Supplementary Opinion on the Restructuring of the Airline Industry

Efficient, effective and fair priced air service is an essential part of the Canadian economy. In fact, it is presently the most important form of public transportation and the only one in two of our provinces and in all three territories.

As a service, it must be supervised, regulated and ensured by our government. The determination of routes, the classification of carriers, the control of maximum prices and airport safety must be subject to the Federal Transportation Agency.

Carriers, on the basis of their services, must be licensed for international, continental, regional or charter type services. The dominant carrier, as a public corporation, should continue with rules demanding maximum single ownership of 10% of voting shares and be subject to a 33% foreign ownership rule. Regional and charter companies should not be subject to this control.

Competition is to be encouraged but the agency should determine which routes are to be offered or provided as a monopoly to the successful applicant. In such situations air fares are to be approved by the agency.

The dominant carrier that will undoubtedly have most of the international scheduled routes and serve the airports now served directly by Air Canada and Canadian must offer code sharing and interlining with the licensed regional carriers on a fair cost basis. Low fare carriers may also be licensed to offer scheduled services to designated airports. The Federal Transportation Agency will offer licences to regional carriers on the basis of an arrangement to provide service to regional communities on the basis of the service that existed on July 1, 1999.

The control and aggressive expansion and improvement programs of several airport authorities are of concern to many smaller carriers. Landing fees, airport improvement levies and other associated costs to carriers and passengers must be subject to the agency, which would also supervise a fair distribution of airport slots for arrivals and departures.

When the dominant carrier emerges, that carrier must make every effort to accommodate all employees in a fair process. The agency must not tolerate the restrictive practices of some unions that restrict services to many regions of Canada.

All policies and regulations as introduced in year 2000 legislation must be reviewed after a three-year period.