The high cost of air travel in Canada, and one airline's response, made headlines last week when WestJet CEO Alexis von Hornsbroach announced measures he hopes will lower the cost of travel.
First, there's a new low-fare category that WestJet will soon be launching, which is aimed at budget-conscious travelers who want to fly for less but don't mind not having a carry-on bag.
Additionally, WestJet has submitted new policy recommendations to the federal government, including a call for a freeze on mandatory government fees, charges and policies that increase the cost of travel.
Read more: WestJet unveils new fares for travelers who want to fly without carry-on bags
The airline is calling for an overhaul of Canada's aviation infrastructure user fee system, specifically urging Ottawa to stop collecting airport fees.
“We operate in a very expensive, user-paid infrastructure environment that significantly increases ticket prices for Canadians and stifles competition,” von Hohensbroek said in a press release last week.
O (expensive) Canada
The CEO further explained his position during a question-and-answer session with CBC's Lauren McGinnis posted on Sunday (May 26).
In an interview, he said air travel in Canada is “more expensive than many other countries” because of the country's vast size and high infrastructure costs, including high fees for airports, security and air traffic control, plus associated taxes and fees administered by the government.
Von Hohensbroek said the government's current system would only lead to inflated ticket prices.
Meanwhile, Ottawa collects roughly $500 million a year in rent from the airport, the CEO said, and that money is going into the federal budget instead of actually improving the airport and lowering fees (which would result in lower ticket prices).
“This is essentially a subsidy from tourists to the government, this money just goes into the federal budget. It doesn't support infrastructure,” von Hohensbroek told CBC.
New Discount Fare Categories
WestJet's new ultra-low-cost range, due to launch in the coming weeks, is part of a plan to keep ticket prices as low as possible and give customers more choice, von Hohensbroek said.
Passengers who buy WestJet's new discount fares – an option already available on ultra-low-cost carriers such as Flair Airlines – will have less legroom and no access to overhead bins on WestJet's flights.
Read more: WestJet to densify cabins to cater to 'wider range of guests' after Swoop closure
“There are many different types of passengers, some of them are like guests. [who] “Obviously, some guests want premium service, premium seats and a lot of flexibility and they can get that, but it comes at a higher ticket price, but then there are other guests who actually want the cheapest possible transportation,” von Hohensbroek told CBC.
It's a model von Hohensbroek began hinting at last year during WestJet's integration of its now-disbanded low-cost airline, Swoop, and will go through a similar process in April 2025 with Sunwing Airlines, now owned by WestJet.
Read more: Swoop closure will allow low-cost routes to expand to 'broader network', WestJet CEO says
The combination of the two airlines will result in aircraft reconfiguration to increase cabin density and spread costs over more seats.
As first reported by PAX, WestJet's 737-800s and MAX 8s (which include former WestJet, Sunwing and Swoop aircraft) will be retrofitted with 180 seats (an increase of six from the current configuration), including 12 premium seats.
WestJet's Max 10s (70 on order over the next five years) will also add 13 seats, bringing the total to 212.
The idea is to segment customers within aircraft, rather than by airline, as WestJet did with Swoop.
High hurdles
This is also not the first time von Hohensbroek has highlighted the challenges (and high costs) of running an airline in Canada.
The European-born CEO said at a luncheon hosted by the Toronto Regional Chamber of Commerce last October that he was “surprised” by how expensive it is to offer air travel in Canada.
He pointed to high airport fees and taxes, pointing to a flight from Calgary to Toronto costing $160 “before you even sit on the plane.”
Read more: WestJet CEO asks Ottawa to freeze ticket prices and halt airport fees
Add in the cost of fuel and “that's the first $300 spent before you actually start paying the pilot, the flight crew, the aircraft, etc.”
“That's a pretty high bar,” the CEO said at the time. “If you see an airline offering you a transcontinental ticket for $59, you know one thing: The airline would be much better off giving you $59 in exchange for not flying you. That's a fact.”
Von Hohensbroek summed up that the “user fee system” was a “choice” made by the Canadian government.
“You’ve heard about the $35 airport improvement fee. [However]The only thing the airport improvement money doesn't do is improve airports. Because [airports] This money must be used to pay rent, repay debt and interest,” von Hohensbroek said.
As for Boeing…
In his interview with CBC, von Hohensbroek also addressed WestJet's deal with Boeing to buy 42 737 MAX 10 jetliners, as well as Boeing's ongoing safety, PR and financial woes.
“I think they have a very good understanding of what's going wrong with production, and they're trying to fix this at the root,” the CEO said recently after returning from Boeing's production line in Seattle and meeting with executives.
Read more: Boeing announces $355 million loss amid continuing safety concerns
But problems with Boeing have delayed deliveries of the aircraft, “which is causing problems,” von Hohensbroek said.
Still, the CEO praised Boeing for building “great” and “safe” planes, and noted that WestJet currently operates more than 140 planes.
“Every two minutes, one of these planes takes off or lands somewhere,” he told CBC. “These are all good, great, safe planes that are properly built and properly maintained by our maintenance teams.”
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