Canada’s Flight Path to a Brighter Aviation Future

Transcript

Robert Kokonis:Well, it's great to be here. We've got a great panel, and it is Canada-focused, and I just want to introduce who I have with me. So we have Edmund, Eddie Aldebs, who is the Senior Vice President and Chief Commercial Officer of Canada's Porter Airlines, which started up in 2007. Hi.

Edmond Eldebs:Correct.

Robert Kokonis:Monette Paché, who is the President of the Canadian Airports Council, which is also part of ACI North America. And at the end, we have Jennifer Little, who is the Director General of Air Policy for Transport Canada. So we have, we have the perfect team. We've got the airline, we've got the airport represented, and we've got the government regulator in air policy. So we'll try to leave a few minutes at the end. We have a lot of content. I see we're down to 27 minutes, originally 40, but we'll do our best here. I'm going to stand out in the audience. It's a little easier if I can see the panel, like Ken Quinn did yesterday for one of the panels. So I just want to throw out a few— through a few questions. Anybody can answer it. Let's not be specific to one person, but I just want to start off by addressing a couple of the ecosystem issues in Canada. Just for you to know, it's a massive country, second largest country in the world after Russia. That presents its own challenges. Our population density is not large, as you can imagine. We're 5,000 kilometers east to west and probably almost 3,000 kilometres from north to south. So Canada's population, if you do know this, is situated primarily in that Quebec City to Windsor, Ontario, near Detroit axis, in the pockets in western Canada around Calgary and Edmonton in Alberta, and the Vancouver area. So we, we don't have a lot of areas with population density. We became a user fee-based aviation ecosystem after the 1990s when Most of Canada's larger airports were passed over, handed over to local not-for-profit, non-share capital airport authorities, along with a change in air navigation services provider. Nav Canada came online in 1996, and also security charges are also user-paid as well too. And the last but not least is just, you know, people ask me travel per capita, how does Canada stack up versus other countries, and that might be an important consideration in terms of, does Canada have the right structured aviation ecosystem from a cost standpoint? Are we getting enough people travelling? So just a quick couple of stats: Iceland, Singapore, the Emirates, Australia, Norway, and the US have more people travelling per capita than Canada, but I look to some of the countries with established rail infrastructure like the UK, Japan, France, Germany, understandably, their average number of trips, resident trips per capita, is lower because they can rely upon rail. All that said, to lay the groundwork for my first question, which is, knowing these stats, does Canada have an aviation ecosystem that effectively supports the movement of people and goods across such a big country? Anybody can take that on. How about, Eddy, we start with you? Sure.

Edmond Eldebs:I'd say partially. I think, you know, To add on to some of the points you mentioned, Canada's unique in that it's the 2nd largest landmass in the world. You've got that 41 million population that are scattered around some of the large border cities there, and then much smaller communities that are harder to access further north in the country. And the distances are, are large and significant. So I think Canada's unique in that air travel is key to ensuring proper movement. across the countries to ensuring, you know, goods are moved, people are moved, and the country has what it needs in terms of connectivity. And I think, you know, rail can't be a solution, an efficient solution. Driving can't be an efficient solution to those distances. I'd say the uniqueness of Canada is that it's expensive to travel. And so some of the stats you mentioned on a per capita basis, I would compare Australia probably closest to Canada in terms of its population and how the country is set up. So you've got the coastal cities where most of the population live, and then interior to the country, you know, more sparse, smaller communities. And so it creates a unique dynamic. And I think, you know, air travel in Australia is a lot cheaper from a fee and tax perspective, and I think you see a lot more travel.

Robert Kokonis:That's a good response. I know that, you know, you mixed in a little bit about affordability, which is another question we have, and I just ask, you know, Minette, from your perspective, airport infrastructure, more broadly speaking, the entire aviation ecosystem, what's working, what's not working sufficiently, and how does that sort of dovetail into my other question, which is, do we have an affordable system, and if we don't have it quite affordable enough, what are some of the things we should be looking at to drive costs out of the system and raise that affordability factor? So it's a double-ended question. It's infrastructure and what's working, and also from an affordability standpoint.

