Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 8 - Evidence, February 2, 2011
OTTAWA, Wednesday, February 2, 2011
The Standing Senate Committee on Transport and Communications met this day at
6:47 p.m. to study emerging issues related to the Canadian airline industry.
Senator Dennis Dawson (Chair) in the chair.
Senator Dawson: This evening, we are continuing our study on the
emerging issues related to the Canadian airline industry. Appearing before us,
on behalf of the British Columbia Aviation Council, is the director, Jamie
Jamie Molloy, Director, British Columbia Aviation Council: I would
like to give you a brief overview of aviation in the province of British
Columbia. We will start with some of the high-level aspects and then come down
to the lower- level aspects as far as the float planes and VFR carriers are
Over the last year, aviation activities in British Columbia and throughout
the province have decreased since the post-Olympics tourism bubble has moved on.
During the Olympic Games, we felt an increase in the tourism market and that
aided in keeping us economically stable throughout the downturn that was felt
through the rest of the country.
We are still feeling the effects of the economic slowdown in the province of
British Columbia. The 2010 Olympic Games created a large tourism component and
from that we were able to do marketing to try to entice people back to the
province. It is working slowly, but it is taking longer than many analysts
This tourism affects all levels of aviation, from both the high-level
carriers and airports such as Air Canada and Vancouver International Airport,
YVR, right down to the small-level float plane operators and helicopter charter
companies that do heli-skiing and service in Vancouver, Vancouver Island and up
to the coastline.
On the high-level aspect, there are major factors affecting the growth of
aviation in the province. When I speak of "high level," I speak of the Air
Canada's, the foreign carriers, and the WestJet's of the world.
One of the largest factors affecting us is route and availability of those
routes. The 2010 World Route Development Forum was recently held in Vancouver.
That conference left a lasting impression on Vancouver and on the aviation
industry. Many aspects pertain to availability of foreign carriers to access
routes and landing clearances in Canada, specifically YVR.
For example, a long-haul international flight that lands into YVR generates
between $5 million to $8 million in revenue for wages and contributes $8 million
to $15 million of annual GDP for the province. This is a tremendous influx of
economic activity for the province.
Another aspect is the airport taxes component. In Canada, we have a problem
in the sense that airports are still being taxed at market-value rates. Being in
competition with airports in the U.S.A., this is an issue. If you are arriving
internationally, say from Heathrow, it would be cheaper to fly to Seattle than
to Vancouver. This is another issue of competition that keeps us in a bit of a
Moving down to the lower level, the helicopter, as well as the VFR float
plane world, there are a number of different challenges. You probably know that
over the past six to eight months we had a number of high-profile accidents in
that area. We have done a lot of work to improve safety. We started up a float
plane association that deals with safety concerns within the industry, and we
are taking greater strides than are actually regulated in order to create a
One of the biggest issues is the closing of lighthouses through the
Department of Fisheries and Oceans. We recently met with the Senate committee
with regard to this issue, and we achieved at least a stay of execution for the
lighthouses. We are not sure if this is permanent, but at least it gives us an
opportunity for dialogue.
Another aspect that affects that sector of the industry is weather reporting.
Weather reporting is spotty on the coast. The weather changes multiple times a
day, and these flights are susceptible to poor weather conditions in the area.
The tourism component affects this sector of the industry. The Olympic Games
were both a help and a hindrance, due to security restraints.
With regard to some of the other concerns of this industry, specifically in
the Vancouver region, there is a local group that has a float plane association.
They feel that they are being pushed out of the local Vancouver region, so they
are trying to lobby the city and the province, as well as the federal
government, to look at a not-for-profit float plane multi-user facility in
These are some of the major issues affecting us in the province, and these
are issues that the British Columbia Aviation Council will advise on and act on,
on behalf of our members.
The Chair: Thank you, Mr. Molloy. As far as the weather is concerned,
some of the senators were asking if our witness could appear before us. If you
had been from anywhere from Central to Eastern Canada, you could not have flown
in this evening. Having you appear via teleconference solved our problems for
Senator Mercer: Mr. Molloy, thank you for appearing before our
committee. You talked about landing rights and the economic spinoff of landing
rights. I think you said the economic impact of long-haul landing rights is $5
million to $8 million.
