As published in the Financial Post
Media continue to use the word “bailout” to describe what airlines in Canada are seeking in the face of this pandemic. It brings back unhappy echoes of grants and loans to the failing U.S. automotive industry following the global financial crisis. Unlike in those times, however, no government ever told them to stop making cars. That is essentially what this country’s airlines have been told as we continue to adhere to border closures and travel advisories.
As we look to get Canadians moving once again, we are recommending the government keep things simple. Any federal support needs to be sector-wide with a focus on safety, sustainability and stimulation. Safety through initiatives such as airport testing for COVID-19 that needs to be government-led. Sustainability through a recognition by the government that many airlines, including WestJet, are spending billions in green initiatives and fuel-efficient fleet renewal, which should be taken into account.
This type of approach toward assistance will have a stimulative effect on the economy. By following these simple guidelines, the government can ensure every Canadian benefits from its response.
The current situation is doing the precise opposite. Supply-chain partners like some airports and NAV Canada, the country’s air traffic control operator, are taking a counterproductive approach to the pandemic, including double-digit price increases passed on to a travelling public that can ill afford these hikes. A family of four, travelling domestically, could see increases to their overall travel costs of more than $150 through third-party fees.
The aviation industry is a major driver of any country’s economy. In Canada, it contributes more than $63 billion to GDP, with 633,000 jobs connected to aviation. Price increases will not get our economy moving. Sector-specific support from the government that doesn’t put higher costs on the backs of the travelling public will.
WestJet recently became the first national airline in Canada to begin providing refunds across all fare classes, including non-refundable tickets, for those guests whose flights we were forced to cancel. We did this proactively, and despite a lack of government support. Where there have been refunds in other countries when airlines have cancelled the flights, there has been sector-specific support from governments that recognize the vital role their airlines play in their respective economies.
It has been more than eight months since the onset of the pandemic in Canada. Eight months of major job losses, fleet groundings and gains for foreign carriers at the expense of Canadian national interests. We have a clear plan based on safety, sector reform and sustainability. It is time for the government to lead the industry in leading economic recovery.