WestJet CEO Alexis von Hoensbroech says Canada needs a national aviation strategy to address high airline costs and an over-regulated system.
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WestJet chief executive Alexis von Hoensbroech says Canada should adopt a national aviation strategy aimed at curbing rising industry costs and correcting what he described as a “tilting” of the market caused by government aid.
In remarks provided from Calgary, von Hoensbroech said current labour laws, passenger rights, taxes and fees hinder airline growth and reduce Canadian carriers’ bottom lines. He argued domestic airlines face higher costs than U.S. competitors across areas including air navigation, emissions offsets and customer compensation.
Von Hoensbroech said he is “thankful” the federal government has begun looking at reforms involving airport governance, labour rules and consumer protections, but he cautioned those changes need to be part of a broader vision rather than addressed in isolation.
He said the airline sector has already consolidated over about the past three years, noting Lynx Air’s collapse, WestJet’s decision to fold its low-cost Swoop unit into its mainline service, and its purchase of Sunwing Airlines.
Fuel costs have also pressured carriers, with von Hoensbroech saying the global oil shock sparked by the Iran war added more than $1 billion to WestJet’s expenses this year—an increase of more than 60 per cent year over year.
Von Hoensbroech criticized emergency aid sought by airlines, saying low-interest loans risk becoming taxpayer “gifts” and deepening federal influence over the market. He cited Transat’s COVID-era government loans, which he said were restructured last year so that nearly half of its $772-million debt was forgiven and another portion converted to five years of no-interest credit.
He also said airlines can use assistance to fund growth and reduce ticket prices, which he argued can undermine the industry’s ability to recover rising fuel costs.
Employment relations professor Geraint Harvey said any national industrial strategy would need to incorporate the views of consumers and the 265,000 workers directly employed in aviation, according to International Air Transport Association figures. Harvey questioned how such a strategy would define “strength,” adding that profitability can be at odds with outcomes for workers and passengers.
Harvey said a national aviation strategy is not necessarily a bad thing, but it must be built from input across multiple stakeholders rather than determined solely by airlines.
He also noted that Canada’s passenger pricing and operating costs differ from the U.S. model, including airport improvement fees that can top $40 in Canada while remaining capped at US$4.50 in the United States, and air navigation costs that Canadian carriers pay rather than relying on U.S.-style subsidies.
Harvey said that strikes in Canada have periodically disrupted major carriers over the past three and a half years, including actions involving Air Canada and WestJet flight attendants and mechanics, and that pilots’ job action was a real possibility during WestJet and Air Transat contract talks.
The United States has not seen a major airline sector strike since 1993, according to the material, with federal laws limiting unions’ ability to walk off the job.
John Gradek, an aviation management professor at McGill University, said some jurisdictions handle airport improvement costs differently, by folding them into broader landing fees rather than listing them as a line item. Gradek also said he would prefer such costs be explicit so they can be managed and accounted for, rather than hidden.
Gradek added that skeptics have questioned why taxpayers should subsidize air navigation costs, and said consumer protection standards vary between countries, while also commenting that Canada has an “OK” national aviation strategy.
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