We recently had the issue of the government denying the United Arab Emirates
airlines extra landing rights in Canada. Was Vancouver on the list of the UAE's
requests for landing? If so, has the British Columbia Aviation Council made
representations to the government to ask them to overturn that decision?
Mr. Molloy: That is a very good question. At this point, I do not have
all the information; however, I am pretty sure that Vancouver International
Airport was on that list.
There has been advocacy from both sides on this issue. Vancouver
International Airport has done a tremendous amount of advocacy on this issue.
The British Columbia Aviation Council had a conference in late October and into
November that was based on all these issues. It was based on economic growth and
using Vancouver and British Columbia as the gateway. We had many speakers come
in, including people from Ottawa, to talk about these issues. We are continuing
to push this issue.
The other association that is working on this is the Air Transport
Association of Canada, ATAC. Obviously, there has been some pushback from
national carriers, Air Canada and WestJet, and they have concerns about bringing
in foreign carriers.
Senator Mercer: Mr. Molloy, it is interesting that we are having a
discussion about lighthouses when we are talking about the airline industry. I
assume we are talking about lighthouses because of the float plane market in
Vancouver and Victoria.
Mr. Molloy: Yes. I can give you a bit more information on that
subject. Lighthouses play a key role for both the helicopter and the float plane
community along the West Coast, which goes all the way from Victoria in the
southern part, all the way up to the Queen Charlotte Islands, Haida Gwaii, and
farther north. Without those lighthouses and manned stations, we leave it up to
an automated system, which does not have strong maintenance records. If a
lighthouse goes down, it might not be fixed for months on end. This poses a huge
safety concern for those operators and for the general public.
Senator Plett: Mr. Molloy, we are all familiar with the previous
demographic studies that reminded us of the pending retirement bulge and its
effects on Canada and the Canadian labour market. With these forecasted
retirements fast becoming a reality, what initiatives are in place to recruit
young people into the aviation industry?
Mr. Molloy: That is another great question. The retirement bulge is
having an effect. For the British Columbia Institute of Technology and other
vocational schools that have aviation programs, their recruitment rate has
decreased in many of these fields since the economic downturn. In discussing
this issue with members, obviously cost is still an issue for many young people
who are considering becoming involved in aviation. As well, nationally, as an
industry, we still do not have a comprehensive program. Once a person gets into
the aviation industry, whether as a pilot or as a maintenance engineer, their
first jobs are usually ones that hardly pay their rent, let alone pay off any of
the bills they have incurred to obtain this training. Working conditions are
usually poor to extremely poor. As other jobs offer much higher starting wages,
recruitment is a challenge.
Senator Plett: I appreciate what you are saying; however, aside from
possibly the oil and gas industry, where it seems that people can start making
$20, $25 or $30 an hour, the aviation industry would not be much different in
that regard from other trades, most construction trades, if you will, would it?
Becoming a lawyer or a doctor, et cetera, would pose the same problems as your
industry, I assume.
Before you answer, I will follow up with two related questions. I would like
you to speak a little more to my first question, but where do you see growth
opportunities in B.C.'s aviation sector, and what do you see as the greatest
challenges to that growth?
Mr. Molloy: With respect to the retirement component, if we look at
retirement alone without actually looking at the recruitment side of the
equation, we have a problem. With the larger carriers, such as Air Canada — the
705's is what we call them in the Canadian Aviation Regulations — with respect
to a recruitment program; there is a well entrenched co-pilots program that
graduates these people who then become captains. Retirement age and things like
that usually keep that fairly static. The current job market is fairly flat to
weak in that range. Many pilots who have the qualifications and who may have
been laid off during the economic downturn are now seeking employment overseas
or in the U.S.
If we look at the lower sectors, where you would find float planes and
helicopter activity, that industry is not necessarily educating and bringing
people up through the ranks. It is a much more challenging industry from the
point of view of a teaching environment and access to simulators, so the
economics of it are usually left to the experience within the individual.
Therefore, it is up to the companies to actually foster that education and keep
people coming up. Most of our schools are not focusing on that region either, so
that is a major weakness moving forward as a province and as a country.
