The High Cost of Flying: Fixing Canada’s Broken Aviation System

In this eye-opening episode, host Chris Glass is joined by airline veterans Bob Cummings and Richard Bartrem, who offer a frank and informed take on the state of Canadian aviation. With decades of experience at the helm of WestJet and other carriers, they unpack why Canada’s air travel system is financially unsustainable, regionally imbalanced, and policy-stagnant. From rising airport fees to ineffective passenger rights legislation, the current system penalizes travelers and discourages investment—all while limiting access to smaller communities across the country.

Bob and Richard call for a nationwide review of the industry that prioritizes governance, efficiency, and economic contribution. They outline how other countries—like Spain, Ireland, and South Korea—offer smarter, more equitable models. Most importantly, they make the case that air travel isn't a luxury, but a critical national infrastructure—one that must be protected and improved if Canada wants to remain globally competitive. If you've ever wondered why flying within Canada is so expensive or why regional routes are disappearing, this episode connects the dots and offers a path forward.

Show Notes:

A. Canadian Transportation Act – Section 5 Objectives   The Canadian Transportation Act is in place to guide policy. The declared objectives are listed in section 5, parts a-e.

B. Bob Cummings & Richard Bartrem LinkedIn post on Canadian air sector reform  Bob Cummings, Richard Bartrem LinkedIn post on needed reforms in Canada’s air transportation.

C. Cummings/Bartrem analysis of IATA’s forecast on Canadian air travel decline  Cummings/Bartrem analysis of IATA’s forecast on Canadian air travel decline.

D. Industry Questions to Political Parties: Read it here A recent letter from aviation industry associations, posing key questions to federal political parties.

Transcript

Richard Bartrem: 0:00

We actually now have an industry that the CTA has set up that they actually can't afford to run.

Bob Cummings: 0:05

Not even eight. You're going to have four major centers in Canada that get some level of benefit, and then the rest of the country is going to suffer.

Chris Glass: 0:14

We're seeing what happens when we rely on other countries to drive our economy for us.

Richard Bartrem: 0:19

It's actually in there. It says this is the declaration, and one of those declarations says that the rates and conditions do not get in the way of actually moving people and goods about the country. It's not user pay, it really is.

Bob Cummings: 0:31

It's well past that, yeah, it's user overpay, user overpay.

Chris Glass: 0:35

Welcome back to another edition of Open Skies Podcast. I am Chris Glass, your host, and I am sitting here with Bob Cummings and Richard Bartram. Gentlemen, I've known you two for a very long time. I've admired your work as an employee at WestJet and it's my honor to have you on the podcast today. So thank you so much for joining us today.

Richard Bartrem: 0:55

Well, thank you, chris. The honor's ours. We've looked with great affection at what you've done with this podcast and it's really interesting to see specifically aviation aviation in Canada and bringing guests that are bringing a fresh perspective to the conversation. So we're looking forward to being part of that.

Bob Cummings: 1:12

Love your style, love your energy, love the topic.

Chris Glass: 1:15

I love talking about aviation because it's one of those things where when you get in the business, it stays in your blood forever. You can have a career before aviation, but very rarely do people have a career after aviation that doesn't involve aviation, because it's just such a dynamic topic and such a dynamic industry. So glad to have you on the show today and we wanted to talk a little bit about the upcoming election, the federal election that's going to be held at the end of April. Here Currently, right now, with all of the tariff talk, all parties are talking about reimagining the Canadian economy, reimagining relationships. I think it's a great opportunity to talk about the aviation industry and the sector in Canada and how we can potentially reimagine that, and you two are starting to show up as experts on this or maybe not experts, but very active members in the conversation. You wrote a very compelling white paper last year and I wanted to have you on to talk about your perspective on where we're going.

Bob Cummings: 2:19

Yeah, all right, Jump in Bob. Yeah, no, I'll start.

Chris Glass: 2:23

So before we get started on, that though, tell us a little bit about your careers. Oh, absolutely, because both of you have had fascinating careers in the airline industry.

Bob Cummings: 2:31

Okay, there's a pre-airline story, but, as you said, it gets in your blood. And that was wireless, which I've followed ever since and that's been fascinating. But I came to WestJet in early 2005, and I came in as VP Marketing and I was lucky enough a year later to move up to the executive table and for 2013 through 2018, a few things move in and out, but for all intents and purposes, I was the EVP of commercial. That title floated around a little bit during that time, so that was all things go to market, marketing, corporate development and just a terrific ride and fell in love with the industry and learned all aspects of it still learning. I left and I ended up going to Central Mountain Air. I was CEO of Central Mountain Air during COVID.

Chris Glass: 3:36

Which was a great time for you, real easy time to do business.

Bob Cummings: 3:41

Yeah, I have my stories. That's a podcast by itself in terms of I think the world's forgetting that in general or there's a lot of psychologists that will and in the future be employed talking through that. But I actually enjoyed that challenge too. That was. It was so unique and, as usual, it's the people part and the memories you take away from that. So unique and, as usual, it's the people part and the memories you take away from that.

Bob Cummings: 4:12

I ended up coming back to WestJet as the president of Swoop, which at the end of my tenure at the first time at WestJet, I ended up with my corporate development commercial role. I ended up in the early stages of bringing it to market and then to come, I came back to it and I spent 20, 21 months at Swoop. We out of COVID revisited the strategy on where the water was going to settle. Of course, airlines had lost a lot of money. Demand went down to 10% and through that period we ended up, for a number of reasons, deciding to roll back into a master brand approach, go back really into WestJet's roots, more of the leisure market and just the reasons that Swoop was set up. They were no longer enough to keep it as a separate entity and I saw that transition through and I've been gone since early 2024 from Swoop, done a few things since, but that's essentially my background.

Chris Glass: 5:16

Now and I think that's going to come in super relevant here, because you've had the legacy side I feel weird calling WestJet a legacy carrier considering the genesis of the company, but sort of a more established airline, a more traditional airline, and then looking at it from the ultra low cost airline side of it. That's going to be really good experience for this conversation coming up. Richard, you have been all over my Facebook timeline.

Richard Bartrem: 5:41

Sorry.

Bob Cummings: 5:43

You were the face, it was just April Fool's.

Chris Glass: 5:46

That's why so on April Fool's, I get about 20 videos of Richard for the WestJet April Fool's Day joke, which was a longstanding thing that they did, which was fantastic. But, richard, why don't you tell me a little bit about your airline history?

Richard Bartrem: 6:00

Sure. Well, it started with WestJet and my entire career, certainly from an aviation perspective was with WestJet. I started in consumer packaged goods. I'm from the other end of the country, or a good chunk of it, from Montreal, born and raised, and my career out of university was in consumer packaged goods for 13 years. Five years of television in Toronto, and then my wife and I, who I actually met while I was working for Unilever in Calgary and we moved to Toronto, we started to talk about wanting to get back to Calgary and at the time the company I was working for didn't have any any businesses out west. So recognize that if we're going to go back, I'm going to have to, I'm going to have to leave what I'm doing today.

Richard Bartrem: 6:39

My wife at the time was working for Coca-Cola, so she went to talk to them and said we're thinking about this. And they said well, we'll find you a job and if we can't find one, we'll make one. So she came home and said I found a job today. What have you done? So it really did come down to finding something altogether different and I have been since I was a kid completely to your point, chris fascinated with the aviation industry. Before 9-11, I would ask, with probably a 60% success rate, if I could fly jump with pilots, which sounds incredibly nuts to say it today.

Chris Glass: 7:12

People don't remember that they don't remember this. So not to cut you off, but one of the stories I have as a CSA is WestJet never oversold their flights, but there would be times with cancellations, gauge changes and stuff like that that you would be oversold and you used to be in the boarding lounge making an announcement saying, hey, I need a volunteer, we'll refund your money and you get to fly up with the pilot Like a random stranger would be right in the cockpit Like crazy back then, but you so 60% was your success rate.

