Article: BC consumers flocking to US airports

[Panama Jack]

I thought it is more an issue of taxation that is the main driver for people making the first international segment of their trip abroad in an automobile.

B.C. consumers flocking to U.S. airports for better access to international destinations
Thursday June 13th 2013 - Consumers' Association of Canada Press Release

The Consumers' Association of Canada (CAC) released polling today that shows B.C. air travellers are flocking to U.S. airports to catch flights because of better access to international destinations, putting further pressure on the Federal Government to end its protectionist policy regarding access of foreign carriers to the Canadian market.

"Canadian airports are woefully underserved by international carriers - and that is not because international carriers are not willing to fly here. Instead, it is because the Federal Government has chosen protectionism over consumer choice and competition. Now we are seeing the logical outcome of that policy with British Columbians flocking to U.S. airports to catch direct flights. It is a new form of cross-border shopping driven by bad government policy," stated Bruce Cran, President.

The poll asked B.C. consumers to consider a scenario in which they need to travel to an overseas city not served by a Canadian airline. Given the choice of taking a flight from a Canadian airport to an international connecting airport and then a second flight to their ultimate destination, versus driving to a nearby U.S. airport that offers direct service to the overseas city, 39% chose the latter option.

"There are countless examples of international carriers that want to offer service to new destinations that are denied the right to fly to Canada and then set up operations in northern U.S. cities to serve the Canadian market, with perhaps no better example than Seattle. Canadians are sophisticated consumers and you cannot force them into making inconvenient travel choices when much better ones are within driving distance across the border," added Cran.

The polling results come on the heels of several studies that have looked at the number of Canadians driving to the U.S. to fly out airports there. While many of those studies have suggested cost is the motivating factor, the poll results show access to international destinations is also critical. Canada is competing with the U.S. for carrier and passenger traffic, and the U.S. has an open skies policy. Many carriers that want to serve Vancouver have instead been forced to fly to Seattle due to Federal Government access restrictions.

"It is ironic that some vested interests in Canadian aviation who have argued so strenuously for continued protectionism are inflicting severe damage on the Canadian airports that are at the heart of our aviation system, aided and abetted by the Federal Government. When it comes to aviation in Canada, you are truly entering the Bizarro World," stated Cran.

"Transport Canada should get an award from the Seattle Chamber of Commerce for driving so much business to that city over Vancouver through its policy of restricting access of foreign carriers to the Canadian market," added Cran. The CAC wants the Federal Government to adopt a far more aggressive approach to air liberalization and allow foreign carriers that want to service Canada to do so.

The polling was conducted between January 31 and February 4, 2013 by Harris/Decima and involved telephone interviews with 1,015 Canadians.

[confusedalot]

Just took a look at the Vancouver and Seattle airport departure pages. Major cities in Asia, Europe and the US seem to be pretty much covered at both with nonstop flights, non Canadian carriers included.

Vancouver non stop to Pittsburgh seems to be an issue though

I wonder if Mr Crans is advocating cabotage?

[Bell206]

Definitely agree with you on the coverage of Asia and Europe out of Canadian airports. Now the middle east doesn't have the same coverage as American airports. limited flights (3 per week) and only flying out of Toronto. I would say though that the majority of the people out of Toronto on Etihad are not on a direct flight to Abu Dhabi but onward to India and other destinations in the region. Etihad and Air Canada are in talks partnering up on codeshare flights. There is a direct flight to Dubai from Seattle on Emirates stealing some of the Vancouver passengers heading that way. Booked an awesome deal yvr-seattle-dubai-bangkok return for only $1260, so competitive prices too. Some more competition would be nice for the consumer.

[confusedalot]

amazing price considering total distance travelled. I did not check but I doubt any of the alliance partners could price match whether heading east or west from the pacific coast.

the middle east vs canada aviation pissing contest seems to be on the back burner for the moment, suspect it will flare up again once all parties get bored with their current toys.

I do wonder however whether there is enough catchment from vancouver towards the middle east and onwards to make regular nonstop scheduled service a viable option.

