Government Action Needed To Dampen Long-Term Sting Of Regional Air Service Cuts

  • National Newswatch

With Air Canada forecasting in July it would continue burning through cash reserves at the rate of between $15 and $ 17 million per day if its medium-term outlook did not improve, the decision, announced December 8, that it was planning additional cuts to air service in Atlantic Canada was predictable.The real surprise was not Air Canada's announcement, but that the federal government would continue sitting on its hands, as it has since the start of the pandemic, while regional air service is slashed.And while these latest cuts placed a spotlight on Atlantic Canada communities and their airports, this is not an Atlantic Canada issue, it is a national issue.  If left unaddressed, the sting of air service cuts will linger painfully for months after the coronavirus vaccine starts kindling a return to economic and social normalcy in Canada's largest urban centres.Whether it be northern Ontario and Quebec, the interior of British Columbia, or Atlantic Canada, if not addressed quickly, the economic and social fallout from cuts to regional air service will cast a dark cloud on the prospects of a speedy post-pandemic recovery in those regions.The reasons for this are rooted in the economic, operational and competitive reality of commercial aviation.First, regional routes are generally less profitable than long haul domestic or international flights because carriers' fixed costs are amortized over a smaller number of passengers per mile than on long haul flights that use larger and more fuel-efficient aircraft.Second, Canada's domestic industry is currently operating at a fraction of its normal capacity.  It will take time – months, if not longer — before it is back to full strength.Getting airline capacity back to where it was a year ago will mean bringing back thousands of furloughed employees and dozens of planes that were grounded in the wake of the pandemic.Many airline employees such as pilots, will need to be recertified, others will require additional training to deal with things such as health and safety policies introduced after their layoff.  This will take time.Then there's the matter of bringing the fleet back online.  You don't just take a $ 150 million aircraft that's been sitting on blocks for a few months, taxi to the gate and say welcome aboard.Planes that have been sitting idle for any length of time will need to undergo nose-to-tail inspections that can each take days and cost hundreds of thousands of dollars before they're deemed airworthy again. This too takes time.Finally, while our domestic carriers will be busy gearing up for the anticipated uptick in domestic economic activity and travel next fall, they will also need to be mindful of competition from foreign carriers – including US carriers.According to the International Air Transport Association (IATA) foreign carriers have received over $ 170 billion in government assistance since the outbreak of the pandemic.This massive government assistance gives foreign carriers an immediate capacity advantage over Canadian carriers and an enhanced ability to cherry-pick the Canadian marketplace once the time is right.But what does this mean for regional air transportation?In the absence of mitigating measures from government, it means Canadian carriers this fall will likely allocate all available capacity — equipment and staff — to their large domestic hubs, leaving regional airports and communities in the cold.Fortunately, addressing this crisis would not require complex policy solutions – only political will.First it requires the political will to acknowledge that while assisting air carriers during a global pandemic may not be woke, it is nonetheless necessary.It also requires the political will to acknowledge that this crisis is made worse by government user pay policies that syphon billions of dollars from air travellers and airlines each year to pay for airport infrastructure, air navigation and airport security.Finally, it requires the political will to act by providing liquidity assistance for carriers and cutting the taxes and third-party charges that weigh down their air operations like so much ballast.But make no mistake, if the government of Canada continues to avoid addressing these issues, for many – particularly young people — whether living in Atlantic Canada or northern Quebec, or any other region that fears seeing its local airport shuttered long after the rest of the country opens up, their next flight could be a one-way ticket out.Massimo Bergamini is an Ottawa writer and policy entrepreneur. He was chief executive officer of the National Airlines Council of Canada (NACC) from 2016 to 2019