WestJet’s CEO told the Calgary Chamber of Commerce that rising fuel costs are exposing structural cost and market imbalances across Canada’s airline industry.
WestJet has called for a National Aviation Strategy to address mounting cost pressures and a growing market imbalance that it says is weakening Canadian aviation’s ability to absorb fuel-price shocks and sustain investment in connectivity.
Speaking to the Calgary Chamber of Commerce, WestJet CEO Alexis von Hoensbroech warned that rising fuel costs are pushing a system already stretched by cumulative charges and regulatory burden to the brink.
Fuel costs expose structural pressures on Canadian airlines
“That is why the fuel story is not only about fuel. Fuel is bringing to light what was already there: Canada’s aviation system has very few shock absorbers left,” said von Hoensbroech.
Higher jet fuel prices add cost without additional ticket sales, while aircraft, crew, airport and navigation costs remain. Airlines can recover only part of the increase through fares, leaving thin margins to absorb the rest.
WestJet maintains that federal government financing provided directly to some airlines has unintentionally influenced market dynamics, leaving self-funding companies to compete against fares supported by public funding. It said no other country has taken a similar approach.
“We fundamentally believe that governments should not intervene in markets if they want a healthy and competitive industry,” said von Hoensbroech.
Canada ranks 105th out of 119 countries for the cost competitiveness of its airline industry. Von Hoensbroech compared the burden of operating an airline in Canada with the US, citing airport improvement fees that are often $40 in Canada but capped at $4.50 in the US, and Canadian airlines paying all air-navigation costs under a model that is subsidised in the US.
He also pointed to passenger-rights costs, emission offsets, taxes and fees, repeated labour disruptions and minimal COVID-19 support as additional differences from the US.
“We are asking Canada to be bold and strategic in developing a National Aviation Strategy that advances the essential nature of aviation and leads to a competitive, affordable and healthy airline industry,” he added.
Von Hoensbroech cited Calgary as a model for coordinated investment. WestJet serves more than 100 non-stop destinations from the city, nearly twice its pre-pandemic total, and an October 2022 memorandum of understanding with the Government of Alberta formalised its commitments to make Calgary its sole global connecting hub, base its widebody fleet there and expand capacity and routes.
“Calgary didn’t get here by changing one policy. We got here by dreaming big together and lining up every decision behind that goal. Canada can do the same,” he said.
No comments yet