Air Canada Strands PEI

Air Canada has cancelled its Toronto-Charlottetown service because the PEI government has offered WestJet a $500,000 subsidy for a summer-only Toronto-Charlottetown service.

The reason? Air Canada's miffed at the suggestion that its planes don't offer enough legroom:

PEI Premier Pat Binns lashed out yesterday at Air Canada's decision to scrub its Toronto-Charlottetown flights this fall, accusing the airline of mistreating his province by using small planes that cramp the style of tourists.

Mr. Binns defended his government's subsidies for rival WestJet Airlines Ltd., saying the discount carrier's 166-seat Boeing 737-800 aircraft carries passengers in greater comfort than Air Canada's 50-seat Bombardier CRJ-200s.

Air Canada is angry at the PEI government for providing nearly $500,000 in marketing and revenue incentives to lure WestJet to launch summer-only flights between Toronto and Charlottetown. Air Canada will be cancelling flights between the two cities for six months each year starting this October, opting to operate the route only in the spring and summer.

In the bad old days before deregulation and privatization, Air Canada would have had to keep this route, no matter what. But then, Air Canada had to serve a different function as a Crown corporation to guarantee affordable service to all parts of the country much as Canada Post does.

As much as I don't like seeing PEI get the shaft from a bunch of Upper Canadian airline bigshots, Pat Binns has no one to blame but himself.

For a little extra tourist legroom, he's forcing Islanders to pay more to fly through Halifax. He's introduced an unnecessary distortion into the situation and Air Canada is doing the economically responsible thing.

WestJet would likely have come anyway, with or without the subsidy, as it's still a profitable tourist run. Now the whole Island has to pay.

Source: The Globe & Mail