The Guardian 8 June, 2005
Canada's airline industry:
another private sector failure
The recent bankruptcy of Jetsgo has left many people in Canada wondering about the future of Canada's privatised and heavily deregulated airline industry.
With thousands of passengers stranded, thousands of working people losing their jobs, and fewer areas being serviced, the question must be asked: how successful is the private sector at running airlines? Their record is not so great. Airlines recently closed in Canada include Canada 3000, City Express, Greyhound Air, Intair, Jetsgo, Royal Air, Roots Air, Vistajet and Wardair to name a few.
Chalk that up for a total of 30 airlines disappearing in Canada during the last 30 years. More jobs cut, more local services cut. Not such a success record. But at least the price of fares has reduced, right? At least that's what they tell us.
Fares have lowered, if you ignore additional surcharges and fees that have skyrocketed.
A trip from Montreal to Toronto, for example, booked online one week in advance has a fare of 88 dollars. Not bad, but what is this small print at the bottom: "All fares displayed are in Canadian Dollars, per person, for each way of travel and do not include taxes, fees, or some surcharges."
Additional fees and surcharges? What do these add up to? $20 Nav Canada Fee; $10 Airport Improvement Fee; $25 Airport Security Charge; $35 Fuel Surcharge; $10 Insurance Fee. The total? Another $100 in fees and surcharges, adding more than 113% to the price of this ticket. It shouldn't be too much of a surprise for most people that with additional fees and surcharges included, the cost of flying in Canada on average has actually doubled since 1992.
This trick of adding hidden access and user fees runs common with other privatised and deregulated industries, such as local telephone services and natural gas. It gives the illusion of lower prices, which market itself will not deliver.
My most recent gas bill, for example, had a whopping charge of 77 cents for the cost of gas itself. However, after adding up all delivery charges, taxes and surcharges my bill somehow snuck its way up to $13.75. At over 17 times the price of the gas consumed, it seems that big business doesn't know how to add, it only learned the multiplication table.
As Jetsgo bumps up the number of disappearing airlines in Canada from 29 to 30, the failure of the private sector to operate the airline industry is clear. Five major US air carriers flying in Canada are currently under bankruptcy protection, and Canadian air carriers such as Air Canada continue to float in and out of bankruptcy protection. It's only a matter of time before we have another Jetsgo. What is the solution?
If the private sector is not capable of running an airline industry, then it must be nationalised and run by the public sector to ensure jobs, lower prices and service to rural and northern areas. This means a reversal of the failed privatisation of Air Canada, and nationalisation of airlines that are not able to continue their operations.
Only in this way can we guarantee jobs and air service to all people in Canada by putting the needs of workers above the profits of airlines.
People's Voice, Canada's leading communist newspaper