Monette Pasher:Yeah, great. Thanks for that. I think, you know, even when you just think about, you know, Canadians and their propensity to travel, like, we really are about middle of the pack. So, you know, you say, is it good? Well, it's good and it's great, and we have more competition in our market than we've ever had before, and we welcome that. You know, we don't have fully open skies like they have in Australia, and I think that is a bit of that framework of the difference that we have, and a lot of the carriers in Australia start up and go under, right? So, like, I think in Canada we have consistent national carriers, we have carriers like Porter that have been growing, but is there room for improvement? Of course there is. I think there's always room for improvement. I think we should always be striving for better. I do, though, always like to look back and think about like where we came from, where we are today, and then where we're going. So when I think back of like divesting our airports in this model, the government decided to divest them in the early '90s. And at the time, they were losing $750 million a year, right? So they were in the, in the red operating the airports, and they really didn't have a way to generate the cash to keep up with the growing demand of travel. Our country is so big, you can't drive from the East Coast to Montreal for a day's meeting, you need to fly. So there was just no way to keep up with the infrastructure that was needed. So they decided to, you know, commercialize them to a degree, and I think we went so far, and it's worked really well for our country. Our airports over the last couple of decades have invested over $30 billion in that infrastructure, and I think now we're also at a point where it's like, okay, and what's for the next decade and investing again. We're seeing our hubs in Toronto and Montreal, you know, needing more gates, and our carriers want to continue to grow, and people want to travel even more by air. So there's— I think there's ambition for more growth, and we need the right regulatory environment to do that. And that's why we have Jennifer here at the table too, and we work very closely together talking about what we need in order to grow, what we could do to make this system more affordable. Like, we are really one of the only countries in the world that has airport rent. It's about $5— this last year was $557 million that was paid to the federal treasury, and that's not getting fully reinvested back into our system. Only a small, small sliver is back into small airports. So I do think there's a piece of that where we can look at and say, okay, well, what are some of the opportunities for a lower, you know, to reduce the burden on the system or to improve its competitiveness. And I think also to improve digitization and some of the ways we can improve efficiency, which are those discussions that we're having as an industry now. So, sum up, I think we've come a long way. We're in a good place, but of course, there's more to do.

Robert Kokonis:That's a great segue to Jennifer. You know, Transport Canada, which of course was at the forefront in the 1990s with the handover of Canadian airports under the National Airport System under these, you know, long-term ground leases, 99 years in some cases, Transport Canada passing it off. We know there was an underinvestment infrastructure leading up to that point, and a lot of these airport authorities had to play catch-up, but your role in air policy is, you know, I'm assuming, is to ensure a stable system, one also that can foster competition, we have the right number of carriers, and we're growing in the right way. Maybe just Explain to the room, talking about affordability, talking about infrastructure, talking about, as Minette said, we need to increase some of that connectivity infrastructure, more gates, more whatever. What role is Transport Canada playing? What are some of the things you're looking at to facilitate those steps?

Jennifer Little:Thanks very much for the question, and good afternoon, everybody. Thanks for having me. It's not an easy challenge, right, that we face in Canada for all the reasons everyone has described thus far. I think, Rob, the answer to your first question Is the system working for Canadians? It really depends who you ask. And from a public policy perspective, that's a challenge, because of course we want the system to work for everybody. And so we do work very closely with our partners in industry. The government is really seized with questions of affordability, connectivity, which in Canada has a particular flavour when you consider that there are Canadians who live in communities where the only access is by air, and those tend to be very small communities. So the economies of scale for providing not only service, but also critical supply to those communities, is very challenging. And the market forces don't necessarily work to keep costs down, and competition may not be possible in some of these communities. And so it is a big, big challenge. So we do take an ecosystem approach. We take a look at all of the partners across the air ecosystem. Transport Canada is one of the federal partners in— if you think of, like, a passenger journey, for example, Transport Canada's primary role is in the safety and security regulation, but from a policy perspective, we take back and think about how the various touchpoints affect a passenger's journey. We work with our colleagues in Border Services. We work very closely with U.S. Customs and Border Services as well in the context of preclearance. We have a security screening system that is paid for by Thank you. So, it's true that there are a lot of fees and charges and taxes in the system, and that's by design, because Canada went to a user-pay system, again, back around the time of the '90s, when a deliberate choice was made that the users of the system would bear the costs. And the question we're asking ourselves now is, is that sustainable? There are so many headwinds facing the industry, and I think everyone is experiencing right now that the jet fuel crisis is exacerbating that. So what role do the taxes and fees, and what role can the government play? And so the government did agree, in response to a recent study that was conducted by our Transport Committee in Parliament, to take a look at taxes, fees, and charges across the system, including this air security tax. Rent could be seen as a form of tax, as Minette mentioned, in the context of our airports. So one of our policy options right now is to take a look at the taxes, fees, and charges system and see what we might be able to do about it.