Answering the second part of your question as to where the growth
opportunities are, I just mentioned one with this opportunity to grow that
sector of the industry as well as the training component. With respect to some
of the other aspects within British Columbia, we still have untapped resources
from exploration to our tourism component. I think by marketing and creating an
opportunity for companies in the free market economy to market to the foreign
carriers, we will see those tourism dollars come back and we will see that
growth opportunity in that area.
Senator Plett: Only pilots have a mandatory retirement age. Is that
Mr. Molloy: It is company-based, and I think that is one of the issues
that Air Canada is in negotiations with respect to their pilots union. I am not
sure if it applies to their maintenance employees as well, but I am pretty sure
it is company-specific.
Senator Plett: Other Canadian airlines do not have mandatory
retirements. Is that right?
Mr. Molloy: Not that I am aware of. That was a legacy issue through
Senator Plett: Thank you very much.
Senator Martin: It is nice to see someone from home. I am a
Vancouverite and it is very cold here in Ottawa. Thank you for your
I will speak to some of the questions and topics that have been covered. I am
curious about the flight industry attracting young people to the profession.
There is a bit of a myth about the requirements. I know students do not think
about that industry as much as something that seems a bit glamorized through
media. Students do not necessarily think of pursuing a career in the aviation
industry. I agree that better marketing of the courses and career choice is
important. You discussed that with Senator Plett.
My question goes back to another topic on economic impact. You spoke about
the tourism industry and how it is directly linked to the success of your
business and your members. Would you speak a little bit about what your
organization and members are saying about increasing the Blue Sky agreements and
how they will affect our industry? How will the Open Skies relationships affect
Mr. Molloy: We are advocating for bilateral agreements, obviously,
looking at being able to have a fair playing field for both sides as well as the
Open Skies issues and asking, "Where is this applicable?" When this comes into
place, what are the options that will be available to the people of British
Columbia and to the travelling public? As I mentioned, certain individuals
within the airline industry will advocate for this and certain individuals will
advocate against this.
As far as what the role of the British Columbia Aviation Council is, we play
a fairly neutral role, mainly just stating both sides of the issue and trying to
keep the discussion going. It is one thing that we feel should not get pushed
aside as a back-burner issue; it is key to the economic development of this
province and of this country.
Senator Martin: I agree that improving or increasing tourism would
really benefit various sectors. Would you highlight the priorities in terms of
what we could do to stimulate tourism, especially at a time when we are coming
out of a recession and we are trying to attract more people to Canada?
Mr. Molloy: Yes. If we looked at the fee structure that airports pay
throughout the country, what tends to happen is that the airport is in
competition with YVR in Seattle; the costs the airport is paying are more in
Canada for land use and all other associated services. That cost is pushed onto
the aircraft carrier, the operator, and then transferred to the passenger. I
refer to my example of it being cheaper to fly into Seattle rather than
Vancouver, while still travelling the same distance. If you do a search, you
will find that the flight will stop in Vancouver and then go to Seattle, so it
is actually a longer distance flight, yet it is cheaper. This is mainly due to
those differences in taxes. I
We would like to see the airports carry less of a burden and pass those
savings on to the travellers. Another option is a rebate program for visitors to
The other aspect that really comes into play is when you look at the cruise
ship market. If you look at a graph that goes back to the 1980s and 1990s, you
would see Vancouver being a tremendous cruise ship terminal in comparison with
Seattle or anywhere else along the West Coast. Seattle has done a tremendous
amount of increased infrastructure construction of their seaport and cruise ship
terminal, and associated with that are the cheaper flights. Presently, people
would prefer to leave out of Seattle rather than out of Vancouver. If we look at
our cruise ship market, we have seen a dramatic decrease over that time frame.
Senator Martin: You answered my final question when you mentioned
Seattle. I was intending to ask about the competition south and how that affects
your industry and your members.
Mr. Molloy: We work well with Seattle, but they are a large component
of competition. At our recent British Columbia Aviation Council conference, we
had a number of people from the Cascadia group, which is a group that looks at
tourism across the larger region of both Seattle into British Columbia. We have
a number of rail initiative partnerships with Amtrak and we are keeping those
supply chains open to bring tourism to Vancouver and vice versa down to Seattle.
One of the hardest things is the fact that the cost of it is higher for
passengers to leave from Vancouver, so the draw is to go to Seattle.
