5 The following subsections examine some of these fees and charges. 2 Components of Airfares in Canadaįees and charges in the Canadian air transportation system are often said to be among the reasons for the absence, until recently, of ULCCs in Canada. The third section offers insights from academic literature on the potential impact of ULCCs on airfares in Canada. The second section provides more details on three airline business models: the models for full-service carriers, ULCCs and LCCs. The first section focuses on airfares and the various surcharges that are included in those fares. This Background Paper provides information on both airfares and ULCCs in Canada. Nevertheless, it is hoped that the arrival of ultra–low-cost carriers (ULCCs) – airlines that offer even lower base fares and fewer frills than regular low-cost carriers (LCCs) – will put downward pressure on overall airfares in Canada.īill C-49, An Act to amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts, 3 which received Royal Assent in May 2018, eased foreign ownership restrictions for airlines in Canada in an effort to help ULCCs access a larger pool of investment capital. 1 The various fees and taxes on air transportation in Canada are often cited as a key factor in explaining high airfares. Airfares are a perennial topic in Canada, with complaints that Canadians tend to pay much more for a plane ticket than people in other countries.
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