Robert Kokonis:That's a good point because I know that, you know, there has been some criticism leveled at the government in terms of the fees we collect for security charges or the airport rents, and are we putting that money into general revenues or are they being targeted to ensure we're investing back in the infrastructure that we need? I want to come to you, Eddie, in just a moment on— to lead off on infrastructure, but you mentioned something about the north, and I think because As I said, low population density, but Canada's north, it's essential to have good air connectivity. We don't have either of Canada's 2 largest northern carriers here, Air North and Canadian North, but can you— both you and Minette, you can just quickly address the north and rural access. What more things could we be doing to ensure that all Canadians from coast to coast to coast have the access they need to our air system? Maybe, Minette, you can lead off.

Monette Pasher:Yeah, sure. I mean, yeah, some of our territories have, you know, over 20 fly-in, fly-out communities, just for an example. So this isn't a matter of, you know, when we talk about user pay, I always like— I think the user pay model works, but I think it also— there's so many aspects of our ecosystem and air transportation that isn't just about something nice to do. It's a have-to-do, and it's It's healthcare. It's moving people, moving goods that are essential for our economy to function, and cargo, and the list goes on. So I do think that there also is an element of this ecosystem that should be supported in some way by the government, and that's been our longstanding position. And there is a fund there when the airports were divested. It's called the Airport Capital Assistance Program that some of the territory airports are are eligible for. It's been funded traditionally at $38 million annually, and it's been that way for, for decades. So, you know, as costs have risen, we need that fund to grow with the, with the need, and our estimate is that it, you know, it needs to be funded at around $150 million, and, and part of that's for the north, but there is a northern infrastructure fund that the government is looking at, and I'll let Jennifer talk to that.

Jennifer Little:Yeah, thank you. You're right, Monette, and as I mentioned earlier, where market forces simply can't sustain the travel. That's where the government is finding a niche and stepping in with programs. The government also announced recently the Arctic Investment Infrastructure Fund in recognition of the fact that the conditions in the North are very, very unique. We're also taking a look at where some of the facilities and infrastructure in Northern Canada could have a dual-use purpose, for example, so to support not only civilian but also military use. And so the government, and from a policy perspective, we're taking a look at all of these angles to see where, if there's intervention necessary, where it can have the most impact.

Robert Kokonis:By the way, come and visit Canada's North. A lot of us in this room have flown probably between Europe and, you know, maybe West Coast of the US a million times over our Arctic or Labrador, but never seen it. So I invite all of you, please, to come and see the incredible beauty and The Yukon, Northwest Territories, and Nunavut, our 3 northern territories. Eddie, coming back to you, we've talked before about critical connectivity infrastructure, what that means, and to an airline like Porter that's grown tremendously since birth, especially the last couple of years since you started to take delivery of the gorgeous Embraer E2-195, great aircraft, by the way, in addition to your Q400 fleet. What are some of the things you think we need to still develop further? further in the country. I mean, I mentioned, for example, gates and things like that. And tied into that, we can build the most beautiful infrastructure in the world, but what are the levers we need to ensure that people, the average traveler, can use those pieces of infrastructure?

Dave Semanchik:Sure.