Richard Bartrem: 7:40

Yeah, and I had my spiel down pat in terms of I've either never taken off or landed at this particular airport or this aircraft type, and astonishing the number of times I was successful. Anyway, fast forward to 2005. We're actually looking to move back out west and I had a former colleague, who was a boss of mine, who ended up being president of the advertising agency that had just signed a new client called WestJet. And so I went and had breakfast with him and said do you think they're hiring? And he said well, funny, you should ask. They had a role at the director level that closed yesterday. So if you get me your resume now, I'll see if I can't slip it under the door. And so I ended up being Bob's first hire. So, as he was now starting in, I think, march of 2005, I joined WestJet in June of 2005.

Richard Bartrem: 8:32

And so together we cut our teeth on the industry and learned the economics of it, and learned operationally how the whole thing works and I think for me from a marketing perspective, most importantly, learned that you can have an awful lot of fun, you know, and as the old adage and I can still remember Don Bell saying this you know you can take the job seriously, but you don't have to take yourself seriously. And so I had an awful lot of fun, which then, of course, then leads to April Fool's, and I remember it was I had joined in 05. So our first April Fool's which predates YouTube was just a press release, and it occurred to me that why is it that this airline that's supposed to be so fun isn't doing this sort of fun thing? So the first press release I wrote was that, if you remember the winglets that were being installed on the 737s, what we announced was we had figured out, in conjunction with Boeing, that if you actually assume this winglet position in the cabin for takeoff, it'll actually make the plane more fuel efficient. So we only need you to do this for takeoff. And so a number of newspapers ran with this and radio TV ran with it, and the number of phone calls into the call center saying I refuse to play along, you can't make me sit like this. I paid good money to be on the flight. So we knew we had something and it's been running. In fact, they did one yesterday.

Richard Bartrem: 9:49

Yeah, it was good to see it come back. Well, this is it. It's just nice to see that, despite everything going on in the world, we can still laugh. So I was 17 years at WestJet. I was responsible for marketing communications culture for a period of time, had sponsorship, community investment, so the 17 years I had were a gift and it was just so much fun and I retired in October of 2022, doing my own thing now just a little bit of consulting here and there. But it was time for somebody else to have the fun that I had, and so I'm enjoying this part of it. But that airline piece it sticks to you and so you watch it with great fascination and great attention, even today, I think we have a lot of passion around the team.

Bob Cummings: 10:22

with what I'm hearing, I was just going to say that.

Chris Glass: 10:24

I love the fact that, even post-airline careers, that you guys are still very passionate about the industry that we love, and I want to bring it back to kind of why we're here today and we're here talking about the Canadian aviation space, where we are, what needs to change and what people can do about it. So, uh, I view the ability to connect from coast to coast in Canada to be such an important thing for a country with so little people in it and such vast space. Right, and I've had the blessing of being an employee since I was 20 and having benefits to be able to connect myself to all the different people across our country. Why is this important to most people? Why is a healthy airline ecosystem something that the average person in Canada should care about?

Bob Cummings: 11:17

Chris, I love that you bring the human element.

Bob Cummings: 11:21

You can never kind of kick the early West General out of a person and it's such a human industry and I think we'd probably spend the whole podcast talking about some of those memories. But today it really is essential infrastructure and if you look at its contribution to the economy, I mean it's global industry but it's also flying up north, connecting people. There's so many facets to the value it provides. It's over 3% of the GDP, it's over 100,000 jobs. But if you include actually the supply chain, if you include tourism, which is critical for our economy and we're underdeveloped, I mean, look at BC, look at our whole country, it's over 650,000 jobs. So it's essential infrastructure.

Bob Cummings: 12:15

If you look BC, to Newfoundland, and in particular if you look at the northern half of a lot of provinces, you look at the terrain. You need air transportation, there isn't viable alternatives and it really is essential to connect us both globally through major hubs. And then, if you look at the communities and then the economy, uh, the economy and circling around the economy, back to uh, to today, uh, it's one thing about the tariffs, is it it? It really has kind of like made a step back and look at where we are as a country and where we need to go and, uh, you can spread yourself too thin, too thin. Or you can really look at where do we need to focus to, to, to be successful in terms of our economy and be more independent and sovereign.

Bob Cummings: 13:08

Almost in every conversation there's resources in that. There's mining, there's the energy, there's the oil and the gas and so forth, and that takes air transportation, moving people to get those resources and then in turn taking those resources and building some value-add industries, and how all of that flows through the economy, through people moving and air transportation, whether it be cargo or people or workers, and, as well, exporting. And some of it happens by ship I mean, there's a multimodal transportation plan but some of it happens by air as well, and I certainly saw that at Central Mountain Air. What actually comes out of the north and how important that is. So that's critical visiting family and friends and just connecting people and what that, how meaningful that is, some of those connections that by stepping off a plane and seeing somebody you haven't seen in a long time. It is essential for the economy now you had said something.

Chris Glass: 14:15

I'm gonna ask you, richard, this question um, we view rail as a critical infrastructure that the government should invest in. We view Deerfoot Trail as critical infrastructure that the government should be investing in. Why do airlines not have that? Why do the aviation industry not view our airports and our route structures, and all of that, as a critical industry?

Richard Bartrem: 14:54

Well, and it's interesting that and I don't even know if I have a good answer for that, chris, because it's a fascinating question as to why don't, why doesn't the traveling public, why doesn't government recognize the value of aviation? And in Canada you should, because if you look at the size of the country, it's the second largest country in the world by area, with a population density of four people per square kilometer, and you compare that to the EU. So I'll ignore Russia and broader Europe. But if you look at just the EU countries and the population density there, you're 106 people to four people here, and the EU is roughly half the size of Canada, and yet their catchment area is 750 million people to our 40 million people. So this idea that you're going to be able to solve transportation challenges in Canada with rail is simply not feasible. It may work in pockets where you've got population density Exactly, and you certainly see that it also happens to be where the majority of the seats are from a House of Commons perspective, which is why we see some of the announcements that we see. But at the end of the day, if you look at the degree to which rail has been subsidized in Canada and if you look at it just in the 21st century. Since 2000,. That is nine more than $9 billion has been spent to subsidize passenger rail in Canada and you don't see that to the same degree in air travel.

Richard Bartrem: 16:09

And even just before the election was called they were making announcements about let's take a look at high-speed rail. So we can't even make regular rail work here. We can't get the population density, we don't have the population density, we don't have the infrastructure to make it work. So there is something incumbent in Canada that would suggest that, given the size of the country and the distances that we have to cover, there is no high speed rail that is doing upwards of 800 kilometers an hour and the infrastructure to support that is obvious and it sounds absurd and it is absurd. So there needs to be a framework that properly supports aviation in Canada and we simply don't have it.

Richard Bartrem: 16:48

The why we don't have it is a great question, and it's actually the genesis of the. You know I'll call it a project, small p project, but this is the genesis of the project of Bob and I working together. We're both having now retired from the aviation industry and still dabbling in it in some respects. We would have these conversations. If only the government knew, and if only we didn't have to deal with the fact that the federal government charges rent to the airports for the land that they sit on.

Richard Bartrem: 17:13

There's all sorts of little idiosyncrasies that make Canada unique, its aviation industry unique, and not in a good way, and we wanted to get that story out to say there's going to be an election before October 2025. We didn out to say there's going to be an election before October 2025. We didn't know when it was going to be called, but this is going back to the summer of 2024 and, recognizing that it is coming, we actually have to see if we can move the needle in terms of getting people interested in talking to the member of parliament or who the prospective member of parliament might be, and saying this is important enough to be an election issue. We tried to work with some of the newspapers and the challenge there was. They said well, take everything that's wrong with air travel in Canada and sum it up in four or 500 words at a grade 10 level.

