Westjet sold to Onex corporation

[adam c]

booked a trip with Westjet yesterday, found it odd that the child tickets are more expensive than adults

Also http://www.enerjet.ca/ is looking to re-brand and become a ULCC

[KrisYYC]

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You want cheaper air travel, open up our skies to foreign investment and air carriers. Prices will come down.

Not going to happen unless it's reciprocal with everybody. So it'll never happen.

[ercchry]

So... perhaps the solution to “subsidize domestic flights” ...would be the government NOT taxing its own citizens to travel and instead gouge the people coming into the country... like every country does with its visas and other taxes... Hrm... perhaps that’s the intervention that would work... maybe??? But no, cause socialism

[KrisYYC]

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So... perhaps the solution to “subsidize domestic flights” ...would be the government NOT taxing its own citizens to travel and instead gouge the people coming into the country... like every country does with its visas and other taxes... Hrm... perhaps that’s the intervention that would work... maybe??? But no, cause socialism

How about the government doesn't subsidize domestic flights at all and the guy with an M3 and a cottage in Ontario pony up the cash that the ticket is selling for based on market forces?

[killramos]

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So... perhaps the solution to “subsidize domestic flights” ...would be the government NOT taxing its own citizens to travel and instead gouge the people coming into the country... like every country does with its visas and other taxes... Hrm... perhaps that’s the intervention that would work... maybe??? But no, cause socialism

So you went from Communist to Trump in what 3 posts?

Starting to think you are just needy

[ercchry]

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How about the government doesn't subsidize domestic flights at all and the guy with an M3 and a cottage in Ontario pony up the cash that the ticket is selling for based on market forces?

But then I would just be subsiding the east even more than I do already as an Albertan!

[revelations]

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Switching to a la carte fees for extras like seat selection, checked luggage etc. is the most fair way to price air travel. Why should someone who just wants a cheap seat and isn't checking a bag pay the same as someone who wants to pick their exact seat and has two huge suit cases etc?

I know - what I am saying is there will be an INCREASE in these fees.

Airlines loathe to up their base rates, so the bags/drinks/etc. will just get pricier .... haha

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Not going to happen unless it's reciprocal with everybody. So it'll never happen.

That would be quite interesting to see though - all the route competition laws (anti predatory pricing) out the door ..... would be quite disruptive for sure. Not sure if good/bad though.

[ExtraSlow]

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Not going to happen unless it's reciprocal with everybody. So it'll never happen.

But why not? I think cheaper airfares would be a larger benefit to Canada citizens and economy than protecting a small monopoly.

[KrisYYC]

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I know - what I am saying is there will be an INCREASE in these fees.

Airlines loathe to up their base rates, so the bags/drinks/etc. will just get pricier .... haha

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That would be quite interesting to see though - all the route competition laws (anti predatory pricing) out the door ..... would be quite disruptive for sure. Not sure if good/bad though.

Yeah I figured you weren't criticizing the a la carte pricing, my statement was more a general one at the many who do, not at you.

And it would be interesting indeed if the global air travel market was totally unrestricted. No bilaterals, no foreign ownership restrictions and no government subsidies of any kind. My prediction would be the big US carriers would probably dominate a large chunk of it despite their higher costs relative to less developed countries. Their scale, the amount of capital they have access to, their know how (the US airlines basically built the industry to begin with) would be a HUGE advantage that would outweigh their higher labour costs in my opinion.

[ercchry]

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But why not? I think cheaper airfares would be a larger benefit to Canada citizens and economy than protecting a small monopoly.

It would be great! I have personally never been east of Ontario... not because the east coast and Quebec doesn’t have amazing reasons to visit... but purely cause I could be anywhere else in the world for less. I doubt I’m alone on this. Supply and demand be damned. It’s a BS excuse, especially when that’s the excuse for TO being so expensive... but the US/Asia/Europe having cheap flights due to more population.... both of those things can’t exist at the same time. It’s purely due to competition... or lack of taxes

[KrisYYC]

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But why not? I think cheaper airfares would be a larger benefit to Canada citizens and economy than protecting a small monopoly.

Why would we allow foreign airlines unrestricted access if they would not do the same in return?

And why only airlines? Why not open up ALL industries to unrestricted foreign ownership?

[Tik-Tok]

I don't see fully open skies happening, however I definitely foresee a reciprocal, limited cabotage agreement between the US and Canada, between major cities.

[ExtraSlow]

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Why not open up ALL industries to unrestricted foreign ownership?

Yes! I totally agree. Restricting ownership is madness for a relatively small economy like ours. It's just guarantees inefficiencies.

[ercchry]

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Yes! I totally agree. Restricting ownership is madness for a relatively small economy like ours. It's just guarantees inefficiencies.