Edmond Eldebs:Yeah, I'd say there's 2 things there. So first of all, I agree that the system, the user-pay system, does work. I think, you know, Enabling more of the population to travel is, is what's key. And so, um, I think if more people— the more people to travel, the more demand there'll be, of course, and the infrastructure will come. I'm going to use Montreal as an example. Porter will very soon begin operating from Montreal Metropolitan Airport, which is an airport that's currently being used for some northern Quebec travel and some cargo. travel. It's a domestic-only airport. Montreal is the 2nd largest city in Canada. It's served by one airport commercially today, Montreal-Trudeau. That airport Porter operates into, very congested, and has a lot of challenges that will be addressed over time, but there's a long-term capital and construction project underway. The city can certainly support a 2nd airport. Porter, in partnership with Macquarie Asset Management, just built a terminal that is very close to the city. It's actually equidistant to 50% of the Montreal population, and it's on the south shore just off the island in Longueuil. And so we've invested significantly alongside our partner to build this brand new terminal with 9 gates, 28 check-in counters, and we're going to begin operating 11 routes from this terminal. So that it's domestic only today. So one advantage that, you know, the regulators could support there would be to enable international travel as an example. So Porter's taking the risk now, adding a lot of domestic travel in a city that needs it. Of course, airlines, it takes time to, when you add flying, to become profitable, right? So we have to now go into the city of Montreal. We have a huge marketing campaign. We're making a lot of investment to build awareness. Hey, Montreal, there's another airport option for you now, and here's where it is. We're very happy with the results so far, but I think we need more people traveling. We need the government to support competition by enabling and unlocking challenges and barriers like enabling international travel as we make some of these infrastructure The other thing I would say is, you know, competing in Canada is a challenge. Porter is in a unique position, and 100%, we've been very successful expanding. Porter was established in 2006 and grew with a fleet of 29 aircraft through to 2019, was a small regional player based out of Billy Bishop Airport, and had a presence into eastern Canada, the US. Coming out of the pandemic, we have grown tremendously, and since 2019, we moved from— grew from 2.3% of the domestic market to today, we're at 13% of the domestic markets with these wonderful new Embraer jets that we've taken on. But Porter's unique. I think, you know, if you look at Canada's recent history, we've had over 8 airlines fail. One as recently as 2 years ago, Lynx, failed. Lynx was backed by Indigo Partners, who I think many in the room would say You know, if an ultra-low-cost carrier will be successful, likely Indigo Partners can make that happen. Unfortunately, that wasn't an option there, but I think Porter's unique. We have an infrastructure component to our business, but it's certainly not an easy environment to grow in.

Robert Kokonis:That's a good point about Lynx, because I'm actually holding in my hand a pen from Swoop, which was WestJet's low-cost, ultra-low-cost division, And a couple of years ago, WestJet made the decision to roll Swoop back into mainline, and the Chief Commercial Officer at WestJet had made the point that it's very tough in Canada to support a fully— a full-blown discount carrier. So you did kind of allude to affordability in that response. I want to move to Minette and Jennifer, which I think, Minette, you and I have talked about how is Canada really more expensive, or is it just we're structured differently. We have, we have the, the cost in different buckets. For example, if I compare us to the American market where air transport security is funded differently, where the FAA funds air navigation services differently, um, what's your thought about that? But at the end of the day, from my perspective, if I'm always thinking about how can we grow the economic output of our air transport system, if we produce $150 billion a year Economic output or GDP. How can we make that $200 billion? How can we bring more services to some of the regions? I see the CEO of Fredericton Airport here at the front of the room. How can we help Joanne get more service? So is there anything on the, on the cost front, again with that caveat, maybe we don't really have a more expensive system. Eddie said himself, user-paid system's working. So what is it we need to do as we're all driving towards the same objective?

Monette Pasher:Yeah, I mean, I would say the cost to run an airport in Canada is about the same as the cost to run an airport in another country. Like, our cost, you know, we benchmarked, we're about similar when you take in geography and you look at all of the metrics, but that's just the airport piece. I think what's different is how the sector is supported. So that is really the piece that is not as robust in Canada. When we have the US and they went through the pandemic and they received $40 billion in infrastructure funding, our airports did receive some support and we had rent relief for a few years and there was ACIP funding and there were some infrastructure funding at a much smaller— it might be like 10% compared to what the US received. The systems are different. The cost is the same. It's just the level at which it's supported underneath that. Maybe we need to look at the essential pieces of it more and say, okay, how could we help? How could we help the North, which we're seeing that fund come out there? Or how can we help? You know, one of the things I think about is, you know, as our country saying, okay, let's invest in making Canada a better country. We want to grow our trade exports and double those. Well, we can't do that without air. This is high, you know, high-value goods that are shipping out of our airports in the belly of aircraft. 50% of it's in the belly of aircraft, and we need to support the infrastructure that supports that growth. So yes, the government needs to invest in rail and roads and ferries and ports, and they do a great job at that, but we also need to look at the economic return from this sector. So I think it's just about that support balance.

Robert Kokonis:Yeah, I like the word balance. It's great. Jennifer, what do you have to say to that?

Jennifer Little:No, I think, I think that's exactly right.

Monette Pasher:Right.

