The storm appears to be subsiding for Alberta’s travel industry, but the horizon is shifting as key players find their place in the post-Sept. 11 climate of uncertainty and economic challenges.
One year after terrorists brought aviation to a standstill around the globe, Alberta’s travel sector is gradually rebuilding from a year punctuated by airline financial angst, aviation sector layoffs, security worries, travel agent hardships and cuts to corporate travel spending.
A fierce airline dogfight is heating up as companies such as Calgary-based WestJet square off against giant Air Canada for a declining number of passengers, especially in the competitive no-frills and short-haul sectors.
Later this month, Air Canada’s new western carrier – Calgary-based low-budget airline ZIP Air – is set to take off in a market that has long been a WestJet stronghold.
And just last week, the International Air Transport Association, which represents 280 airlines around the world, warned that air travel numbers will likely get worse before they get better in 2003.
But amid the gloom there is optimism – at least for Alberta. Observers say a thriving local economy has buffered the province from the worst of the turbulence. It has also supported the emergence and expansion of small regional and charter carriers such as Quikair, Peace Air and Swanberg Air.
“Alberta has a pretty strong economy,” notes Brian Schwartzendruber, regional manager of the Alberta arm of the Association of Canadian Travel Agents (ACTA).
“There’s no doubt that it’s a challenging time to be a travel agent, but most of the agents are adapting and some are even thriving. From what the retail agencies are telling me . . . travel is continuing to rebound.”
Schwartzendruber notes travel agents have been hit in the pocketbook because several cash-strapped larger airlines have axed travel agent commissions on ticket sales. ACTA representatives across the country – as well as officials with airlines including WestJet – are also unhappy with the federal government’s contentious $24 security surcharge on each return ticket, which was imposed on air travellers earlier this year. Ottawa is now reviewing the fee.
These issues are fresh on the mind of Gordon Andrews, CEO and chairman of Canada West Airlines, which plans to begin operating flights from its Edmonton headquarters next spring. The airline will run trips from Edmonton, Calgary and Vancouver to vacation hotspots and Europe, but has pushed back its planned fall launch to have more time to woo western investors.
Andrews says financial uncertainties facing airlines, along with the global economic slowdown and threats of war in Iraq, are making some would-be investors wary. But he’s confident that Canada West will become a key player in the West early next year.
“It’s a very difficult environment in which to start an airline, especially since Sept. 11,” he says. “But our contention remains that the market in the West remains underserved, especially in the leisure market.
“We don’t want to rush into the market just to be in the market. Timing is everything.”
Andrews says Canada West isn’t trying to compete with WestJet because it will cater to the holiday travel market rather than short-haul domestic traffic. Most vacation carriers operating now in the West are served by eastern and U.S.-based airlines and charters.
Canada West will be competitive because it will launch without the debt facing other carriers, he says. It will also include its own holiday tour company that will offer flexible package options rather than just one-week or two-week getaways.
Andrews questions how Ottawa is spending the hundreds of millions of dollars it is collecting in security surcharges. U.S. travellers pay about $6 Cdn per trip, compared to the blanket one-way fee of $12 in Canada.
“It’s very disproportionate. Canada is a very safe travel destination. It’s not like we had no security in place before. Let’s just hope that cooler heads prevail,” he says of Ottawa’s review of the fee.
Traci Bednard, corporate communications manager for Edmonton Airports, says officials are working to correct a perception that new security measures have made air travel inefficient or time-consuming.
“It really has improved in terms of time and efficiency. You don’t need to come three hours ahead of time for those short-haul flights like you did after Sept. 11. We’ve all had a year now to implement those additional security measures.”
Edmonton’s airports, like those across the country, are upgrading security equipment and technology, but specific details are not being revealed to keep those measures secure.
Meanwhile, tourism officials say visitor numbers are returning to pre-Sept. 11 levels, especially from the domestic and American markets.
“Actually, we’re surprised it recovered so quickly,” says Tourism Calgary president and CEO Joe Fardell.
“The Americans are starting to come back to Canada because it’s such a safe and convenient destination.”
Fardell says 2003 is not expected to set any records, but will be on par with other years. Much depends on external factors such as the economy and the weather, which will play a pivotal role in the success of Rockies ski resorts this winter.
