Airfares take off after Jetsgo's demise: report
CTV.ca News Staff
Ticket prices for domestic routes have taken off since Jetsgo ceased operations last week, according to an analyst's report.
The Globe and Mail reports that Desjardins Securities found the average price of a ticket for a WestJet flight bought one week in advance has gone up by close to 50 per cent, compared to tickets bought the previous Monday.
The Montreal-based brokerage company also found that the price of a WestJet ticket bought three weeks in advance during the same period has gone up 20 per cent.
As for Air Canada, seat prices for a three-week advance ticket have gone up by a third. A one-week advance ticket is up 16 per cent, the report says.
The data was taken from the company's websites, and appear in today's issue of Airfare Pulse, the securities firm's weekly survey.
Study co-author Chris Couprie told The Globe fares appear to have gone back to levels seen in June, when Desjardins Securities began the survey.
Robert Milton, CEO of Air Canada's parent company ACE Aviation Holdings Inc., warned ticket prices at the airline could go up in the wake of Jetsgo's demise.
Speaking on CTV's Question Period on Sunday, Milton said Jetsgo's bargain basement prices seemed "too good to be true."
He said that if other airlines chose to raise their prices, Air Canada would as well, saying Air Canada "will not be undersold."
However, Air Canada spokeswoman Laura Cooke told The Globe that the airline has not raised its prices. She said any changes in fares are a reflection of greater demand for seats.
Ottawa facing criticism
The Consumers' Association of Canada is being critical of Ottawa in the wake of the failure of Jetsgo. And the man taking most of the heat is Transport Minister Jean Lapierre.
The group says Lapierre should resign, and are demanding to know what he knew about Jetsgo before it ceased operations early Friday morning.
"We don't know what he knew, when he knew it, what his involvement was," said Mel Fruitman, vice-president of the Consumers' Association of Canada.
"And he certainly has not stepped up to the plate to offer any condolences, consolations to consumers or any suggestions that he is going to take any action that he is going to prevent this from happening again," Fruitman told CTV's Canada AM.
Fruitman said there is no way the average consumer would have been able to tell that Jetsgo was going to fall, and that the government should take action to protect consumers.
"When you're going up to make a purchase, you're usually just looking for the best price, the best deal you can get
"You are not analyzing the situation, you're not saying 'how can they do this. I wonder if they're making money on it.'"
He said Ottawa needs to introduce a mechanism, if not legislation, to ensure airlines set aside funds to either cover the cost of flights being picked up by another airline, or for customers to get refunds.
"The industry itself needs to have some kind of contingency fund in place to help them fill the vacuum in the event of a failure like this," Fruitman said.
Airline had been running on fumes
Jetsgo had not been doing well for some time. The airline was in so much trouble, it was paying bills with unearned revenue, according to a recent report in The Globe.