Jennifer Little:It's in everything, trying to find that balance and making sure that we're, as a government, creating the conditions in which all of the elements of the ecosystem can thrive. And we've had, I'd say, mixed success, including with respect to the entry of new carriers, as you mentioned. Like, Porter has been a great success. Previously, like Monette, I like to look backwards. 20 years ago, Canada had really 2 main carriers. We've got, with the addition of Porter, we've got WestJet— with, sorry, Air Transat, Flair, which is our low-cost carrier. Yes, we did have other ultra-low-cost carriers enter the market and unfortunately leave. So from, again, from a policy perspective, we're taking a look at the conditions that allow these carriers to thrive. What do they need? And there are tools that we are using as well in the context of trade expansion that we hope can help our carriers as as well, recognizing the importance of cargo, our air transport agreements, negotiating broader cargo rights, concluding air transport agreements with a number of new markets, including very recently to open up new markets for our carriers and allow more access points to Canada. So we take a look at sort of the gamut of tools that are— that the government has in its hands. But I do agree, and I do think that some of the work that we're doing in the context of taxes, fees, and charges, Also, perhaps taking a look at, you know, foreign ownership limits. Have we got that calibrated correctly? There are a lot of puzzles that the government can sort of dig into to see if there's more that we can do to help support the industry and incent more Canadians to travel by air.

Robert Kokonis:Eddie, go ahead, please jump in.

Monette Pasher:Can I pick up on the low-cost carrier piece? I just, you know, from our airport's perspective, we loved having Lynx in the market and Flair in the market. Like, the more competition— we see a totally different traveller in our airports, and I've heard this from so many of our airport leaders, like families that never got to come home in a decade. Like, this is totally what we want to encourage. I think that's fabulous. The challenge for our country is also the stage length. Like, when we looked back at, like, Lynx and why things didn't work, like, that was a big challenge. Like, we don't have the population density that they have in Europe, and our population is so spread spread out, so they're moving, and Flair as well, like a lot longer stage length on a low-cost carrier. So it is— there's many different things, and taxes, fees, and charges affordability is one of it, and then the other is also our geography and our population density, and I think it's a combination of all of it.

Robert Kokonis:There's only so many routes in Canada that really you can connect point to point, which low-cost carriers do, but it's another reason why in Canada all of our carriers have to shift a lot of their capacity in the winter. It's all southbound because the domestic market really slows down. Eddie, you and I were talking briefly about, you know, is it, is it a challenge to start up a carrier in Canada? And I think all of you have sort of touched on the fact that Porter, after launch in 2006, and then of course the big, the big boom after 2019 with the Embraer jets coming in, you have been a success. It also takes me back to a time when your founder, Robert Bob DeLuce, he mentioned at an award he won a couple of years ago that look at people say there's a lack of risk capital in Canada, but Porter arguably had the best financed startup in Canadian aviation history. So that leads to the next question, which is do we need to do things like you know raise? So Canada's ownership foreign owners direct foreign ownership cap right now is 49% maximum, but no one shareholder can own more than. 25%. So there has been talk, do we raise that cap? It was one of the recommendations in the 2016 review of the Canadian Transportation Act called the Emerson Report. Do any of you want to weigh in? Do we need to have a change at this stage to foreign ownership limits to get access to more risk capital? Or as one of you said, hey, Indigo Partners, they're preeminent ULCC incubator with a couple of Canadian Canadian private equity firms couldn't make Lynx a go. So anybody want to weigh in on that thought?

Edmond Eldebs:I'm happy to take that one. Sure, at least start. So I think getting access to more risk capital is always a benefit for any country, and so the short answer is yes, I think there is a benefit for us to lift that foreign ownership restriction. I think, you know, there are, have been, historic, recent historic examples where that 25% foreign ownership limit has been expanded to allow 49% ownership in certain instances. So there is, there's a precedent there that was set recently, I believe. But I don't think that's the true solution. I think some of what Monet mentioned here is, you know, the long sector length is unique. I think the getting these families that are now traveling because of the ultra-low-cost carriers out there, that's what we're talking about here, because when you look at— let's use a Toronto-Ottawa, which is a very short sector, as an example. Toronto-Ottawa is about a 45-minute sector, one of the largest market— domestic markets in Canada. Ottawa is the nation's capital, lots of travel going back and forth between those two. If you look at a flight right now in late June, Porter, a round-trip flight Toronto-Ottawa is $496. The taxes and fees on that flight are $156, so that's 31% of that 45-minute sector are taxes and fees. One of the longest sectors in Canada, let's say Toronto-Vancouver, that's a 5.5-hour sector, that same— those same dates, that flight costs $800.