[Panama Jack]

I figured I would throw in the article and see what some of the comments were. I suspected that Mr. Cran is specifically taking aim at the issue of Middle Eastern carriers, like Emirates, Etihad, and Qatar Airways, which provide daily service to a number of US airports while Canada was involved in a high-profile diplomatic scuffle related to UAE carriers who wanted to add a significant number of services between Canada and the UAE.

I imagine that the Asian Sub-continent diaspora are, in particular, interested in additional, cheaper options.
While my outlook is, generally speaking, very much pro-open markets and liberalization (whenever and wherever we are dealing with a level playing field), I am agreement with Canada’s position on this. The position, of course, is very clearly spelled out in the 2006 Blue Sky Policy which can be viewed at http://www.tc.gc.ca/eng/policy/air-blue ... u-2989.htm

Where the UAE (and Qatar) fail the test in increasing bilateral rights or an open-skies policy is also very clearly spelled out. Both countries fail the last two of the following four tests:

Considerations that could influence Canada’s approach to bilateral air negotiations include:
• the ability of Canadian airlines to operate services is severely limited by discriminatory airport access and/or facilitation issues;
• the “doing business” environment (e.g., transfer of funds, provisions on double taxation) presents major obstacles to Canadian airlines’ commercial operations;
• the foreign carrier(s) appears not to be behaving in accordance with rational business principles or is protected from normal market disciplines, resulting in a markedly unbalanced playing field vis-à-vis Canadian airlines; and
• the foreign carrier(s) would be reasonably expected to offer a level of service to such an extent that competition in some markets/routes would be significantly reduced or effectively eliminated – resulting in a net loss for Canada.

Consumers may not be happy with that approach and it may not be perfect. It does, however, level the playing field to protect air carriers serving Canada from seats being dumped on the market by air carriers who are protected from market disciplines by their home government and enjoy complete state support.

[North Shore]

[quote]The poll asked B.C. consumers to consider a scenario in which they need to travel to an overseas city not served by a Canadian airline. Given the choice of taking a flight from a Canadian airport to an international connecting airport and then a second flight to their ultimate destination, versus driving to a nearby U.S. airport that offers direct service to the overseas city, 39% chose the latter option. /quote]

Not sure that this is reflective of what actually happens. The poll is about a hypothetical situation; I suspect that when push comes to shove, a lot more people will opt for the convenience of CYVR over the hassles associated with getting to KSEA.

[crazy_aviator]

If yall travel through some American states, you will then understand WHY protectionism is not a bad thing ( to an extent). 1200 lives were lost in 1 building collapse in Bangladesh, and we get to buy CHEAP clothing at Walmart and seem to think we are insulated from blame,,, meanwhile, OUR jobs are being farmed out to these countries in an UNLEVEL playing field. Aviation is a cutthroat business where MANY countries subsidize their airlines ( Remember state owned Air Canada ) In order to undercut and compete worldwide,,,that then REQUIRES tariffs and protectionist laws for OUR country. Stop drinking the University kool-aid you brainwashed little ones

[Realitychex]

The issue is largely the taxes and fees, both visible and invisible, imposed by all levels of government on both sides of the border.

Level that playing field and the problem all but disappears.

WJ Toronto to New York (LGA) - 357 miles, July 17: $94 fare + $82 in taxes and fees
WJ New York (LGA) to Toronto - same date...July 17:$94 fare + $18 in taxes and fees.

Compare that to:

LGA-PIT - July 17 (335 miles)
Best fare is $377

LGA-RDU - July 17 (431 miles)
Best fare is $115

LGA-PWM, (269 miles)
Best fare is $242

LGA-CMW (479 miles)
Best fare is $242

LGA-CLE (419 miles)
Best fare is $199

LGA-BUF (292 miles)
Best fare is $88 via DC
$77 from JFK

LGA-ROC (254 miles)
Best fare is $114

LGA-RIC (292 miles)
Best fare is $195

LGA-ORF (296 miles)
Best fare is $191

LGA-MHT (195 miles)
Best fare is $181

For those people wanting to fly Toronto - Fort Lauderdale this coming Friday, (3 days from now).....

