Airport costs blamed for slowing Flair’s growth in city Low-cost airline offers more flights elsewhere in Canada next summer By: Gabrielle Piché Posted: 7:00 PM CDT Wednesday, Sep. 28, 2022

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This article was published 27/09/2022 (722 days ago), so information in it may no longer be current.

The high cost of doing business at Winnipeg’s airport has Flair Airlines navigating headwinds in its efforts to increase service in the city, company executives say.

The Edmonton-based low-price carrier released a portion of its summer 2023 schedule Wednesday, touting a 50 per cent year over year growth in operations. While an average of four flights will connect to Richardson International daily — a 20 per cent increase from summer 2022 — travellers in other cities will have more options.

Halifax, Waterloo and Montreal will each see six or more Flair flights daily next summer, according to the airline’s schedule. And at least 13 flights will connect to both Calgary and Edmonton.

Flair builds its network with airport costs in mind, according to Stephen Jones, the company’s CEO, adding it’s something the business can control, unlike the price of fuel.

“To the extent that we have choices as to going into a low-cost airport versus an expensive airport, we really have to limit the amount of capacity we put into high-cost airports,” Jones said.

“To the extent that we have choices as to going into a low-cost airport versus an expensive airport, we really have to limit the amount of capacity we put into high-cost airports.”–Stephen Jones, Flair CEO

The problem in Winnipeg is likely the airport improvement fee, according to John Gradek, head of McGill University’s aviation management program.

The Winnipeg Airports Authority charges a $38-per-passenger AIF to airlines, which is tacked on directly to ticket prices. In July 2021, it was the highest fee of its kind among tier 1 airports (Canada’s largest terminals, including Toronto and Vancouver).

“That amount of money is significant, and that’s probably going to hold back Flair’s ability to offer low-cost travel out of Winnipeg,” Gradek said.

The AIF, taxes and other typical airport charges take a large bite out of discount fares, leaving little revenue for the airline, he said.

“That’s where Flair is saying, ‘We’d rather operate into airplane environments where the AIF is not as high,’” he said, adding the airline will make an exception for cities such as Toronto — which has an AIF of $30 — because it has a bigger market.

The Winnipeg Airports Authority increased its AIF from $25 to $38 early in the pandemic, said Tyler MacAfee, the organization’s vice-president of communications. The fee helps cover infrastructure costs.

“It’s a direct correlation to the financial position we were in,” MacAfee said. “We had to keep the airport open and operating.”

He said he didn’t think the AIF alone would change an airline’s mind about planning; multiple factors contribute to their decisions, he said.

“I’m not sure what comparables they’re using,” he said. “We’re in regular conversation with Flair about service. I think they see some opportunities for them in this market, which is encouraging.”

Other than the airport improvement fee, Winnipeg’s other charges are, largely, on par with the industry, MacAfee said.

Airlines pay a variety of fees, including ones for landing, the loading bridge and ground loading (a minimum $59, $125 and $83, respectively, for planes with 50 or more seats in Winnipeg).

“We don’t want to be charging more fees than we think are necessary to operate the airport,” MacAfee said. “We’re always reviewing that.”

The WAA will look for ways to lessen fees as airport traffic levels increase and finances return to pre-pandemic numbers, he said.

“We don’t want to be charging more fees than we think are necessary to operate the airport… We’re always reviewing that.”–Tyler MacAfee, WAA

Despite having “a high-cost airport,” Flair plans to grow further in Winnipeg, said Eric Tanner, the company’s vice-president of revenue management and network planning.

The airline has had success in stimulating new demand in the city, he said.

Flair will announce more summer routes later this year.

“They’re not going to abandon Winnipeg,” Gradek predicted. “You’re going to see more flights.”

The low-cost airline, which currently has 19 planes, plans to increase that number to 27 by the end of next summer and 29 or 30 by the end of 2023, Jones said.

The company has more than 1,000 employees, and will be Winnipeg’s third-largest domestic carrier next summer, according to its own data.

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché
Reporter

Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.

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