Monette Pasher:Mm-hmm.

Edmond Eldebs:And the taxes and fees on that sector are $176. So it's a similar tax structure, tax cost and fee cost for a 45-minute sector to a 5.5-hour sector. I think that's fundamentally the problem. You end up with these scenarios where the shorter sectors get significantly penalized because it's not very financially efficient for a family of 4 or 3 or 2 to And by the way, I love the family.

Robert Kokonis:I always try to put these analogies into that family of 4, you know, before the family car even leaves the house or the apartment, you know, what are they liable for too? And that's what I sort of get after, is there a way to get more people traveling? That's really my objective, because I think we could put more capacity in the Canadian system if there were people actually back to— are they making use of the infrastructure or are they not? Minette, what do you think?

Monette Pasher:Yeah, well, I guess I come back to you on this, and I think really good points. You know, I look at what our government did to support ferries last year. So if you want to go to Newfoundland, you have 2 ways to get there. You can fly, I guess, yeah, to Labrador you could drive, but you can fly or you can take the ferry. So the ferry cost has been cut in half. It's actually hard to get a ferry right now because they've reduced the fares for people, which is amazing. Because that province is an island and it needs access, but we also fly into there, right? And how do we support this sector? So I think that, you know, the same is true for the bridge driving into Prince Edward Island, which used to be a P3, and now that's reduced in cost, or I think free. So I think, you know, we always look at aviation like it's a nice-to-do, not a must-do. And, and we must have it in our country. So I do think that we need to all collectively, and I know Jennifer and I talk about these things all the time, to must collectively, you know, shift some of that perspective. It's important.

Robert Kokonis:Jennifer, last word, because we're basically out of time, and I'll— we can maybe have one or two questions, but last word on this.

Jennifer Little:Absolutely agree. There are enormous benefits to be gained for Canada by spurring interest and the affordability of air travel in the country. The economic returns are very, very significant. It is important for Canadians to be able to connect not only to their loved ones from coast to coast to coast, but also to business opportunities. So clearly, clearly here to partner with the industry on this.

Robert Kokonis:Nobody— if you're going to ask a question, don't ask a question, which is on cabotage. I think we would all agree that having British Airways cherry-pick the best routes in Canada and that the other routes in Canada suffer. It's never going to happen. A lot of people point to cabotage, which really doesn't exist very much around the world. To allow that to happen is just not a solution to enhanced competitiveness in our country. There's a lot of other things we've got to be looking at first. I think we would all agree with that. So thanks to my panelists. I know we didn't have a lot of time, but is there anybody who's got a question? Out in the audience, we've got a couple back there. Please, go ahead. Hi, just identify yourself, who you are and where you're from.

Dave Semanchik:Dave Samanchik, a lawyer with the Airline Pilots Association in Washington, D.C. We represent most U.S. and Canadian pilots as well. It's great to see you all here. You read my mind because that's exactly what I was going to ask about, was the cabotage question, but instead I'll ask something else.

Robert Kokonis:Not privatization, please.

Dave Semanchik:No, no, no, but it goes to foreign ownership, which is a little bit of the flip side of the coin that cabotage represents as well. And I was curious to get a little bit more about your views on potentially lifting both the control element of that 25% shareholder limit versus the overall 49%. And just to flag for you that it's a big concern for airline labor, and particularly flight crew, because when you're involved in international operations and your carrier may be effectively controlled by a foreign entity, you as an airline labor union may lack the ability to negotiate terms and conditions of your employment with the real decision makers, who in these cases are often offshore and outside your reach. So I'm curious to get your views, and I wanted to plant a flag for you to think about that issue for airline labor. Thank you.

Robert Kokonis:Good question. I think we've had a few of those examples, for example, establishing British air operating certificates, or a couple of the carriers longer haul between Europe and the US where that's come up. But Jennifer, did you want to respond to that, anything from a policy perspective? Yeah, sure.

Jennifer Little:Just very briefly, you know, thank you very much for the point. It's an excellent point, and of course Of course, you know, as I mentioned, the government is looking at a range of tools that it has at its disposal to sort of support the industry on this affordability question and make travel more accessible. We also, as Minette mentioned, really see the value of ultra-low-cost carriers in allowing Canadians and others that normally wouldn't get on a plane to do so and visit family and friends and even go for, you know, a day's shopping, for example. So there are a lot of really, really important benefits of having a strong national carrier network. Foreign ownership is one of the tools that the government could have, and so of course we're studying the matter, but perspectives such as yours are really important and instructive as we think through sort of the puts and takes of making significant adjustments such as that.