I think it still has to be looked at from a net benefit to Canada standpoint, unrestricted air travel to make it easier and cheaper for Canadians to get around the country, retaining more wealth within the borders makes sense... but things like natural resources are a touch more dicy... as we could see more more wealth leaving the country than being retained depending on the entire structure of that industry from royalties to wages, and which jobs must be local hires vs outsourced to the home lands of the ownership... or cheapest labour

[KrisYYC]

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It would be great! I have personally never been east of Ontario... not because the east coast and Quebec doesn’t have amazing reasons to visit... but purely cause I could be anywhere else in the world for less. I doubt I’m alone on this. Supply and demand be damned. It’s a BS excuse, especially when that’s the excuse for TO being so expensive... but the US/Asia/Europe having cheap flights due to more population.... both of those things can’t exist at the same time. It’s purely due to competition... or lack of taxes

It's not a BS excuse. If the tickets are too expensive, people won't buy them and demand drops so supply (unsold tickets) goes up. In order to sell those unsold tickets the prices will have to come down.

We will never have air fares as cheap as US, Europe, Asia due to the economies of scale already mentioned in this thread.

I'd suggest reading up on the following topics:

-Basic economics and supply and demand

-Economies of scale

-Airline yield management

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Yes! I totally agree. Restricting ownership is madness for a relatively small economy like ours. It's just guarantees inefficiencies.

The problem is, NOBODY really does this. Pretty much every country has some level of foreign ownership restrictions. Everybody would have to be on board or we'd basically just become a colony all over again.

[ercchry]

What you are not factoring in is the subsidy from the private sector that is cover the cost of 85% of these flights. Your basic econ 101 reasoning is not the true reason for these prices... it’s also due to government intervention in the way of taxes, surprise, surprise... Canada is socialist and most of these other countries are not

[KrisYYC]

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What you are not factoring in is the subsidy from the private sector that is cover the cost of 85% of these flights. Your basic econ 101 reasoning is not the true reason for these prices... it’s also due to government intervention in the way of taxes, surprise, surprise... Canada is socialist and most of these other countries are not

Your first point about the private sector, do you mean it's private companies covering 85% of the cost via corporate executive travel between Calgary and TO? If that's what you mean then my point still stands. It doesn't matter who is buying the tickets or why they're traveling. What matters is tickets are being sold.

Regarding your second point: I'm talking about just the air fare itself and not the total cost of the ticket including taxes. I agree that a massive chunk of the cost is taxes, which is why I advocated for government getting out of the way and to stop taxing air travel so much. That would be the best way to lower total ticket costs for the average Joe. Airline profit margins as a whole are actually pretty razor thin so there isn't a ton of wiggle room for the air fare itself (hence a la carte stuff like bag fees etc).

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I don't see fully open skies happening, however I definitely foresee a reciprocal, limited cabotage agreement between the US and Canada, between major cities.

Agreed

[ercchry]

I already said that! You still had issues with it. Obviously it’s about the total cost of a flight, not net profits to the friggin airline. I still stand by the fact that the value to a private corporation to fly someone to TO skews the actual demand at that price point vs what an individual would likely spend out of their own pocket

The only thing that changes the bottom line within Canada vs international is the taxes at individual airports. The costs to fly should be based on an hourly rate as staffing and fuel should be the massive costs as the leases on the planes should be fixed regardless of total flights (I would think hours would play more of a role in that department, also for maintenance) so it should be pretty easy to put in a cost per hour of travel pricing scheme of we can remove the variable of airport taxes. Supply and demand shouldn’t even be an issue, why? Cause if there is more demand of a route over another, it should be as simple as filling it with more flights. Competition would help here if the current airlines can’t fill the void. So if that means we need foreign investment, then so be it. But I would think if it makes sense financially to operate an airline within the current requirements we would have more of them. If it doesn’t, why? Cause the government isn’t being accommodating. Either in subsidies, or in over taxation. Either way. Government intervention could fix it... intervention can also be in the lack of intervention... not just in the addition of more red tape

[Misterman]

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Well if the demand is SO high that they are putting more flights on that route, then it should hit a critical mass of flights that bring down prices, no? Supply and demand after all. Right???

Or... is it more of a profit hungry move as most people flying between the two centres HAVE to travel said route regardless of price?

Also, I said the ONE place I would like to see government intervention... since, well one of the jobs of government is to make sure it’s citizens can move about the country... also keep flights within the country affordable is a net benefit it Canada since as a nation we prosper the most if we can bring wealth into the nation, then retain it within our borders... Jesus, I’m usually so far right on the spectrum of politics that it would make trump question it... but this just makes sense... or cents?

Airlines in this country are broken. Cheap domestic flights exist literally everywhere else, just not here.

We just don't have the population to create enough volume that the carriers can give us cheap flights. And with the rules around foreign investment, it means we will never have some large US airline or the like, move in here and put Canadian flights under their large umbrella which would bring average flight costs down.

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But why not? I think cheaper airfares would be a larger benefit to Canada citizens and economy than protecting a small monopoly.

The government isn't generally concerned with what is good for the citizens, just about what's good for government. The government bringing in less revenue from taxation on cheaper flights is bad. Jobs that leave south of the border and no longer generate income tax revenue is bad. Big business paying fractional tax because they are located outside of Canada is bad. Doesn't seem like we will ever see them ease up on foreign ownership regulations.

[Misterman]

Interesting timing for this to come out as everyone is discussing airline costs and profits.

https://www.cbc.ca/news/politics/pas...ails-1.5147589