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 Molloy.

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 concerned.

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 expected.

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 deficiency.

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 safer environment.

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 Vancouver Harbour.

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 attendance tonight.

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 correct?

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 Air Canada.

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 presentation.

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 our industry?

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 province.

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 Montreal airport.

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 committee.

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 says $250?

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 market?

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 service there.

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 industry.

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 reliably.

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 Canadian public.

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 dollars.

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.

(The committee adjourned.)