Richard Bartrem: 17:55

And that's part of our you know, that's kind of where we are today as a society is. We have a short attention span and so it's incredibly complex. So the path that Bob and I went down and Bob's brilliant economic mind, or the mind of an economist, and then the strategy side of things, we recognize that this is going to probably be a 5,000 word white paper, which is exactly what it ended up. So we put that on LinkedIn, we distributed across our networks to say here's something worth. We believe worth getting a dialogue started on what needs to be fixed and how we could go about it, recognizing, at the end of the day, that the way we have it set up in Canada from an aviation policy perspective isn't working.

Richard Bartrem: 18:36

And at the short end of the stick is the Canadian traveler. They deserve better. The whole country deserves better economically From a GDP perspective. The country deserves better economically from a GDP perspective. The country deserves better. We're not getting it. So there's a lot of other economic issues that are on the election ballot and we recognize that, but nonetheless it doesn't mean that you don't look at something like this to say, given the size of the country and the economic necessity that is air travel, how do we actually go about fixing that?

Bob Cummings: 19:17

And that's what we hope to try and get to some value-added industries around that, as well as some other I'll call them vertical businesses to really focus its competitiveness and exports and economy in general, as opposed to being spread too thin, which may have been the case in terms of some of the government dollars and where it was flowing, and maybe perhaps not targeted enough being diplomatic at this point, but no matter where we go, if you really look at it, you really are looking at global transportation and the airline industry being a part of that, never mind its own contribution. So, absolutely critical and it doesn't punch near its weight and I always look at this particular context is is it getting the action it needs? Is it getting the dollars it needs? And just quickly, on both fronts, action-wise, I went back through all the bills through 2015 and what the bills have been. They've been largely related to APPR. I can unpack that if you want and Bill.

Bob Cummings: 20:37

C-47,. It gave the government more rights, put the onus on the airlines, but it really is just becoming kind of more and more inefficient as they spend more and more time on it. It's a thousand dollars for a whole flight if it goes amiss. And if you look at canada's geography and how thin the routes are, and then and the snow we had in calgary.

Chris Glass: 20:57

Yeah, and it's over 700 to administer that?

Bob Cummings: 21:02

are we headed in the right path there, especially when you compare it to some other countries? And then, if you look at in the last two years, there's been a lot of energy on Bill C-52, which gives the federal government more rights to airline and airport information for environmental compliance and service standard purposes. No doubt service standards need some accountability, but it really does come after setting the system up to be successful. So the government and we'll get into this, but the government in my mind really hasn't addressed the root causes on why the industry isn't more successful than it is on a comparative basis, as well as its potential, and there's a lot there and it needs to elevate on the agenda and the priority of the federal government in this country, as well as the coordination with really all three levels of government, which isn't unique to the airline industry. Yeah, yeah.

Richard Bartrem: 22:07

Sorry, chris, I was going to say, and I think what adds on to that is and it's a bit perplexing to not be able to figure out why the government doesn't work towards the solutions that could make all of this better, and instead they, you know. So there's a whether you want to use the carrot and stick idea or metaphor, but it seems to be, we're going to use the stick, and so there could be ways that the government could be focused on. Let's figure out efficiencies, let's figure out governance, and we'll talk about that, I would imagine, but instead it's been and Bob mentioned APPR the stick has been we're going to punish you for being late or for a cancellation, and when things don't go right or if people aren't happy, we're actually going to make the fine bigger. And we've made it so cumbersome that we actually now have an industry that the CTA has set up that they actually can't afford to run. So now they want to.

Richard Bartrem: 22:54

They've proposed charging almost $800 just to handle each transaction or each complaint that goes into them, and so now you could see, as Bob said, a fine of upwards of $1,000, plus the administrative fee of $800 that goes on top of that, and you could have on that flight maybe, maybe if it was a good day made four or five bucks a seat and now the in the potential if something goes wrong and, as you said, there's some snow involved there or some other issues that might come across that day. You're now out $1,800 a person when you were actually making $4.

Chris Glass: 23:27

Yeah, when I started in the industry, there was a lot of talk about the structure and the environment being broken. Back then I remember we had a $1 return fare between Calgary and Edmonton. We had it for one day and it turned out to be like an $80 ticket with all the fees and taxes.

Chris Glass: 23:44

And the government's answer to that at the time was we'll do all in pricing, so you can't just show the base fare anymore. We'll hide all the taxes in there. It really didn't solve anything. So I think I know the answer to this question, but I'd like you two to expand on it and give me your color on it. What's the state of the industry right now? Where are we in the Canadian aviation space in your opinions?

Bob Cummings: 24:08

Yeah, we have two root cause issues that we need and I don't use this word lightly, it's an overused word but we need transformation, we need step changes. We don't need patchwork for something way downstream, but we need a real serious industry review. Compared to other countries that have done this better. What's our context, what's unique to us and how do we evolve to a better place for the industry? And the market always speaks there's no capital. I really don't even think I'm exaggerating. Coming into the majority of the space.

Chris Glass: 24:48

People will invest.

Bob Cummings: 24:50

Yeah, yeah, exactly, the market speaks and the market says the environment sucks, I'm not coming in and the trajectory is going the wrong way. And two root causes. The first one I'll call governance and let's get back to that in a second. But the second one it's related but not completely. I'll call it the financial efficiency, but it really is the funding structure of the industry and just a couple I'll unpack that just to touch. We can go further, but let's maybe circle back to governance first. But the unpacking the funding structure, the financial efficiency, is.

Bob Cummings: 25:29

It's really hard to calculate the exact monies collected versus government subsidies and support and what is the net financials of what that looks like. Since I've been off and then throughout my 20 years in the airline industry, I've tried to calculate this number. I think we're around the $2 billion in excess monies through things like the air transportation security charge. Things like the air transportation security charge. Often pre-COVID and I'm assuming it's continuing now there was $100 million plus that was collected versus what was spent. There's a way that the whole airport structure is working with rents in that land and assets were paid for within the first 20 years before 2015. So it really is excess money.

Bob Cummings: 26:29

And then if you look at the list of taxes. I don't think I get to the second hand, but pretty close on PST and GST and excise taxes and carbon taxes and you compare that to really other countries and you compare that to really other countries. It's a case where it's certainly in excess of what is spent on an operating budget for the airline industry in Canada, which I would estimate to be $40 to $50 billion. If you look at the US, on the other hand, mexico, you look at a lot of other companies or a lot of other countries, and you are looking at it being the other way.

Chris Glass: 27:12

There's subsidization in this structure. It's that critical infrastructure point where we invest in it because we get a return.

Bob Cummings: 27:20

It's not it's a GDP multiplier. Every dollar you put in you get $ a half, three dollars back. Even more an estimate on the us, just it would be that, uh, on about a 400 billion dollar budget, it's closer than maybe some people think, but they're. They're probably putting net, I would estimate, three, three billion dollars in into into the industry. It's subsidized, it's and these are healthy, healthy airlines that were supported through COVID, as opposed to our airlines. So quite a different situation on the financial front. And then the first front is governance, and I wouldn't mind circling around governance because I've found in my career it's one of these terms like strategy Everybody kind of has a different understanding of what it looks like.

Richard Bartrem: 28:03

Yeah, let's pretend I have a definition of governance off the top of my head.

Bob Cummings: 28:07

But I do actually have one on the screen because it's an important note here and I wanted to make sure.

Richard Bartrem: 28:12

It was a good conversation, actually, because it is one of those words that you throw around and say, well, we need better governance. What do you mean exactly? So the definition that we came up with is that governance refers to frameworks, processes and systems through which an organization, government or institution is directed, controlled and held accountable. So there's some pretty it's a lot of big words there, but, at the end of the day, it is working together and setting up a framework that allows everybody to integrate in a system, for them to work together, and, at the end of the day, you are measuring, there are metrics and you're held accountable to those, and so the flip side of that is do we have that today within the aviation structure? And, by and large, the answer would be no, and so the pieces go off and do their own things.

