Chapter 7. Transportation
Tourism, freight, and resource industries such as forestry and mining sometimes compete for highways, waterways, and airways. It’s important for governments to engage with various stakeholders and attempt to juggle various economic priorities — and for tourism to be at the table during these discussions.
This chapter has taken a brief look at one of the most complex, and vital, components of our industry. Chapter 3 covers accommodations and is just as essential.
Key Terms
- Ancillary revenues: money earned on non-essential components of the transportation experience including headsets, blankets, and meals
- Blue Sky Policy: Canada’s approach to open skies agreements that govern which countries’ airlines are allowed to fly to, and from, Canadian destinations
- Cruise Lines International Association (CLIA): the world’s largest cruise industry trade association with representation in North and South America, Europe, Asia, and Australasia
- International Air Transport Association (IATA): the trade association for the world’s airlines
- Low-cost carrier (LCC): an airline that competes on price, cutting amenities and striving for volume to achieve a profit
- National Airports Policy (NAP): the 1994 policy that saw the transfer of 150 airports from federal control to communities and other local agencies, essentially deregulating the industry
- Open skies: a set of policies that enable commercial airlines to fly in and out of other countries
- Passenger load factor: a way of measuring how efficiently a transportation company uses its vehicles on any given day, calculated for a single flight by dividing the number of passengers by the number of seats
- Railway Safety Act: a 1985 Act to ensure the safe operation of railways in Canada
- Ridesharing apps: applications for mobile devices that allow users to share rides with strangers, undercutting the taxi industry
- Transportation Safety Board (TSB): the national independent agency that investigates an average of 3,200 transportation safety incidents across the country every year
- Ultra-low cost carrier (ULCC): an airline that competes on price, cutting amenities and striving for volume to achieve a profit
Exercises
- When did the first paid air passenger take flight? What would you say have been the three biggest milestones in commercial aviation since that date?
- If a flight with 500 available seats carries 300 passengers, what is the passenger load factor?
- Why is it difficult for new airlines to take off in Canada?
- What are the key differences between river cruises and ocean cruises? Who are the target markets for these cruises?
- Which cities attract more than 50% of the cruise traffic in Canada?
- What are some of the environmental impacts of the transportation sector? Name three. How might these be lessened?
Case Study: Air North
Founded in 1977 by Joseph Sparling and Tom Wood, Air North is a regional airline providing passenger and cargo service between Yukon and destinations including BC, Alberta, and Alaska. In 2012, Air North surpassed one million passengers carried. Employing over 200 people, the airline is owned in significant part by the Vuntut Development Corporation, the economic arm of the Vuntut Gwitchin First Nation (VGFN). In fact, one in 15 Yukoners owns a stake in the airline (Air North, 2015).
The ownership model has meant that economic returns are not always the priority for shareholders. As stated on its website, “the maximization of profit is not the number one priority,” as air service is a “lifeline” to the VGFN community. For this reason, service and pricing of flights is extremely important, as are employment opportunities.
Visit the corporate information portion of the Air North website and answer the following questions:
- What is the number one priority of Air North? How is the company structured to ensure it can meet its goals in this area?
- What does Air North consider to be its competitive advantage? How does this differ from other airlines?
- Describe the investment portfolio of the Vuntut Development Corporation. What types of companies does it own? Why might they have selected these types of initiatives?
- List at least three groups that have a stake in the airline. What are their interests? Where do their interests line up, and where do they compete?
- In your opinion, would this regional airline model work in your community? Why or why not?
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