CAW Fights Against More Airline Deregulation

Toronto, Ontario

March 22, 2005


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CAW Fights Against More Airline Deregulation
dated March 22, 2005

 Toronto, Ontario
March 22, 2005
       The Canadian Auto Workers Union is continuing its fight against further deregulation of Canada's airline industry. CAW economist Jim Stanford says bankrupt airlines are the result of too much competition.

 Jim Stanford
CAW Economist

       "The starting proposition that we don't have enough competition in Canada some how is ridiculous. In fact we have too much competition in Canada, That's why we constantly have bankrupt airlines, stranded customers and 10,000 airline workers who have lost their jobs in the last five years."

       In making the union's case to the Federal Transportation Commission which is holding hearings across the country, CAW Transportation director Gary Fane said deregulation has created a lose-lose situation for the airlines, workers, and consumers. 

Gary Fane
CAW Director Transportation

       "We get into this game of "We've got to put more capacity. You put more capacity in and how do you fill capacity? You keep lowering the fares. You keep lowering the fares sooner or later you end up with the problem that nobody is making a profit and if nobody is making a profit, good news you get Jetsgo again." 

        In the past five years over 10,000 jobs have been lost in Canada's airline industry. In addition, Stanford told the commission, there has only been one year of profitability for the airlines since deregulation was introduced in 1987. 

Jim Stanford
CAW Economist

       "From our perspective there's been too much competition domestically as opposed to too little. Figure four of our submission shows the cumulative losses in the airline industry. This includes all publicly traded airlines that we could find data on, and there is only one year since 1990 when the industry made any significant positive profit what-so-ever. The accumulative net losses over that period now exceeds seven billion dollars."

       Stanford said the solution is to control competition and ensure financial adequacy before any new airline is licensed to fly in Canada. 

Jim Stanford
CAW Economist

       "Government should establish an aggregate capacity ceiling in the major domestic routes that limits how much new capacity is brought to the market by new entrants and that way you will at least stop the red ink that's bankrupted so many airlines."

CAW "Fighting Back Makes a Difference."


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