Richard Bartrem: 28:52

Covid is a great example of it, where you saw. So this is what March of 2020, all of a sudden, demand falls off a ledge and people aren't moving, and so some of the responses that you saw to that were airports across the country were taking upwards of a 40% increase in their airport improvement fee, and so their solution was going back to governance to say collective. We should look at this to see what is the overall impact on our ecosystem, and we all have an impact on that ecosystem. So you saw certain airports taking massive increases in the airport improvement fee because they saw demand fall off. They get to say, well, we weathered the storm quite nicely, thank you. Because our numbers look like this.

Richard Bartrem: 29:34

The numbers look like that because you actually took in a bigger AIF that actually further dampened demand on an already very fragile industry. You saw NAV Canada take an almost 30% increase as they looked at. So everybody's out doing their own thing and not working together holistically to say is this good for the industry, is it good for the traveling public as a whole? And so everybody just did their own thing. So, bob's right, starting with governance and forgive me for having to cheat with my screen, but it really is it's worthwhile to say let's actually look at how we can hold the entire industry accountable. Right now, what we seem to be doing is holding the airlines accountable, and I think a good example of that is the APPR to just say we're going to back to the stick, we're just going to beat you over the head with it until things get.

Chris Glass: 30:19

We'll continue to morale improve.

Bob Cummings: 30:21

There you go. That's exactly what it feels like, just a little bit of augmentation. On the governance as I got more senior in my career, I could have a little bit more latitude and always found it important to even level set with governance, with boards and the best definition I ever heard old guy who has a latitude to say this sort of thing but and uh, I'm getting there. But it was like, okay, all this governance stuff, it is really just, at the end of the day, are we using resources effectively? There's the system that we've set up and work within, allow that and can we get shit done? And our governance is broken and the frameworks and everything else on how that works is it needs to be reset. It needs a transformation.

Bob Cummings: 31:25

We have a number of ministers, we have nine different acts that feed into the airline industry, on having kind of a say on various parts of it, and we've ended up having piecemeal policies here, in particular over the last 10 years that have been patchwork, as opposed to looking at, okay, the overall system and what it should do and the design of the system to do that. Is that doing that? And if I can, I'd like to just take a minute on. I was involved in the last major industry review, which was end-to-end, and there was there was air transportation as part of a transportation review in 2015. There was to be one in 2021. It got cancelled.

Bob Cummings: 32:14

Yeah, something was going on then, yeah, if you look at any other country, they actually they don't wait. I mean, they're really religious on their interviews. They may have skipped some COVID time, but they're more religious than us in terms of just what does the actual performance look like at the end of the day and is the system doing what we wanted to do? But we're well overdue and if you look at what's happened over the last 10 years, we're in a declining competitiveness position. But going back to the beacon of these nine acts that the industry reports into for security and airports and peace parts of it the beacon of those acts is supposed to be the Canadian Transportation Act. It has five objectives. I'll slightly simplify it, but I'm not being misleading by saying essentially, these five objectives are to build a competitive as part of a transportation, overall transportation approach, which is a topic by itself too, in terms of strategy and how well that's coordinated.

Bob Cummings: 33:23

But is air transportation competitive globally? Uh, and then within canada, with other sectors? Uh, does it contribute to the economy? Uh, as much as it should? Uh, it explicitly says does it contribute to our export economy, because it's a global industry and everything that's around that? Is it efficient, which, yeah, I can talk about that. And then, as well, an objective is does the policy and how this is set up? Does it facilitate the private sector working with the government to optimize resources and approach? And then, not least but the last ones, are around safety and environmental.

Chris Glass: 34:16

Well, it's funny that you're bringing that up.

Bob Cummings: 34:20

I do my own scorecard down from that. I've got it and we've lost our way, yeah.

Chris Glass: 34:25

And that's great. Maybe safety is where I think we're doing a good job on.

Bob Cummings: 34:30

And then what's going on right now is like okay, is the border control, and is that all actually? I think it is. I think that was an excuse for what's everything that's going on, but yeah, no, I think yeah, it's troubling. Well, there's something that's gone amiss from the objectives of the act.

Richard Bartrem: 34:53

But there's another piece in there that I think is interesting, and it says that the rates and conditions don't constitute an undue obstacle to the movement of traffic, and so that's kind of where we focused in on.

Richard Bartrem: 35:03

So it's actually in there. It says this is the declaration, and one of those declarations says that the rates and conditions do not get in the way of actually moving people and goods about the country. And that's exactly where we seem to be stuck is the rates and conditions that we've put in, you know. And going back to the governance, nobody's looking at our system here in Canada and saying, as another country, and saying I want that, I want that, I like that, this is efficient.

Chris Glass: 35:28

No, exactly.

Richard Bartrem: 35:28

And yet we are, and this is the work that Bob and I have tried to do with. This is looked out to say there's a bunch of other places that are better practices than what we're seeing today here in Canada, and if there were a will on the part of the government and on transport to want to do something about this, then that'd be great. You said to me today what was the number, the number of transport ministers we've had since.

Bob Cummings: 35:51

Since January 2021 is five. It's such a complex sector there's no way anybody can develop expertise in that period of time.

Bob Cummings: 36:05

And there's noise around this sucks, appr, do something. And those are the bills that are getting pushed through to empower more and more on that front. Yet if you look at the root cause and then what's at stake? We need to do that review, we need to reset, we need to have a roadmap that takes us to a good place and then have regular reviews and, like most other countries, have the stakeholders weigh in on how are we doing performance-wise, how are we doing versus our objectives? The more service model on how are we doing performance-wise, how are we doing versus our objectives.

Chris Glass: 36:43

The more service model of how are we serving.

Bob Cummings: 36:46

Yeah, what do we need to tweak and how is it working and are we set up to work together? Because the world is about teamwork, whether it's at a corporate level, whether it's at a value chain level, whether it's within your family. The sooner you figure out that the world's about collaboration, the more effective you're going to be and the happier you're going to be.

Chris Glass: 37:07

Yeah, and we hear that now, like just recently with the auto manufacturing tariffs, you know, you hear our government saying you know we're listening to the auto manufacturers, we're collaborating with them, we're collaborating with them, we're working with them. And in my 25-year career with the airlines, I haven't heard that same sentiment come back to our industry. It's more of well, we've got to rein the airlines in, we've got to hold them accountable. It's a tough industry at the best of times, with no barriers to run a successful airline. People don't understand the amount of moving parts this industry has to throw up. These false kind of roadblocks just really cripples it.

Richard Bartrem: 37:50

Yeah, nobody's getting out of bed in the morning in the aviation industry saying I want to suck today more than I did yesterday. And yet that's what?

Chris Glass: 37:56

And I've got a secret fleet of planes that, if you're mean enough to me, I'll be able to get them out.

Richard Bartrem: 38:01

So just if we can make it efficient, and it just requires back to a governance framework that makes it efficient. Sorry, bob, you were going to say Give me some examples of that inefficiency.

Chris Glass: 38:08

right, because we've talked about it and I'd like, if listeners are going to hear this, I want them to take away something tangible to say this is something that's broken that we need to fix that under countries do well so the I'll say, the end view on goals and working together.

Bob Cummings: 38:29

Let me point out some inefficiencies in the system that have been manifested with the system that we have the governance. I look at the airports Airports, of course, they're our friends, but there's a but here I look at a place like Pearson. You can't fly a scheduled flight before 6.30. I think the last flight you can bring is 1 am. I'm pretty sure that I was in the industry, unless it changed the last couple of weeks maybe, but for 20% of the day you can't use the asset. If you look around the world on how airlines use the asset start at 5 in the morning, how late they go, some 24 hours a day and what that means for utilization and efficiency and approach is pretty significant. There's those sorts of rules on utilizing the assets, utilizing the resources, working across the value chain, what it means for effectiveness, what it means for fixed cost structures and the number of flights that you can utilize a plane for and pay it back, and what that means for capital markets. There's a lot to that.

