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Aviation History
1987
1987 - 1270.PDF
Canada divided Canada's open skies legislation is in its final stages, and should be law by the end of the year. It slices the country in two, and has divided opinion on whether the much heralded deregulation will be a huge anticlimax. Julia Hayley reports from Ottawa. The Canadian Government, or more specifically Transport Canada, faced a moral dilemma in deciding the fate of the country's air transport. Should it follow the USA's example, throw away all the controls, and let market forces shape air services, or should it protect the numerous bush operators which hop between settlements isolated by miles and miles of uninhabitable terrain? The aim was to create a free market, believed to be best for consumer and airline, but in a country that measures up to 4,000 miles across, stretches from just above 40°N up into the Arctic circle, and is mainly ice, rock, and water, how do you protect the communities which depend for their food supplies on a regular weekly air service? How do you ensure that compa nies like Perimeter Airlines and Northern Cariboo Flying Service keep flying to places like Red Sucker Lake, Gods Lake Narrows, and Tumbler Ridge? The lifeline services are tenuous as it is, and many of the small operators find scratching a living as hard as the inhabi tants do. Freeing the market from all restraints and taking away price control and any form of subsidy might make the operators' incomes even more erratic, and regular air services more sporadic. In the end geography dictated the terms. A Transport Canada official took a large red pen to a map and divided the country in two. It was decreed that most of the territory north of the line would remain regulated, while air services connecting most of the population, concentrated in the narrow band along the US border, would be freed. The National Transportation Act 1987, which will sanction the great divide, has already been passed by the lower house and is now making its way through Senate. All expectations are that it will emerge at least by the end of the year. Almost all of the larger regionals have tied up with one or other of the majors. Air Atlantic is in Canadian Pacific logo while AirBC, below, flies in Air Canada colours Opinion is divided as to what will happen when deregulation actually becomes law in the south. There are those who expect a rash of new airlines to appear which will then either go out of business, or merge with, or feed, the existing carriers. Others say that there is no room for new airlines because the size of the domestic market is limited. They agree on only one thing—air transport in Canada is a different kettle of fish from the situation in the USA. In Canada the consolidation phase has already happened, says Sheldon Stoilen, Canadian Airlines International (CAI) v-p marketing and commercial services, and it has happened much more swiftly than south of the border. That much is true. The year 1986 saw a whole series of merg ers and acquisitions which culminated in PWA Corp, parent of Pacific Western Airlines, buying up the much bigger Cana dian Pacific Airlines (formerly CPAir) to form Canadian Airlines, now a competi tive number two to Air Canada. In the past 18 months both CAI and Air Canada have developed a comprehensive network of feeders through a mixture of part ownership and commercial agree ments. Time Air, Calm Air, Norcanair, Air Atlantic, and Ontario Express now fly in CAI colours. Nordair Metro, Pem-Air and Quebecair count as CAI commercial partners, although Quebecair has yet to finalise the terms of its agreement. Air Canada has four commuter subsidiaries: Air Ontario and Austin Airways (which recently merged), Air Nova and 20 FLIGHT INTERNATIONAL, 25 July 1987
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