WestJet boosts fees after Nav Canada rate hike, warns of further travel decline

WestJet boosts fees after Nav Canada rate hike, warns of further travel decline

WestJet Airlines Ltd. is raising its surcharges on domestic flights in response to a 30 per cent rate increase by Nav Canada, which operates air navigation across the country.

The airline says it has hiked the fee it charges for air traffic control services by between $4 and $7 per passenger, depending on flight duration.

It also says it is looking into an appeal of the rate increase, which is effective Tuesday, and will scrap the surcharge if the move is successful.

“We are deeply concerned the Nav Canada rate increase will lead to a further reduction in the number of travellers,” WestJet CEO Ed Sims said in statement.

“We are sympathetic to their situation, like ours, where a lack of sector-specific federal support has hindered their ability to recover. Burdening travellers who have been severely impacted by this pandemic with incremental costs will only serve to undermine Canada’s economic recovery.”

Air Canada said it is still reviewing the impact of the decision, which Nav Canada announced in May. Transat plans to adjust its fares to reflect the higher cost, rather than include it as a surcharge.

The rate hike represents a “significant additional cost” for carriers, underscoring the “shortcomings” of the country’s user-pay model and hindering the industry’s already uncertain recovery, said Air Canada spokesman Peter Fitzpatrick.

Meanwhile some airports have said they will increase their airport improvement fees by half after laying off hundreds of staff, adding to carriers’ financial worries.

Robert Kokonis, president of Toronto-based consulting firm AirTrav Inc., says the fee boost at Nav Canada will hit travellers trying to visit friends and family the hardest, as domestic business travel has largely dried up.

“These are people that are also suffering economically, and to ask them to come up with an additional X amount of dollars is adding insult to a very grievous injury,” Kokonis said.

The higher surcharge at WestJet could cost a family of four up to an extra $56 on a round trip.

Canada, unlike countries including France, Germany and the United States, has held off on sector-specific support for carriers. Instead Prime Minister Justin Trudeau has rolled out financial aid available across industries, including the federal wage subsidy — now extended to December — and loans starting at $60 million for large firms.

“Ottawa is fiddling while the house is burning. I can’t say it any better. They are all frustrated that nothing is coming out of Ottawa,” Kokonis said of Canadian airlines.

Transat spokesman Christophe Hennebelle criticized Canada’s continued blanket restriction on foreign travellers and called for more financial aid.

“Nav Canada has no other option but to increase its service charge. However, this can only worsen the situation,” Hennebelle said in an email, highlighting the ”complete collapse in passenger volumes.”

To draw customers back to the skies, carriers north of the border have largely done away with change fees until a couple days before takeoff.

In the U.S., United Airlines scrapped its US$200 change fee for domestic flights on Sunday.

This report by The Canadian Press was first published Sept. 1, 2020.

Companies in this story: (TSX:AC, TSX:TRZ)

Christopher Reynolds, The Canadian Press

WestJet

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