Bob Cummings: 39:58

The other one is just this whole tax issue that's in our country and I did end up comparing to other countries and there are other countries that, believe it or not, are worse, so I'm not going to have hyperbole there. But the comparative group and what we want this industry to do, it is just, it's brutal and I'll take jet fuel for that. We pay 10 cents and the number's higher depending on the province, but we pay at least 10 cents higher a liter for a third of our cost structure, higher than the US. And if you look at 40% of our flights, well, they were into the US and Mexico.

Bob Cummings: 40:46

And I've done a lot of comparison with Mexico too, as a North American community. So that is a major inefficiency that goes back into about a $10 disadvantage for airlines in terms of costs and operating, never mind the funding structure that I talked about, which is about a $40 disadvantage that the traveler's paying for on that ticket, which we can unpack if you want to, yeah, so that's another disadvantage. The third one we've touched on a little bit this whole obsession with APPR over the last 10 years. On the dock at last time for industry reform was foreign investment, it was passenger rights and it was airports and with a government switch halfway through, I was heavily involved, went up for recommendations and then what got put on the shelf for further study and then what ended up coming back two years later which our agility and timeline as a country needs to change as well was quite different.

Bob Cummings: 41:53

The one area we picked to obsess over the last 10 years is really APPR, and we've had various iterations of it trying to get it better. Yet you still look at other countries on how they administer it, what it looks like, the balance of simplicity and the economics. There's no doubt I'm in the airline industry In the last two weeks. You need measures in place to protect consumers from airlines combining flights and all the economic gain that occurs to that. It's just how do you do that?

Chris Glass: 42:29

It seems like some of these acts were designed by people, though, that have never talked to anybody in the industry. Well, they're also siloed, yeah.

Bob Cummings: 42:37

That's a problem? There isn't. Actually, when I refer to nine acts, there's an actually that's part of one act that's siloed. That really doesn't look at the overall pictures of, I'll say, the economics. For the most part, in that case you make less than a cup of coffee for profit. Yet you're penalizing the industry this much and our North American counterparts in terms of trade and a community of interest.

Bob Cummings: 43:03

On travel in the US, it's minimal to none. I mean, you still have to refund or take a bunch of steps within seven days. Same in Mexico. Mexico is actually a little bit more generous than the US. You get a 25% extra flight credit if something happens. But yeah, the order of magnitude compared to our North American counterparts is way out of whack. And then it was like OK, we're going to take best practice, which is Europe Way more dense of a market to recover. The airports perform at a higher level for a few reasons. They really shouldn't be taken personally by anybody out there in the airport space. There's investment in automation and so forth, but it's quite a different context there in general. But we're picking and choosing, I think, the wrong pieces in a siloed way and bringing it back to the right.

Chris Glass: 44:02

It comes back to that patchwork framework that you were talking about.

Bob Cummings: 44:04

Well, it's a patchwork without how do we really focus on the GDP and the economy and being competitive, which is front and center in the original act? Yet we're looking at items six and seven on, you know, and referring to that on the bills, yeah yeah, it's just yeah.

Bob Cummings: 44:26

We really do need to elevate the conversation in this country and the importance of, and the prioritization of, air transportation on the federal agenda. And I, having been in the industry 20 years, I know the value chain will all play ball and, yeah, I'm working collective together and we're all canadians right yeah, and we all, we all want to see.

Chris Glass: 44:52

We want to see a more competitive landscape we want to see lower fares, we want to see all that, richard, I wanted to pick on something you said a little bit ago that I think ties into this. You had had mentioned during COVID that the AIFs jumped. I'm assuming that now that we're out of COVID they dropped those prices back down to pre-COVID levels, correct?

Richard Bartrem: 45:10

No, I don't think so. So the reason why I asked that In most cases no.

Chris Glass: 45:14

Let's talk about the airline ticket right, Because the tax structure that goes into know what? Would the average listener, the average traveler, not know about where their money's going? When I pay $200 for a flight, how much of that is the airline seeing?

Richard Bartrem: 45:31

Well, there's a couple of pieces there and, bob being the economist brain, certainly his perspective would be interesting, but I think as the layperson and I can certainly speak as a layperson there's a couple of pieces that would be there and visible, and then there would be pieces, not there, invisible, that are certainly worth acknowledging. That's critical. Yeah, so you know. Starting first with the idea that if you look at the airport improvement fee, so across Canada you have markets like Abbotsford where the AIF is zero.

Chris Glass: 45:58

Shout out to Parm, friend of the pod, longtime listener, great guy, visit Abbotsford, go ahead.

Richard Bartrem: 46:04

Yeah, and so if you look at the Abbotsford airport, what they are trying to do is figure out ways to drive efficiency in their own ecosystem such that they can turn around to the airlines and say we don't have to charge you an airport improvement fee. And for those of you who know Parm, he's always had a view to how can I actually just make the process and the system? His governance framework within his own ecosystem is remarkable.

Chris Glass: 46:26

Yeah, it's almost obsessive on making Abbotsford the best place for an airline to do business in.

Richard Bartrem: 46:33

Yeah.

Chris Glass: 46:34

And you know it's interesting to see his take on it. But because there's no overall overarching governance, you know it's just Parm and the Abbotsford focus in Abbotsford's bubble.

Richard Bartrem: 46:46

And there are others at zero. But at the other end, the airport improvement fees that are charged by airports are determined by the airports, and so there is no oversight to say, based on the number of passengers that fly through a particular airport or the size of the airline, how many takeoff and departures. It's X, it's just whatever they end up picking. And so you have this wild number that could be anywhere from zero all the way up to $45 as an airport improvement fee that is charged on a per-passenger basis. Compare that to the United States, where it is set across the country at $4.50.

Chris Glass: 47:20

Wow. So instead of paying $45, see. Now I'm angry when you say it that way, when you say $45 versus $4, that actually is quite frustrating.

Richard Bartrem: 47:32

Yeah. And then you also see the level of investment the federal government and Bob can speak to this better than I can but the level of investment that you see in the US from the federal government to actually get into markets and help support those markets properly, you just don't see that here. So you have airports that say, well, we need the infrastructure so we're going to go get it.

Richard Bartrem: 47:49

So we're going to go and raise some money to go and get it done, and so that is a frustrating piece of it and I think the other piece, so that does sit on your ticket and that is visible as the AIF airport improvement fee that is charged by the airline, the piece that would be invisible. Going back to this airport rent and Bob's touched on it, as have I a bit, but the land and buildings that the airports sit on were crown lands until they were actually spun off and run now as not-for-profits. So you have all these airports across the country that are sitting on land and they continue to pay rent to the federal government for the land that they sit on. There is one country in the world that actually charges rent to the airports for the land they sit on and that's Canada. So you know this is not a good one to be shouting we're number one and yet here we are number one as the only ones doing this sort of thing.

Richard Bartrem: 48:34

So it becomes yet another piece that gets added on to the bill and that gets passed on to the airport, obviously, which gets passed on to the airlines and gets passed on to the passengers. That number is $400 million annually. That goes back to the federal government and doesn't, you would think? Then okay, that's going to get earmarked back into a spend towards the aviation industry, it goes into general revenue. So there's all these pieces that the money disappears into the ether, it's not invested back into the market and that back to a governance framework. Where should there be some sort of agreement as to what those numbers should be so that we can actually get that all consistent across the board?

Bob Cummings: 49:13

We just don't have that in place. Ether, and not liking to throw out numbers unless I have some grounding, is that $2 billion, I'll say, excess revenues that are collected? I went and looked as hard as I could into the regional and small markets on okay, what goes back into them.

Chris Glass: 49:37

What's the?

Bob Cummings: 49:38

investment and the amount I came up with was about $150 million, and there's munis out there that I don't have visibility into that are putting money in the system, but it's nowhere near the magnitude that we're talking about. In the $2 billion I'm actually including that. There's some money that I don't have a line of sight to. But back to the, I'll call it financial efficiency or the funding model it is. It's something that okay. Corporations need to be transformed. Times change. They're not competitive.

