not land or takeoff? It would not take a rocket scientist to figure out what they were up to. Do you know if U.S. aviation ever dealt with that company as far as allowing them to do that? I am positive there were brown envelopes with cash in them. Did you ever hear anything about the result?

Mr. Prud'homme: No. I can tell you, though, that 9/11 was something completely new. It is easy to look back and say, "Well, they should have done this or that," but, in retrospect, nobody ever thought about that. That is a major issue.

Right now, we are doing day-to-day things that in many years will be looked at and maybe they will say, "These guys were crazy. They all had cellphones and they did not know they were getting something." We have to look back. Prior to 9/11, people did not think about that.

In some of the flying schools, we have seen people who had strange interests, and the information was passed on to the authorities. In most cases, it was based on nothing, just perception, but safety and security are major concerns.

[Translation]

The Chair: Thank you, Mr. Prud'homme. Your presentation was most appreciated. As our study progresses, we are discovering new elements. Today, you have opened our eyes to the issue of the workforce, which had not been raised before now. In due course, we will tighten up our study. We thank you for bringing our attention to this extremely important topic.

[English]

Tomorrow we will be meeting at 6:45 to hear from the Tourism Industry Association of Canada. Questions were raised again this morning on the promotion of tourism in Canada and its relationship with aviation.

(The committee adjourned.)