Some 300 elected officials and business people are meeting in Lévis today to try to improve air service to the regions and lower the exorbitant cost of tickets. Ottawa is counting on the arrival of new players to bring down prices. But already, Air Canada is revising its rates.
Criticized for years for the high price of flights in Quebec, Air Canada revises its pricing. The carrier lowers the cost of regional flights for frequent travelers and business travelers.
The company, which holds a monopoly on several routes in Quebec, has been under intense pressure from the political community for several months. Elected officials, particularly those in the regions, denounce the exorbitant cost of intra-Quebec flights.
After talks with the Quebec Federation of Municipalities (FQM), Air Canada revised some prices down. The announcement will be confirmed today at the Regional Air Transport Summit in Lévis.
Travelers will be able to purchase 10 or 30 one-way packages to take advantage of volume savings. The formula already existed, but the cost is going down, and the number of links where the formula is offered is increasing. A Gaspé-Québec flight will cost $ 249 instead of $ 476 as it currently does.
This is Air Canada’s second rate adjustment in recent months. Last fall, the company lowered the price of tickets purchased several weeks in advance for regional connections.
The Mayor of the Îles-de-la-Madeleine, Jonathan Lapierre, is also vice-president of the FQM. He welcomes Air Canada’s decision, but feels there is still work to be done to improve air service to the regions.
“It’s not because we get winnings today that the battle is definitely won. “
– Jonathan Lapierre
For many years, municipal officials have been denouncing the high cost of air transport as a brake on tourism and economic development in the regions. They point to taxes and fees imposed by airports on airlines, which are passed on to consumers in ticket prices.
They urge governments to reduce sales taxes on regional flights, as some provinces do, and to improve airport infrastructure support programs.
The Mayor of Gaspé, Daniel Côté, is responsible for the file at the Union des municipalités du Québec. He expects government announcements at today’s summit.
“I expect that we will put the main solutions on the table and identify the main solutions,” said Mr. Côté.
OTTAWA BETS ON COMPETITION
New air carriers could soon serve the regions of Quebec, says Federal Minister Marc Garneau, who believes that the measures put in place by his government will stimulate competition and lower the price of flights. In interview at La PresseOn the eve of the Regional Air Summit, Mr. Garneau warned that he does not intend to adopt specific measures to lower the cost of domestic flights in Quebec. So there is no question of capping the price of tickets or imposing a floor price, as the opposition parties in Quebec claim. “Competition is what drives the greatest choice, the supply of destinations and lower prices,” said the minister. I will try to do that because it is something that I can control at the federal level. Last year, the Trudeau government introduced a bill that will increase the share of a Canadian air carrier that can be held by foreign investors from 25% to 49%. This measure should allow the
AN ECONOMIC PROBLEM
The elected officials denounce the high cost of air transport to the regions, no government measure has been able to address the problem so far, agrees Jacques Roy, professor at HEC Montreal. The problem is simple, he says: travelers are too few to travel to Sept-Îles, Gaspé or Rouyn-Noranda. “The cost to fly a plane is very high and this cost decreases with the number of seats that can be put in an airplane,” he says. When we talk about regional transportation, we use smaller planes. And a smaller plane, it costs more per seat than a bigger one. In his view, there are two options available to decision makers: subsidizing domestic flights or stimulating competition.
COST OF A FLIGHT FROM MONTREAL *
(Departure on February 5th, return on February 9th *)
Montreal – Gaspe $ 900.54
Montreal – Rouyn-Noranda $ 907.44
Montreal – Sept-Îles $ 770.62
Montreal – Îles-de-la-Madeleine $ 861.45
Montreal-Beijing $ 682.65
Montreal-Paris $ 659.98
Montreal-New York $ 374.62
* Search from the Google Flight search engine yesterday
Jackson Bey was born and raised in Lethbridge Alberta but moved east when he was 22. Apart from running his own consulting firm. Jackson spends his time canoeing the many lakes of Ontario. As a financial journalist Jackson has published stories for CBC Business Online, as well as Buzz Feed and Motherboard. As a contributor to Billionaire 365, Jackson mostly covers markets and trade.