You would *think* at the end of the day it would come down to population density.
If Canada had a larger number of people in a smaller area, the invisible hand of economics should work things out, and we'd see pressure for lower taxes on airfare, incentive for more competition, etc.
But as already mentioned, Australia is a great example to compare ourselves against. Similar size of population, spread out over a geographically large space.
And we can see that Australia is able to support lower prices...
Canada:
Toronto to Vancouver = 3355 km
Toronto to Vancouver = ~6 million people between the two cities (depending on what you call Toronto vs the GTA)
Toronto to Vancouver = usual bottom price of about $600 roundtrip after taxes
= 17.88 cents / km
Australia:
Sydney to Perth = 3284km
Sydney to Perth = ~6 million people between the two cities
Sydney to Perth = usual bottom price of about CDN $350 roundtrip after taxes
= 10.6 cents / km
An article regarding airline competition in Australia....
http://www.theage.com.au/news/busine...530620221.html
Quote:
DOMESTIC air travel in Australia has long suffered from a lack of competition.
The industry has always been a virtual duopoly. From the late 1950s until the early 1990s, Australians had the choice of the government's TAA or Ansett. They competed on the same routes with similarly exorbitant fares, among the highest in the world.
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Sound familiar?
Quote:
Tiger Airways, which is backed by Singapore Airlines, will launch domestic services in Australia at the end of October. Its main competitor will be Jetstar, the budget offshoot that Qantas established in 2003 to cater for the low-cost end of the market. Virgin Blue has also said it is toying with the creation of its own low-cost domestic carrier, which would free it to take on Qantas at the high end of the market.
The impact of increased competition is already being felt as Tiger tries to blow Jetstar out of the market with fares such as $59.95 one way from Melbourne to Perth. Jetstar has matched most of Tiger's offerings.
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So essentially, a few low cost carriers were allowed to compete (Jetstar and Tiger) and suddenly Australia found that they could support them, and Ozzies were suddenly able to travel cheaply within their own country.
Although one might be cautious of just how budget you want to get when it comes to airlines...
http://www.channelnewsasia.com/stori...138464/1/.html
Quote:
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Aviation regulators grounded budget carrier Tiger Airways Australia Saturday because it posed a "serious and imminent risk to air safety", throwing the travel plans of thousands of people into chaos.
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It seems like you need at least 3 airlines to make a market competitive. 2 just begs for a duopoly. Prices out in Eastern Canada are a little better than in the West thanks to Porter.