WestJet CEO urges national aviation strategy

WestJet Group chief executive Alexis von Hoensbroech called Thursday for a national aviation strategy, saying Canada’s air system has “very few shock absorbers left” as jet fuel costs climb, the Financial Post reported.

Von Hoensbroech made the remarks in a speech to the Calgary Chamber of Commerce. He pointed to what he called “a growing market imbalance” in Canadian aviation, according to the Financial Post. Global News also reported that he urged a strategic approach at the federal level to help manage a changing industry after a summer of fuel uncertainty.

WestJet said in a statement that geopolitical tensions, including the United States war against Iran, have caused jet fuel costs to double. It said transborder demand is slowing and the Cuban leisure market remains closed.

The airline said higher fuel prices add cost without adding ticket sales, because aircraft, crew, airport and navigation costs stay the same. “Airlines can recover only part of the increase through fares, leaving thin margins to absorb the rest,” WestJet said.

The call for a national strategy came with criticism of how Ottawa has supported some carriers. WestJet pointed to Flair Airlines Ltd., Porter Aircraft Leasing Corp. and Air Transat A.T. Inc., which were approved for federal loans through Canada Enterprise Emergency Funding Corp., a Crown corporation, under the Liquidity for Airline Sector Resilience program. According to the Financial Post, Air Transat and Porter Airlines were each approved for $150 million over four years, while Flair was approved for $76 million over four years.

“We fundamentally believe that governments should not intervene in markets if they want a healthy and competitive industry,” von Hoensbroech said. WestJet said it is proud of three decades of commercially funded growth and of absorbing pandemic-era losses without government funding. “The objective should be durable competition, not a permanent cycle of market intervention,” the airline said.

Air Canada, the country’s largest carrier, reported its own fuel pressures the same day. It released third-quarter results after markets closed Thursday and cut its 2026 outlook. We reported on Air Canada’s $139-million third-quarter profit and lowered outlook on Friday.

According to the Financial Post, Air Canada posted record third-quarter operating revenues of $7 billion. Chief financial officer John Di Bert told analysts that “decisive pricing, capacity and cost actions helped mitigate the impact of a $906 million year-over-year increase” in fuel expense. Fuel prices were 10 cents per litre above the airline’s expectations for the quarter.

The airline cut its 2026 adjusted EBITDA guidance to between $2.4 billion and $2.7 billion, down from a range of $2.9 billion to $3.2 billion. It now expects free cash flow to break even at about $150 million, compared with a previous forecast of $200 million to $500 million. Air Canada said it can offset about 70 per cent of the estimated incremental fourth-quarter jet fuel expense, down from 100 per cent previously, and that about half of its fourth-quarter fuel requirements are exposed to price volatility.

The fuel squeeze has already shown up in route maps and fees this fall. WestJet recently dropped 13 international destinations from its network, and Air Canada added a $30 phone booking fee and dropped five U.S. routes.

Neither airline has said whether further schedule changes or fare increases are planned. Von Hoensbroech did not outline a specific policy proposal in the portions of his remarks reported so far, and the federal government had not responded publicly to his comments as of Friday.

Photo: File photo of a WestJet Boeing 737 landing at Toronto Pearson airport.

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Via the Financial Post (Denise Paglinawan) and Global News.