YYZ-FLL n/s $179 fare + $101 in government fees and taxes = $280
BUF-FLL $214 all in with a connection in CLT, DCA or PHL, $252 on Southwest n/s.

For those people wanting to fly Toronto - Las Vegas this coming Thursday, 2 days from now).....

YYZ-LAS N/S $514.50
BUF - LAS via BOS/CLT/ORD $358
BUF-LAS n/s on Southwest $561

For those people wanting to fly Toronto - Montego Bay this coming Thursday, 2 days from now).....

BUF-MBJ via IAD or ORD: $352
YYZ-MBJ n/s $326.50

For those people wanting to fly Toronto - Myrtle Beach this coming Thursday, 2 days from now).....

BUF-MYR 3 stops (Boston, New York and Charlotte) $299 Best one stop price is $499
YYZ-MYR n/s $262.50

Fares from Canada are pretty darn competitive, even with all the stupid taxes.

There's always someone who will find the anomaly, usually comparing different dates, times, airports, (ie it costs less to fly from Buffalo if you book a month in advance compared to flying from Toronto tomorrow afternoon).

No one who makes the hike to a trans border airport is EVER going to admit that all the extra effort didn't have the advertised payoff.

Still, perception is reality and the perception is that fares are cheaper in the US. I wouldn't bother with saving $28 to drive to Buffalo for my flight to FLL this weekend, but some people who place no value on time will.

[Bell206]

I would never drive to Seattle to much of a hassle but a code share on Alaskan to fly Emirates out of Seattle is convenient especially if the price is right. It all comes down to best value. travel time or routing VS price. There are a ton of ways to get to Bangkok out of YVR, through Hong Kong, China, Korea, Philippines, Singapore, Japan, Taiwan. Most competitively priced too. I assume most travellers would much rather pay $100-200 more for a shorter travel duration time and without a 12hr layover on the way home for the convenience. So I personally think most travellers these days will pick price VS convenience and airlines know this so they have to lower prices to compete for example yvr to bkk through asia around $1100-1300 usually. While yvr -bkk through Dubai with more stops longer flight $1200+. competitive right? now a flight yvr to Dubai same flight same airline with out the additional 6 hr bkk leg, is $1500+, why does it cost more because of the competitiveness on fares vs convenience of travel to the destination.

We do need some sort of protectionism in Canada. Many countries have much lower operating cost and employee standards which our industry couldn't compete with. International flights I think are very competitive and pricing is not bad at all out of Canada. Its the domestic flights that seem a little pricey. Europe and Asia have a few low cost carriers some very successful, Air Asia and Ryan Air to name a few with very cheap pricing. Paid one way $50 Bali to Phuket 4 hr flight on a Air Asia sale, or Germany to Ireland $60 about 2hrs but they usually try to fly out of low cost airports with lower landing fees, handling fees, and taxes etc. You can't have it all though and we need a happy medium. There is less volume in Canada and much smaller population although I would like to see the price of domestic flights drop. Although we can now go again to the UAE with the old/new visa regs thanks to Canada's agreement to provide Uranium for there nuclear power plants and air Canada and Etihad are buddying up. Its just different politics different games and a whole different world in some of these countries.

[bmc]

Good post, Realitychex. Nice to see an apples to apples comparison. Thanks for the time and effort.

[loopa]

I do wonder however whether there is enough catchment from vancouver towards the middle east and onwards to make regular nonstop scheduled service a viable option.

For sure there is. Passengers travel daily on Lufthansa/KLM/AC to get to Dubai/Abu Dhabi/Tehran/Kuwait/Istanbul, etc. Especially during Muslim celebratory times like new years and Ramadan etc.

Emirates can fulfill a YVR-DXB service as easy as it can SEA-DXB. The people are going in the same direction, to the same destinations. Heck they are filling an A380 from YYZ-DXB.

There's a market, but I also in a way agree with Panama Jacks' stands with Canada's token on the matter.