Unfortunately, the dollars will speak and they will also walk down the street.
Senator Fox: Mr. Molloy, my first question deals with an issue I have
only just heard raised for the first time during these hearings, and the second
concerns the question of competitiveness of airports.
First, you mentioned a problem with weather services in British Columbia. I
am surprised; I would have thought we had excellent weather services from coast
to coast in this country. Is any difference between the weather services
available to airlines going into Seattle compared to airlines going into
Vancouver? Is this problem larger than Vancouver International Airport? How do
we solve it?
Mr. Molloy: This problem would refer mainly to the smaller float
planes and helicopter activity, which is what you would consider as visual
flight traffic or visual flight rules; they are flying under VFR conditions.
These aircraft are extremely susceptible to weather and changing weather
conditions. The larger carriers are not as affected by these weather conditions.
YVR in particular has done a large improvement on their de-icing facilities.
Senator Fox: Does Seattle have the same kind of problems?
Mr. Molloy: No, the FAA controls almost the entire supply chain and
therefore, weather reporting is a function of the FAA. The FAA has a tremendous
budget for weather reporting. As a float plane pilot myself and as a previous
float plane operator, if we had to go into those areas, we would use a lot of
their weather systems in order to get a better picture of even the weather en
route to, say, Victoria from Vancouver.
If we look at a macro picture of the province and where we have reporting
stations, there are quite a few of them that give aviation-grade weather on an
hourly basis. However, the problem is that the weather can change four to five
times within that hour. We are working on that problem.
As far as the British Columbia Aviation Council is concerned, we are actively
in discussions with NAV CANADA in order to increase that weather reporting. Some
of the new technologies that have come out with webcams and weather stations can
help in that, but there definitely needs to be a further push.
I can point to probably three Transportation Safety Board of Canada reports
from fatal accidents along the West Coast that are directly related to weather
issues and the lack thereof.
Senator Fox: Thank you. Second, we run into the competitiveness of
airports pretty much across the country because many of our major airports are
close to the U.S. border, but perhaps more so in Vancouver because Seattle is
indeed a major city. In Montreal, the closest U.S. airport is Plattsburgh,
though even the smaller town and airport can still have annoyance value to the
Has anyone done any studies as to what it would take to make Vancouver
International Airport competitive with Seattle; what would it take in terms of
dollars and who would be called upon to pay the cost at the end of the day?
Mr. Molloy: That is a good question. The YVR, the airport authority,
has done an economic assessment study. They have looked at this throughout their
routes conference. They have used InterVISTAS Consulting Group, which does a lot
of airport and airline consulting around the world. They have those numbers and
although I do not have them in front of me, I can get those reports for the
The Chair: Thank you, Mr. Molloy. We would appreciate it if you would
give those reports to the clerk of the committee.
Senator Zimmer: Thank you for your presentation. The Canadian air
industry pays a lot of fees — fuel taxes, airport rent and security fees. They
are sometimes almost double the economy flight. We were at the airport yesterday
and they used the analogy "necessary and nice." It is nice to build modern
airports that are modelled to the world, but sometimes they turn into Taj Mahals
and become very competitive.
Do we need this level of fees to provide the necessary — not nice, but
necessary — infrastructure to build new airports or to bleed the customers?
Apparently, it reaches over $1.2 billion. Are they fair fees are they needed and
are they necessary, at that level?
Mr. Molloy: That is a very good question. With respect to fees, there
seems to be someone putting their hand in your pocket when you go to the
airport. I completely agree with you on that. This issue is very true in British
Columbia. When you depart from some airports, you are paying quite a large fee.
The other aspect is the security component. Sometimes the fee for that
airport improvement is to do with security. That is another issue that I can
probably discuss, as well, but it does play into this.
As far as the Taj Mahal effect of the airports, I feel that if we are trying
to attract international tourism and trying to attract these individuals to come
to Canada and to our provinces, certain amenities will be required. I believe
the customer would pay for that. In some respects, though, there is no option
given to the operator on these fee structures, whether the fee is completely
charged to the customer or what that fee is. Going back to what you said, there
is no detailed breakdown of what that fee actually buys.
