Will the Churchill Falls Accord bring down high flight prices to Labrador?

The head of a Labrador airport hopes a new energy deal with Quebec could help lure a competing airline to the northern region, where flight costs have risen more than three times faster than the national rate.

Even if another airline is encouraged to operate in Labrador, Rex Goudie, general manager of the Goose Bay Airport Corporationbelieves that it will still take work and government measures to make airfares more affordable in the region.

33% more expensive than 5 years ago

I don't think there is a single solutionunderlined Rex Goudie during a recent interview.

Particularly for northern regions, like here in Labrador, which is so remote, air travel is not a luxury, it is an essential servicehe added. And so you would think that there would be programs or policies put in place that would reflect that.

The cost of flights in Labrador has increased 33% since 2019, compared to just 9% across Canada, according to an October report commissioned by the Goose Bay Airport Corporation.

A round trip flight of Nainin northern Labrador, to the provincial capital of Saint-Jean costs almost $2,500.

The southern part of Labrador is served exclusively by PAL Airlineswhile Air Borealis, of which PAL is a partner, is the only carrier to offer flights in northern Labrador.

A monopoly, never good

Earlier this month, Quebec and Newfoundland and Labrador signed an agreement in principle to build new hydroelectric facilities along the river Churchillin Labrador, which could create thousands of jobs in the region.

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If the work continues, a competing carrier could be tempted to set up shop in Labrador to serve what could be a large number of rotating workers needing flights, Rex Goudie said.

He and his team are studying the market opportunities available to interested airlines, but it is a balance exerciseaccording to him. If we are looking for new entrants, we do not want to have a negative impact on our other existing carriershe indicated.

Meanwhile, Labrador Affairs Minister Lisa Dempstermentioned that she met in October with the Competition Bureau, the federal business watchdog, about the costs of flights in the region.

Her department also submitted a brief to the Bureau's ongoing study on competition in the Canadian airline industry, she said in an interview Monday.

We have an airline that currently has a monopoly in Labrador, which is never good for the consumer.

A program like the one in Quebec?

Lisa Dempster and Rex Goudie also made submissions to the Federal Standing Committee on Transport, Infrastructure and Communities as it examines the Competition Act and air travel to Canada's northern, rural and remote communities.

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Rex Goudie said his group has asked the Newfoundland and Labrador government to consider launching something akin to the Quebec Regional Air Access Program, which allows air travel between small, remote regions. of the province and major provincial centers for $500 round trip, under certain conditions.

Documents obtained through an access to information request show that a briefing note on the Quebec program was prepared for Lisa Dempster a may.

His ministry had conversations about a pilot program, with certain parameters, to see how it would happenshe admitted Monday.

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The Government of Newfoundland and Labrador has reached an agreement with WestJet to support direct flights between Europe and Saint John. A round-trip ticket for select dates in May cost about $600 as of Tuesday, according to the airline's website.

Flights to Europe [sont] frustrating for someone like me, representing LabradorLisa acknowledged Dempster.

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When asked if a similar arrangement could be made with PAL, she said the agreement with WestJet is not a direct subsidy, but a contract of guaranteed income for the company.

It's a bit difficult to subsidize a private airline when it's already making a profitshe clarified, referring to PAL.

Lisa Dempster added that federal departments could help by reducing costs, such as landing fees. She also agrees with Rex Goudie that the current energy agreement with Quebec could attract more competition.

I believe a whole-of-government approach, from all levels of government, is needed to address this problem nowshe argued.

Quebec and Newfoundland and Labrador hope to formalize their agreement in 2026. The final report of the Competition Bureau's study on airline competition is expected by June 30, 2025.