Bob Cummings: 50:27

People have been there a while. They have paradigms, frickin'. This is where we are. I won't say it's a macro economy, but this is where we are with air transportation. Look at the rest of the world. Look at how they operate, look how they maximize, look how they use private investment into parts of airports, look at their various funding models. Look at how all that works on a budgeting basis, look how it drives efficiency.

Bob Cummings: 50:53

And we've been, in my mind, pretty stagnated. I haven't seen. I'd love to see the progress that's been made on multiple fronts in the last 10 years in particular. But we set up a system in the 90s a change and it hasn't iterated the way it should. It's one thing to go into a system, but you need to iterate it and make it fit for purpose and align with the rest of the world and the changes, and it hasn't. It's been an easy one to just kind of like let's look at EVs, let's look at rail, let's.

Bob Cummings: 51:39

The media has been beating on, I'll say, the airlines in the industry a lot and let's just stay with that sentiment in terms of just making them work harder. Really, the only thing that's going to happen with that is less and less capital investment. If you look at, lynx came into the market one of the preeminent airline investors or owners in the world. They couldn't make it work. I have personal relationships in there with comments that have come back to me. This is public. They're filing for bankruptcy. They lost $70 per passenger in their history, over a 70% negative margin. This you combine it with the relative environment of what's added to the airline ticket for this, what I'll call excess user pay. It's not user pay, it really is.

Chris Glass: 52:44

It's well past that, yeah.

Richard Bartrem: 52:46

User overpay.

Bob Cummings: 52:47

Yeah, it's user overpay, thank you. And if you look at that and then if you look at some constraints in the industry we talked about utilizing the assets. We talked about the taxes. We talked about utilizing the assets. We talked about the taxes. We talked about the APPR in general, the orientation there's no capital coming in either, which is scary and we need to reset the funding, and the financial efficiency is a huge part of that, because this issue takes a lot of capital Airports, planes and so forth and we're not going to get it.

Bob Cummings: 53:32

And the government shouldering 100% of that isn't right either. But if they set up the right environment, they'll get plenty of private investment into airports and other pieces of it and airlines and so forth, and the market will start performing. And you asked earlier about what are some good country models. Some good country models you look at Spain. You look at South Korea a little bit more centralized than maybe we would prefer and you look at smaller markets like Ireland, but I mean there really are comparable markets for a number of reasons, nevermind looking across North America and some best practices.

Chris Glass: 54:09

Yeah, I want to get into some of the solutions to these problems.

Bob Cummings: 54:13

Sure.

Chris Glass: 54:14

Because, as former Westerners, we like to find answers and find solutions Before we do. I want to talk about something that I don't think is a solution. That often gets thrown out, and that's why don't we just open up the Canadian space to like a Ryanair or Ithiad or somebody like that.

Chris Glass: 54:31

They do it well in other countries, why can't they do it well here? I'm sure that would drop fares and make everything better. I know my reasons why I think this is a terrible idea, but I'd like to turn it over to experts and ask you guys why don't we just open up the space?

Bob Cummings: 54:43

well, let me start on that. I've been involved more formally in a number of regulatory proceedings around that that involved a bunch of of numbers yeah, as I describe things to my daughter that way, and she goes okay, numbers, numbers, numbers, lego movie anyways but, um, uh, if, if you run simulations through on various uh opening this up for foreign carriers to to come in, really, this applies to different degrees around the world and that's why you have bilaterals, which I'll explain in a minute.

Chris Glass: 55:23

And I'm not talking about those, I'm talking about just straight cabotage.

Richard Bartrem: 55:27

Cabotage come into your country and do business.

Bob Cummings: 55:29

Well, I'll tell you, what would happen is we have eight centers that have enough density, where you make enough money. You can come in and skim those and you have mature loyalty programs and mature digital capabilities and so forth, besides all the connectivity with airline partnerships and so forth. That, besides all the connectivity with airline partnerships and so forth, where the money that is made by what I'll say Canadian carriers with building domestic markets and Canadian loyalty programs and Canadian vacations arms and Canadian cargo arms and so forth, the market would get skimmed at various levels. You're talking about the Etihad. Yeah, they would skim certain profitable routes.

Chris Glass: 56:19

We're certainly not flying to Brandon Manitoba.

Bob Cummings: 56:21

Yeah, four or five that make a fair bit of money. Air Canada, more so than other carriers, would have their margins trimmed significantly.

Chris Glass: 56:30

Yeah.

Bob Cummings: 56:30

That would mean actually less and less service in Canada because you don't make money domestically. We can talk about that and then if you open it up completely, you wouldn't see much Saskatoon service, for example. You would see Vancouver, toronto and then some connecting into the rest of the world and how that line of flying works. You would see a skim at a very thin level which would not leave any kind of business case left for a domestic operator. And the airline industry is quite unique that way, in that you can move assets around.

Chris Glass: 57:13

Yeah.

Bob Cummings: 57:13

That's what's nice about I'm going to say it. I went this long about this Trump thing. I'll try not to say it again. But you can move airline assets around and be fine.

Chris Glass: 57:24

You're not fixed to flying to the States.

Bob Cummings: 57:28

I saw WestJet added Halifax to Spain as a route.

Chris Glass: 57:32

Yeah, exactly I guarantee you that was supposed to go to Fort Lauderdale at some point.

Bob Cummings: 57:37

So it's a unique industry and if you just open it up where somebody can take the best parts of their business model and then come in and mow the grass, Cherry pick.

Bob Cummings: 57:49

Yeah, you're going to have not even eight. You're going to have four major centers in Canada that get some level of benefit and then the rest of the country is going to suffer In terms of having some balance here, like a lot of countries do around the world, you set up bilateral agreements. How much can you fly in? I can fly into your market. What all does this look like? And then you set up your model to be competitive by your market characteristics. That's very, very common around the world. You look at the smallest fiji to yeah, it's. I mean, the us has bilaterals, it's, it's, yeah, it's. We're used to dealing that way. Uh, the whole full cabotage and what that looks like. I've seen the simulations for that and it's, it's net. It's net, an ugly place.

Chris Glass: 58:43

Yeah, yeah. So that's not the solution. What?

Richard Bartrem: 58:45

is Well. And it's interesting because the other piece that you'll get, some people say, well, you'll get reciprocity. That's no guarantee. So this notion that you know, we're going to.

Chris Glass: 58:54

If you negotiate reciprocity, that's one thing, but that's where you go to the bilateral. Yeah, exactly, if we have open skies with one country, it might make sense to do a deal like that but that has to be a negotiated solution.

Richard Bartrem: 59:05

But already what you're seeing is service to smaller domestic markets in Canada are withering on the vine because it is so difficult to make money flying within Canada domestically that the assets are movable, you end up doing more and more of your flying to points outside of Canada because you stand a better chance of actually making money. So already, without anything changing, we're seeing the challenges in some of the smaller markets where either the frequencies are disappearing or cities are disappearing altogether, and I think for us the solution side of things is there's a bunch we've already identified, there are a bunch of things that we could fix before we have to actually say let's try and just let everybody else come in and fly here.

Bob Cummings: 59:46

And you would see, as Bob said, the simulation show it doesn't work. It's the same with the wireless industry. I went through that in the 90s let's let all the big American guys in here. I went through that in the 90s let's let all the big American guys in here. We went through all the analysis with the government, Industry, Canada, and then the CRTC regulates it on what's the optimal approach there, and it is roaming agreements, which is the same as connectivity in the airline industry, but our own sovereignty in terms of controlling our cellular network, mobile network and the data and everything that's associated with that, and I would call that pretty essential economic infrastructure as well.