There is a struggle going on in Vancouver Harbour based on this exact issue
and model for the float plane operators in the local area. A developer is
building a terminal and that fee will almost be a quarter of what a one-way
ticket would be, from a percentage point of view.
To answer your question, higher fees are something passengers do not want and
there ought to be a way to put more transparency on those fees by breaking them
out and having the travelling public decide on what they are willing to spend.
Going back to security, we need to look at what our ceiling is for security
on some of these fees, and what component the airport picks up and what
component is paid by the federal government.
Senator Zimmer: I think transparency is good because maybe they are
not charging enough. I do not believe that, but at least they should be
transparent. No one knows where they spend it and on what.
It is very fortuitous that you are here tonight. Last night a friend called
me and he lost his luggage. They have not found it and it has been weeks. On
page 3,951, it says the limit is $250. That barely buys you a pair of shoes
these days. Does he have any recourse to go back to the airline or is he nailed
by the policy that says the limit is $250? I know it is a legal question, but
have you ever had this experience before where they produce receipts for the
clothing that was lost, yet the policy says the body part is covered because it
Mr. Molloy: Lost luggage is, unfortunately, a side effect or a
component of the aviation industry. If their reimbursement cost is specified, I
am not a lawyer but I would think they would stay with the written
specification. However, the aviation industry is very susceptible and is in a
fragile state with respect to tourism, and travellers have many choices on which
airline to chose.
I would probably recommend that the individual speak with the airline and try
to get as much as possible for that missing luggage. Many airlines — and there
are many precedents for this — out of goodwill, even though their policy may say
"X, " if it is truly their fault, a large amount of time has lapsed and things
like that, would definitely reimburse the passenger for his or her loss.
Senator MacDonald: To follow up on Senator Zimmer, in September of
2008, the Government of Canada announced the Flight Rights Canada program to
strengthen passenger protection under the Canada Transportation Act. Do you have
any synopsis, analysis or observations on how successful that new program has
been to date? Has it had any impact at all?
Mr. Molloy: I am not familiar with the particulars of that program,
but either the airport or the airline operator, depending on where in the chain
it gets lost, typically handles the lost luggage. That is where the applicable
tariff would apply, if it is an airport component or if it is the air carrier. I
am not briefed on that particular policy.
Senator MacDonald: You are not familiar with this new program or if it
has any impact at all?
Mr. Molloy: I am not familiar with it.
Senator Plett: We have over the last 30 years or so primarily had two
air carriers in Canada. For a number of years it was Air Canada and Canadian
Pacific. Now we have Air Canada and WestJet, with Porter Airlines doing some
flying, but certainly at a smaller level. It seems that over the years, Air
Canada at least has struggled financially and has occasionally even received
assistance from the government.
In your opinion, is there room for more domestic carriers to fly across the
country? Is there room for another major airline to come into our domestic
Mr. Molloy: The short answer is yes, there is definitely room. If we
look to the North, we see a number of different airlines that are doing quite
well, such as Air North, but these airlines service the North and service it
quite well. They have equipped aircraft that can go into these rugged areas —
737s, 757s and Dash 8s — and bring service to the North. There is definitely
opportunity for more aircraft and more choice for aviation across the country.
If we look at some of these airlines and how in particular they have worked
in the North without having a price point so outrageous that no one will ever be
able to afford, some of those airlines are community-based and community-owned.
They are owned by the province and run that way in order to try to keep that
As far as looking at the lower component of the nation and seeing
point-to-point travel nationally across the country, again, it is an option to
have a third carrier, a third option. The challenge again comes in with the high
barrier to entry, the high price point to secure gate times, to secure any kind
of scheduling, and the infrastructure involved in setting up that type of an
entity. Throughout time, we have seen that happen. Harmony Airways started as a
charter that started doing more scheduled service, and tried to do a premium
service. You mentioned Porter, which is doing a fairly good job out of the
Toronto area. On the West Coast, for example, we have Air Canada, Jazz, Central
Mountain Air and Pacific Coastal, but they do not go across the country with
respect to a national carrier.
Senator Plett: You mentioned Jazz, which is owned by Air Canada. Air
Canada does not fly where Jazz does and Jazz does not fly where Air Canada
flies. Porter is certainly in direct competition, I would suggest, with WestJet
and Air Canada. You mentioned Air North and the companies flying there. We have
other regional carriers, Bearskin Airlines in Ontario and Perimeter in Manitoba
and I am sure other provinces. They all fly with virtually no competition. Air
North and First Air fly up North and they charge whatever they want because
there is no competition.