Robert Kokonis:I think also Transport Canada, to be fair, sits atop, I think, a very safe aviation ecosystem in our country and have been making a lot of strides past decade to make improvements on those, and some of those, of course, not always, you know, in line— you know, carriers always trying to be more efficient, for example, maximum duty day provisions, and from a pilot perspective and cabin crew perspective, and how does that square the circle? But so I would just say that from a safety perspective, Canada operates a very safe ecosystem with good standards and regulations. Our cars are regulated, Ed, do you want to say anything from your perspective as the carrier in terms of foreign ownership and whether you could have an entity come in that perhaps using foreign pilots perhaps in the country?

Edmond Eldebs:So I think it's a fair concern that's brought up. Ultimately, I believe that's why there's the 51% requirement in those cases. I think in a lot of cases, a regulator and It wouldn't necessarily be beneficial for the country to enable more than 49% ownership, and the thinking being that 51% ownership should maintain control and ensure that you're making decisions that are in the best interest of the country and region.

Robert Kokonis:We have had seasonal aircraft swaps historically. Transat was doing that for some years. Sunwing, of course, which is now the airline portion, part of WestJet Group, well too, bringing in some overseas fleets from TUI, from Smartwings, from whoever, quite often, correct, with foreign— I think foreign pilots, if I'm not mistaken.

Edmond Eldebs:Some of the Sunwing, I believe.

Robert Kokonis:Some of the Sunwing came in too. So, but good question, thank you. Another question?

Dave Semanchik:Yeah.

Edmond Eldebs:Yep.

David Hutner:Okay, yeah, I'm just curious. You mentioned before the similarities.

Robert Kokonis:Could you just say who you are and where you're from?

David Hutner:Sure, David Hutner from PA Consulting, Yeah. And I was working with previously with Virgin Blue in Australia back when we opened LCC with very long stage lengths and very different— not so different environment except weather-wise. But I'm curious because you mentioned the parallels before with Australia. Australia has full foreign ownership for domestic carriers, has 49% for international. The labor environment is very healthy for the unions. There are tensions like anywhere, but the unions are certainly well protected. What have you learned from them? Because they've got all the same regional challenges, infrastructure challenges that you're facing there. As, like you said, it's probably the closest parallel.

Robert Kokonis:You want to take that on, whether?

Jennifer Little:Yeah, no, no, very— it's an excellent point. Absolutely, we take a look at experiences of other jurisdictions, other countries and regions around the world, and Australia is one of them. There's been sort of, from our estimation, sort of a mixed success in terms of some experimentation with the foreign ownership limit, and certainly there's a lot for us to learn. One of the interesting things we talk about parallels in countries is You know, not to say that Canada is particularly exceptional, but we do happen to have one of the world's largest global competitors as our closest neighbour, which makes us, in fact, a little bit different from Australia when you think about connectivity and the types of commercial carrier activity that takes place day in and day out. So we have to factor in all of these various dynamics as we study the difference.

Robert Kokonis:The Australians have got the ACCC overseeing— actually, they call it light touch. Light touch. regulation, you know, what that can mean. But of course, our table was really set in the 1990s in terms of the governance structure on our airports, for example, and how do you change that midstream. But maybe that's the last question. Minette, do you want to take that on?

Monette Pasher:Well, I guess I would just say, you know, Australia also doesn't have the winters that we have, which is about 30% of our operational costs in Canada. So I think, you know, which is significant, right? When you talk to some of our airports, it's You know, the snowplows are going 24/7 in some of our communities. So there is— there are some structural differences. But, you know, I think there's always things to learn from each other, and we're always comparing ourselves and looking at, you know, what are the pieces that could work here or could help. So I think we need to continue to do that.

Robert Kokonis:Well, I think we've exhausted our time. We're available if anybody wants to chat afterwards.

David Hutner:Thank you.

Robert Kokonis:I'm going to say a few words, but thanks to my esteemed panel. I really had the best 3 people I could think of to do this brief session, and we could sit here another 2 hours— well, 10 hours if it was privatization. We're not going there. But, you know, I think it was great to touch on this and help to inform you a little bit more about some of the issues our aviation system is facing in Canada. So I want you to thank my panelists here.

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