Bob Cummings: 1:00:27

I'm glad we made that decision. Just like the airline industry, you have to look at your country and go okay, what do you actually need some control over? What are the economics? And if you cede control and those objectives and those decisions, what are you going to lose? And the education around those kinds of decisions and the true economic analysis on what's optimal and then what you're going to lose and the cost benefit. They need to be done in a real, informed way as opposed to cavalierly being thrown out as solutions.

Richard Bartrem: 1:01:00

Yeah, and I think the piece in there is to say the answer the made-in-Canada solution is here. What we're describing in terms of the fixes that are needed isn't simple and it's not going to be done overnight. But we actually have to have the desire as a country, and we're seeing what's happening with tariffs and all the news about how that's going to upset everything. So that's not the point at which we're now going to say, hey, let's let foreign carriers in here damage the airlines that are already here and are existing here. Let's make them better and let's make the entire system better.

Chris Glass: 1:01:34

We're seeing what happens when we rely on other countries to drive our economy for us.

Bob Cummings: 1:01:39

Well, I think this whole issue of what's occurring now is really bringing to bear that a big part of our problem is the policies we put in place. Yeah, put in place. There's advantages to being small all over the place or smaller scale, versus being smaller and more localized, and what all that brings for benefits. And that's true for the airline industry as well. And if you look at what we can do on the policy front, you look at what we can do on the policy front. Perhaps there's slightly rose-colored glasses on this, but if you go back to 1990s, we're essentially deregulated to X degree. I think at our high point, I think we were all at WestJet. I have a certain year in mind. I'm not going to put it out, otherwise you might get a flood of emails, but I was always looking at.

Chris Glass: 1:02:39

I remember the profit share tax back then. That's how I judged it.

Bob Cummings: 1:02:42

I was always looking at comparators to other countries. I was always doing that as a lens and we at our high point there's hockey. But I'm going to switch it up a little bit. If you look at, the English soccer league would have been pretty close to being in the premier league. Yeah, we might have actually been in there. If you do all our benchmarks now on performance and comparing that to other countries and and contribution and really the the health of the industry as well, we're probably tier three. We're not Wrexham. If you watch the Ryan Reynolds series, they're somewhere down there lower, but we're in danger of being relegated. We are on a sliding curve. That and this is really coming to bear with what's happening the danger of, as opposed to the benefits, the danger of just becoming a small subsidiary or almost an afterthought to optimize of a big parent in the US or some other country that's not a good situation for essential infrastructure because you give that up and we've already given up too much of it.

Bob Cummings: 1:04:00

We're kind of seeing that and this is one of four or five critical industries that we need to get our crap together and reset.

Chris Glass: 1:04:10

The last review you said was done in 2015. Would a review be part of the solution now?

Bob Cummings: 1:04:20

I think this is a pretty complex problem that we have. I think the piecemealing that we've done over the last 10 years has made it worse actually. Yeah, and I do think we need, with the stakeholders at the table, we need an industry review that leans hard on looking at where the rest of the world is and some of the practices there and some of the analogous countries, and look at it's going to be a step change. I believe this country needs transformation. If you look at a $50 disadvantage on a ticket domestically in Canada or from a Canadian airport versus the US on an industry that makes less than a cup of coffee for margin, that's not a good future in terms of where it ends up. So, yes, we need an industry review. If we go back to the actual act and the original objectives and go, okay, we want to be competitive.

Bob Cummings: 1:05:37

We want to be economic, we want to facilitate exports, we want to be efficient. Of course we want to be safe and we want to save our planet. Of course those all apply. But how do we set up a structure that isn't piecemeal and keeps its eye on the ball and moves in a structured roadmap way to a better future, that we can actually point to being competitive with countries, that we should be competitive with roughly the same population and GDP per capita, and so forth, and that, I think, necessitates an industry review, and at the front and center of that is our financial efficiency model with respect to funding and then how those monies are spent.

Chris Glass: 1:06:28

I think the other side of it too is do the review, and once we have the review, do the review and once we have the review, do the actions right.

Bob Cummings: 1:06:41

Well, I, chris, you say that and it's like that's been. The problem, I think not only in the airline industry is, and I'll say it, at the end of it, you have a politician making a decision, yeah and um, if you stay true to the objectives and trust the people who have done all the recommendations and this country has great people, like in all facets of all industries, they will put, they will, you will get good recommendations that balance things appropriately. And then it is, it is putting those actions through. As I said, it's actions and money. At the end of the day, that really, for me, they show the, the priority and how essential this industry is, and with any kind of step change of course, there's going to be some controversy yeah, and being able, having to explain, explain things.

Bob Cummings: 1:07:34

But that's what our politicians should do is be strong, and I'll say it's more of an economic lens than they've had in the past, in terms of just the contribution.

Richard Bartrem: 1:07:47

Yeah, you know. I think the other thing to bring it full circle is this time last year-ish Bob and I started talking about, there's going to be an election, there are changes that need to take place, there's governance frameworks that need to be set up all these things and it does start with a review. The other piece, though, is we wanted to actually give ourselves enough runway so that, if and when and now we're the when an election is called the population at large actually has a bit of information to recognize that the way we run it today you may not like, the aviation industry doesn't like it either, and so there are, we're looking for ways to drive this forward, and politicians will focus on what the electorate, or what the voters want them to focus on, and, as we said earlier, there's a lot of stuff ahead of this on the list. But the point is, as we're entering into I wouldn't say a lot. There's a lot of stuff ahead of this on the list, but the point is as we're entering into it.

Richard Bartrem: 1:08:37

I wouldn't say a lot. There's a handful, but there's still things that are going to be higher up the docket than this. So the challenge is to not let this fall off the docket and or move it higher up the chain, because, at the end of the day, we're looking at productivity challenges here in Canada. We want to get people moving, we want to get goods moving across the country. Aviation is a terrifically efficient way to do it and we need people to talk to their. The person who comes knocking on the door saying will you vote for me? Tell me what you actually have for transportation and aviation policy? And are you talking about it? Because I believe it's important that I can affordably go and visit friends and family or do business at other ends of the country, because right now we are an outlier, and not in a good way.

Bob Cummings: 1:09:20

And Chris, if I point to some other countries, I've looked across Europe, looked at Australia, looked at the US, looked at Mexico. Asia is always interesting to look at in terms of just how service-oriented they are, but they have such dense markets it's almost uncomparable. I point to Spain, I point to South Korea. I mentioned this earlier to South Korea, I mentioned this earlier. I point to Ireland and I'll say that the five pieces, that four or five pieces that differentiate them versus where we are today, that I think we can learn from, are how they use air transportation for their economy and how they have that orientation into various decisions and their structure. Yeah, very kind of humble in terms of setting up reviews and improving things. Thirdly, is every good business and everything that's serving an end customer needs to think about them.

Bob Cummings: 1:10:50

Day has much fewer um adders that don't go to the airline or don't go to to the value chain in terms of funding and sending in. That in this country that's you can do different averages, but it's it's 35, 35 plus. In those countries it's less than 20, so the money flows back into airlines and flying more and what's economical and so forth, and across the value chain and they have that orientation and, as well. All of these countries have done such a better job at their small markets and their regional markets On specific programs. What do they need? What contributes to the economy? What do they need what contributes to the economy? What do they need as a bit of a backstop? How do they fund that responsibly? And there's good programs out there and this country needs to take some of those into this review as well.

Chris Glass: 1:11:48

I'm glad you brought up the regional market because I wanted to leave on one thought. We talked about Comox as one of the. I remember Comox very fondly because back when I first started with WestJet. We didn't fly anywhere. Fun, you know. We flew to a bunch of places in Canada but Hawaii wasn't on the docket. You know, comox was our island destination.

Richard Bartrem: 1:12:07

Sure sure. When we announced it, it was great. That's a good way of putting it.

Bob Cummings: 1:12:13

That was Tofino during COVID. You guys, that's the way you're putting it that was Tofino during COVID. You go surf out there.

Chris Glass: 1:12:16

Absolutely so when we're talking about that regional market, having a healthy ecosystem to nurture those routes. What did that mean to Comox? What are the numbers behind?