My question is more in an area where they would be competitive. Porter is
doing that. WestJet and Air Canada run in direct competition. The other ones do
not have any competition.
Are WestJet and Air Canada servicing our country in the competitive market
well enough, or would they simply run a third airline out of business, as Air
Canada has been known to do?
Mr. Molloy: I do not think they would. Even Jazz competes with Air
Canada in certain regions. They are just looking at a 757 contract. There is
definitely room for that competition. It really comes down to the traveller, and
the thing that we have lost a lot in the aviation industry, which is the
customer service component, and let the customer decide with whom they will fly.
That experience component is something we have lost over time with the aviation
Senator Housakos: Mr. Molloy, your response, curiously enough, is that
there is room for another national air carrier. Other witnesses have made the
same reply to that question. Having said that, if we look at the last two
decades in Canada, the two national carriers that we have had always seem to
have a hard time getting their bottom line to a point where they are profitable,
be it Air Canada, WestJet, et cetera.
In the same breath, if we do a comparative study of Canadian pricing,
national carrier pricing vis-à-vis the pricing of American carriers, the
American customer seems to be getting a lot bigger bang for his or her dollar
compared to Canadians.
We have heard that airport taxes, airport fees and security fees are a big
reason for the additional costs, but I still cannot get my head around seeing
where there is a 50 per cent or 60 per cent or 70 per cent higher cost of
travelling in Canada compared to the United States. I do not see how you can
respond to Senator Plett's question about there being room for another national
carrier where we have clearly seen for the last couple of decades that the two
national carriers we have had at any given time have had a hard time making ends
meet. When we do a comparative with the U.S. market, we do not seem to be giving
Canadians the same pricing benefits Americans receive.
Mr. Molloy: I think you are right. The U.S. carrier and the U.S.
passenger are better served for where they are going. The volume of people,
though, that the airlines have to draw on is far superior. That is one of the
issues there, where the volume discount can really come into play.
I think I mentioned earlier in my discussion a briefing about the Canadian
airports versus the U.S. airports. One of things, if we look at the two
airlines, the legacy carriers we have, WestJet and Air Canada, both struggled
throughout time and struggled to get to the point where they are today. Coming
into the marketplace as a new start-up airline would be challenging with the
current airport fee structures, without some kind of a different program in
order to get to that initial set-up to have a clientele base that would use you
If we look at the nature in which an airline starts, it would typically start
from a smaller carrier base and then grow over time to be a national carrier,
such as what WestJet did, starting primarily with a West Coast service and then
gradually moving across the country in a staggered approach.
With the economic forecast, I do not know if an air carrier would be keen to
do that at this point, but I think there is an opportunity to have a third
carrier in the country.
Senator Housakos: My next question is deals with the fact that we have
26 designated national airports in Canada. I would like your thoughts on that.
What is the benefit to having 26 national designated airports? Is there a
benefit to maybe streamlining that to have fewer international airports and
putting a system into place that would be more cohesive and comparative to what
is going on in Europe and other places in the world?
Mr. Molloy: Having the 26 international airports does service the
people of those regions, based on charter flights and whether we look at any
kind of open skies or blue skies policies. One thing that does happen is the
airport system is typically the hub and spoke model where, if we use that and we
build another hub, such as an international airport, then we will create that
growth to having the spokes that the regional feeders will then come into. That
is typically the model that the airport growth uses.
I do believe that the airports that are servicing international flights
should be maintained, and perhaps that we look at other possibilities for
further growth there, in the airport, for international activity.
Senator Zimmer: As a follow-up to the senator's question, Canada has
negotiated a number of Open Skies agreements, and the most important are with
the European Union and the United States. How effective have these agreements
been in benefiting Canadian airline companies and their travellers? Should these
agreements be expanded to allow for cabotage?
Mr. Molloy: To clarify, are you asking how effective it has been for
the Canadian airline companies or the Canadian public in general?
Senator Zimmer: Both.
Mr. Molloy: I will start with the first component of the question, and
then deal with the cabotage issue second.
