ST. JOHN'S, N.L. — An airport executive in Labrador hopes a new energy deal with Quebec could help attract a competing airline company to the northern region, where flights costs have climbed at more than three times the national rate.
But even if another airline company is enticed to operate in Labrador, Rex Goudie, the Goose Bay Airport Corporation's chief executive officer, believes it will still take work and government action to make airfares in the region more affordable.
"I don't think there's any one solution," Goudie said in a recent interview.
"Particularly for northern regions, like here in Labrador, which is so remote, is that air travel is not a luxury, it's an essential service," he added. "And so one would think there would be programs or policies put in place that would reflect that."
Flight costs in Labrador have increased by 33 per cent since 2019, compared with just nine per cent across Canada, according to an October report commissioned by the Goose Bay Airport Corporation. A return flight from Nain, in northern Labrador, to the provincial capital of St. John's is nearly $2,500.
The southern part of Labrador is served exclusively by PAL Airlines, while Air Borealis, in which PAL is a partner, is the only carrier offering flights in northern Labrador.
Earlier this month, Quebec and Newfoundland and Labrador signed an agreement in principle to build new hydroelectric facilities along the Churchill River in Labrador that could bring thousands of jobs to the region. If the work goes ahead, a competing carrier may be enticed to set up shop in Labrador to serve what may be a large number of rotational workers needing flights, Goudie said.
He and his team are studying the market opportunities available to interested airline companies, but it's a "bit of a balancing act," he said: "If we're looking for new entrants, we don't want to negatively impact our other, existing carriers."
In the meantime, Labrador Affairs Minister Lisa Dempster said she met in October with the Competition Bureau, the federal business watchdog, about flight costs in the region. Her department has also submitted a brief to the bureau's ongoing study of competition in Canada's airline industry, she said in an interview Monday.
"We have an airline carrier that has a monopoly right now in Labrador, which is never good for the consumer," she said.
Dempster and Goudie also provided submissions to the federal standing committee on transport, infrastructure and communities as it reviews the Competition Act and air travel in northern, rural, and remote parts of Canada.
Goudie said his group has asked the Newfoundland and Labrador government to consider launching something mirroring Quebec’s regional air access program, which allows air travel between smaller, remote regions of the province and larger provincial centres for $500 return, with some conditions.
Documents obtained through an access to information request show that an information note on Quebec's program was prepared for Dempster in May. Her department has had "conversations" about a pilot program, "with some parameters, to see how that would go," she said Monday.
The Newfoundland and Labrador government has an agreement with WestJet supporting direct flights between Europe and St. John's. As of Tuesday, a round-trip ticket for some dates in May was about $600, according to the airline's website.
"The flights to Europe (are) frustrating for someone like me, who represents Labrador," Dempster acknowledged. When asked if a similar arrangement could be struck with PAL, she said the agreement with WestJet is not a direct subsidy but a "guaranteed revenue" contract for the company.
"It's a little bit tough to go out subsidizing a private airline company when they're already making profits," she said, referring to PAL.
Dempster said federal departments could help by lowering costs such as landing fees. And she agrees with Goudie that the pending energy deal with Quebec could attract more competition.
"I do believe that an all-of-government approach, all levels of government, is needed to address this right now," she said.
Quebec and Newfoundland and Labrador are hoping to formalize their agreement in 2026. A final report from the Competition Bureau's study on airline competition is expected by June 30, 2025.
This report by The Canadian Press was first published Dec. 31, 2024.
Sarah Smellie, The Canadian Press