Bob Cummings: 1:12:27

that. Yeah, you do have the numbers for sure. Excuse me if I'm off a year or two and you may get emails on this, but I think we went in 2001, 2002, something like that. And when I say we, it's west jet. Yeah, once a west jitter, always a west jitter. But once you leave, you're actually an industry person.

Richard Bartrem: 1:12:42

So right if you're listening from another.

Bob Cummings: 1:12:44

Yeah, but um and then uh. In 2018, when I stopped following the numbers quite as closely as I did for every single year on markets across Canada, there was over, I think, 150,000 people going into it.

Chris Glass: 1:13:04

And you said that was up from 5,000.

Bob Cummings: 1:13:06

Yeah, the 5,000 was the total, and then it went. I mean so whatever that stimulation is, and so you have Deer Lake, you have various communities across the country.

Chris Glass: 1:13:21

It can transform your….

Bob Cummings: 1:13:22

And it's tourism. And then in terms of resources mining, I mean you need a purpose for travel, but if the travel isn't there, the purpose doesn't happen either. It doesn't get a chance to reach its potential, and air transportation certainly has given some places there's still more to go opportunity to reach its potential.

Richard Bartrem: 1:13:52

And there's more.

Bob Cummings: 1:13:54

I mean you look at the seasonality. If there was different economics, a lot more people could go to Cape its potential, and there's more. I mean you look at the seasonality. If there was different economics, a lot more people could go to Cape Breton. I can tell you that from a network construct. If the model was changed in various parts of this great country.

Richard Bartrem: 1:14:04

But look at Fort McMurray and Newfoundland, where you actually needed workers in the oil sands and there were workers in Newfoundland and the traffic back and forth.

Bob Cummings: 1:14:16

And that's not happening on rail.

Richard Bartrem: 1:14:17

The ability for those workers when they have to get out of camp after two weeks at work. You can't sit around and you have to go home. Getting home on a what would that be? Five and a half six hour flight, but you're now back home efficiently, safely. As we've talked about, more of those opportunities for people to move about the country affordably just drives a better economy, and that's what, as a country, we're trying to do is drive a better economy.

Bob Cummings: 1:14:40

Part of that reform and I like to stay in my lane generally, whether it's an executive table or this discussion but part of that reform is, though, you do need a bit of a wider lens on what I'll call multimodal travel. You look at Mexico, great bus system. The government's pretty deliberate on we'll invest in airlines where the terrain or there's bad gangs and so forth, and I might be generalizing a little bit, but very deliberate on where they invest in airlines, how it works multimodally for domestic travel. They've facilitated, or certainly haven't gotten in, the way Airlines recover on buses. They're on the same itinerary, they book on each other, yeah, and same thing in New York with trains and all those sorts of things.

Bob Cummings: 1:15:35

What's optimal, what does that look like, and so forth. And I mean, I mean I'm I'm a proponent that the air transportation system is broken. Let's get started on that. But um, there is.

Chris Glass: 1:15:47

There is a bigger picture of optimization here too so if I'm a canadian who wants to make this an election issue and I want to educate myself more, where can I find more information? So you put out your white paper. Can we go to your LinkedIn pages to find it? Where is a good resource for us to find more information on this?

Richard Bartrem: 1:16:07

Yeah, certainly, from the perspective of what we've written and recognizing that the work that Bob and I did last year and the white paper that we put on LinkedIn, that's data back from September of 2024. So certainly some of the numbers that are in there would have moved and would have shifted since then, but the themes, the central themes to it, hold to this day and so if you want to get a sense of what that looks like, if you want to go so far, you can download it, you can share it, if you want to take it forward to that MP that happens to, or potential MP who might be knocking on your door and say here's a framework. And you know, we're not trying to be so brash as to suggest we have all the answers. What we're hoping to do is start a dialogue that recognizes that we're as I said earlier, we're an outlier in the aviation industry globally and not in a good way. And there's an opportunity, particularly when you are a country that's the second largest in the world by area.

Richard Bartrem: 1:17:01

Air travel for goods and people is a necessity in this country and we're not getting it done effectively or efficiently. And you want the politicians who may become your member of parliament and then, ultimately, the government, to actually have an opinion and actually start to have an action plan that drives it forward. We're behind. We need to catch up. Canadians deserve that and, uh, that's what our ask would be is, at least be armed with some measure of information that bob and I have cobbled together and you can take that to somebody you're looking to vote for and say what's your perspective and the regional market has their own kind of and say what's your perspective on this?

Bob Cummings: 1:17:34

And the regional market has their own kind of view on this too. What you said there is there's an orientation here of change with what's been kind of thrust on us. Let's move to offense versus defense, appr versus what can this frickin' do, and let's make this. Of course you need service levels and so forth, but if you put enough money in the system and all that, those sorts of things, this gets a lot easier. But let's, what can this actually do for the economy and what can this actually do for my own service? And having those conversations and Canada's been, I believe, too insular. If you do look at, for example, you do look at the US. They have the Essential Air Travel Service Program. It's run by the Department of Transportation. It's run by the Department of Transportation. They ask or airlines put it into a bid process to serve rural or small markets. They make a reasonable margin on that. Really, worst case, they break even. Part of the bid process is there's a natural governor in terms of having reasonable fares to be a part of that.

Chris Glass: 1:18:51

Yeah.

Bob Cummings: 1:18:52

And it works. And then you look at I mentioned Spain they look at, they understand the economics. They're big markets, they make money with volume and scale and so forth. They do hive off like a rent structure, not unlike we have. They do hive off some money that goes to smaller markets Right, but you're able to balance the budget and make it work and everybody knows the rules of the game on how all of that works. So, yeah, we need reform, that is, and there's lots of good practices that they can choose out there that are going to work for our Canadian context.

Richard Bartrem: 1:19:28

If you fix those pieces, you know people are saying well, we've cabotaged, we need other airlines. In Said another way, what people would like to see is investment into the country, and what you're seeing right now is based on the framework we have today. You look at that and say why would I take my dollars, which, much like an airplane, are highly mobile and I can invest them anywhere in the world, right? Why would I say you know where's a great place to launch an airline, canada?

Chris Glass: 1:19:51

Because it has such a great track record.

Bob Cummings: 1:19:53

Well as well, it invests in the infrastructure, because if you look at the Ontario Teachers Pension Fund, you look at the public PSP.

Richard Bartrem: 1:20:05

Well, look at London City Airport. So London England City Airport was acquired by a consortium headed by AIMCO, the Alberta Investment Management Corporation, omers, the Ontario Teachers Pension Plan. So you have capital in the country that is actually going to other airports around the world, and that's just one example, london City Airport. But there's other airports around the world where you're seeing Canadian capital go there because they actually see how the and this is friendly capital.

Bob Cummings: 1:20:30

They aren't going to be activists. Yeah, yeah so if we had a structure to bring it into Canada.

Richard Bartrem: 1:20:36

So I don't want to speak for those pension funds, obviously, but they're not seeing something in Canada in the sector that says let's invest here they're doing their own research.

Chris Glass: 1:20:46

They're picking the investments they think can work and they're not putting that money in Canada.

Richard Bartrem: 1:20:49

And that needs to change. So if you want to have better investment into the country, make the system better to invest in.

Chris Glass: 1:20:54

I think we're going to leave it there, because that's a great part to leave it on. Gentlemen, it is my pleasure to have you in here. You both meant so much to me in my career at WestJet, and to have you on the show is a huge honor, so thank you so much for coming in today.

Richard Bartrem: 1:21:07

Well, thanks for the opportunity, Chris. This is great work you're doing.

Bob Cummings: 1:21:09

I really enjoyed it.

Chris Glass: 1:21:11

And thank you for being here on Open Skies After we send out the show, we're also going to link the white paper in the show notes so you can know more information. Make this an election issue and let's make Canada a little bit better when it comes to our economic development through air. Thank you