As far as how effective it has been, I think, as we proceed and keep going,
we see, for example, that Air France is getting more access to the country. They
were originally only given two spots to fly into, and they chose those two to be
Montreal and Toronto, which makes sense if you are Air France. Now they have
been given more options throughout the country, and they will be starting a
Vancouver service shortly.
That will be a tremendous increase of options for both people coming from
France, and those going from Vancouver over to Europe. That is something we have
not seen before on the West Coast.
As far as the Open Skies agreement, it does add that competitive component to
the region in which that the airline would land.
Also, from the public's point of view, it would definitely increase the
options that they have available. Again, letting that fair market and open
market practice proceed, it would then lower the prices the competition would
have and create a competitive dynamic.
As far as the cabotage component is concerned, U.S. carriers are run
specifically on the smaller scale. Cabotage definitely affects a number of
Canadian operators flying into the U.S., and also definitely limits the number
of flights that Canadian operators would do to the U.S., based on the threat and
issues surrounding cabotage. We must deal with this issue and any Blue Skies and
Open Skies discussions should include that issue. We must discuss how that
system would be better translated down through all levels of governments,
specifically in the U.S.
Senator Zimmer: What about increasing the Open Skies agreement with
Arab states like Dubai, Abu Dhabi and Morocco.
Mr. Molloy: As far as the Open Skies going into some of the other
states with United Emirates and other carriers, there are definitely some
concerns from the Canadian aviation industry around jobs within Canada and price
wars that could possibly happen, but there is also a tremendous advantage to the
We have to look at that and try to find a way to manage that successfully. We
could look to the model, perhaps, that Pearson International Airport has had in
Toronto and see what else we can offer to increase economic growth while
maintaining our carriers' confidence that pricing and job security will still be
there. That is a factor of our global aviation economy.
If we look at where the resources and the tourism dollars are now positioned
around the world, we must set our country up to be proactive in attracting those
Without Open Skies, I do not see us doing that. That was a major component of
our conference last fall. I can give you some more backup information that would
support those discussions.
Senator Zimmer: Thank you.
Senator Martin: Could you speak a bit about the recreational aspect of
the aviation industry? My husband is a biker, and I know in Langley there is a
school. I have seen a trend where many of his friends and colleagues get their
licences. There are many things that happen with that.
I have also known of some of the same people getting their licences to fly
recreationally. Is that a part of the industry that you are building? What are
some plans for the future? I see a market for that, and a very interesting
possibility to generate more business.
Mr. Molloy: That is a very good question and a very important
component of the industry. I started my flying career as a recreational pilot. I
got my ultralight pilot's licence when I was 13 years old. I used to take the
bus to and from the airport to take my flying lessons because I was not old
enough to drive a car.
The recreational component of aviation is alive in Canada. I do not think it
is doing that well; it could use some help. When I first started flying, there
were different fly-ins. Local flying clubs and local airports would do things to
try to stimulate people to come out and have a burger and fly in and see the
facility. Many airports have experienced a brain drain, or a retirement drain,
and we do not have new people taking up the torch in many of the smaller
communities to stimulate that growth.
Incentives for airports and smaller municipal airports would be helpful, as
would increasing the awareness of those programs to local municipalities, such
as business associations, et cetera. A number of different opportunities could
really help those communities to bring in awareness.
Simply because an airport is small does not necessarily mean there are only
small dollars coming in. A number of people who fly across the country
recreationally will do it for business and they will commute daily by airplane
from Calgary to Vancouver. They will fly into a small municipal airport and be
quite unassuming but generate a good economic footprint in that community.
I think stimulating and supporting recreational flying within the local
communities could really help both factors. It would aid in economic
development, and a component of those people who would get into recreational
flying would continue to support the aviation industry. We should do this as we
move through the retirement bubble. If there is any way, we can do that from an
incentive point of view for communities that would be a recommendation.
The Chair: As you can see by the level of questioning, there is a
strong interest in this subject.
I will remind the audience that before us on behalf of the British Columbia
Aviation Council is Director, Mr. Jamie Molloy. Thank you very much.
Colleagues, we will be meeting next Tuesday morning at 9:30 at which time, we
will hear from representatives from the small national airports system.