Originally Posted by
gglave
The price gap is due to US air travel subsidies that are socialist friends to the south have in place that aren't present here.
So even if you had 10 airlines operating here you'd really only see a small price decrease.
If you want lower airfares in Canada then you've got to demand that the federal and provincial governments subsidize air travel like they do in the USA.
Really depends on what our air policy set out to achieve. Does it want people to travel more? Or travel less? Its an incoherent policy, but that probably just reflects the intellectual capacity of the people in charge of the policy. The statistics themselves are pretty damning. Consider this:
IATA’s Director General and CEO Tony Tyler:
Tyler compared Canada’s aviation sector with Australia’s, a country with which Canada shares some characteristics in terms of geography, resources, demographics and other areas. According to country studies conducted on behalf of IATA by Oxford Economics:
•Aviation directly contributes 2.2% of GDP for Canada but 2.6% for Australia.
•If catalytic benefits through tourism are included, GDP contribution rises to 2.8% for Canada—and to 6.1% for Australia.
•Canada’s population is around 50% larger, but Australia has more air travel: 78 million passengers travel to, from and within Australia, compared to 71 million for Canada.
I think we can call it a comprehensive failure at this point, but I doubt its going to change because Canadian exceptionalism - the belief that we're somehow a unique country that has nothing to learn from others because we're the best at everything. Nowhere is this line of thinking more ingrained than in Ottawa - particularly in the Government.
Its not the best approach IMHO, but then again, we are country in a comfort zone - everything kind of sort of works, so be happy. Can we make it better? Undoubtedly. But why bother when everything is acceptable the way it is.
Rouge is merely a reflection of that. AC knows the high cost of operating here is going to keep transborder competitors away. As much as I dislike the Rouge product, especially at the prices its being sold at, there's no doubting that it is a smart business move. If I was working at AC, I would be fighting for it tooth and nail. If you have a market full of sheep, fleece them like there's no tomorrow.
Of course this is the same reason I support open skies. Some airlines may find operating in Canada too expensive; some may not. Let the latter come in - they will keep moves like this in check. How so? Well, take YYZ-BCN for example (that's Rouged, no?). If carriers come in and steal YYZ-AMS-DEL pax from KL, KL still has to sell that YYZ-AMS seat. It might opt to sell YYZ-AMS-BCN at a lower price than AC, putting price pressure and bringing that price down. Or at least offering more options.
I don't want to give too long an explanation, but you get the jist. Rouge is a terrible product at the price its being sold at. BUT, where are you going to go? Ottawa has decreed that it doesn't really want people flying; just doesn't like the idea. Over the past 15 years, I've been to the west coast once and to the east coast once - both on work. Would I go on my own dime? Nah, not worth it. I've been to more countries around the world than I've seen cities in Canada. And I doubt I'm the only one. I bet this country is full of people who've been to more US cities than Canadian ones. Or been to Cuba more times than they've been to cities on the other side of their own country.
That is a fail. And no, you don't need active subsidies a la the US to see a price drop. You just need to remove the taxes and rent.