Thank you very much.

Good afternoon, Mr. Chair and honourable committee members. Thank you for having us here today.

My name is Alexis von Hoensbroech, and I'm CEO of the WestJet Group. I'm joined by Andy Gibbons, our VP for external affairs.

We all share the same ambition, which is providing affordable air travel options to Canadians. Unbundling our product and making parts of our services optional allows us to offer the lowest possible price to those who need it and who want it. We are happy to discuss the specifics of this and receive feedback.

At the same time, there's strong evidence that a thriving low-fare environment, such as people experience in other regions of the world, can only be achieved if the government takes serious actions to reform this sector. It is time for government to bring down mandatory fees and charges that passengers have to shoulder on top of their airfare to a level that is more in line with other similar countries.

WestJet's track record is unrivalled. WestJet is the company that democratized air travel in Canada. In our 28 years of serving Canadians, WestJet has cut airfares in half. I suspect one would struggle to name many industries that have improved affordability so dramatically and so consistently.

Unfortunately, over the same period of time, government and third party fees and taxes have gone up by two-thirds.

Our latest affordability effort, the ultrabasic fare, was launched this past June to provide Canadian travellers with even more affordable options. Ultrabasic is a brand new fare that offers Canadians an average of 14% savings compared to previous fares for those travelling with just a personal item like a backpack.

While this product was criticized by some, the facts show that it has achieved strong results for customers, our operations and the country. This is not hypothetical. It is data reflecting consumer choice.

Here are some quick facts around ultrabasic. In just six months, over 2.5 million guests have chosen this fare. The reduced airfare has saved Canadians as much as $48 million. According to our guest service, travellers are satisfied with this new option, as they are with all our other products.

Our ultrabasic fare has also positively impacted our efficiency and performance, which I know has been a topic of interest for this committee. The 1.2 million avoided carry-on bags have reduced delays, which occur when there are more bags than there is overhead bin space on a flight. Between this past August and November, we have seen a 54% reduction in delay minutes and a 67% reduction in flights impacted, meaning that more Canadians are getting where they want to go on time.

WestJet prides itself on being transparent about the cost of our tickets. Unbundling our tickets is about providing the most affordable option for those who choose it and not about creating new fares. Our fares are optional and transparent; government and third party fees are not. Before Canadians even buy their tickets, government and third party taxes, fees and charges can add up to as much as $99 to a ticket price. This is more than three times what it is in the United States, where similar charges are around $28.

Canadian charges, fees and taxes go in only one direction: up. These fees are part of Canada's out-of-date user-pays model for aviation infrastructure, where passengers pay more than the services they receive, with a portion of the ticket cost going directly into federal budgets. Moreover, there is little transparency or oversight regarding how these fares are determined or utilized.

These sky-high fees are truly the main hurdle to competition in Canada. We have all seen many new airlines come and go in Canada, with Lynx Air recently publicly linking their demise to the incredibly high government and third party fees and charges.

WestJet believes that the priority area that needs reform and scrutiny is the high cost and burden of these third party and government fees to the public. They are unfair, hurt our ability to compete and negatively impact Canadian wallets. Ultimately, these fees prevent millions of low-income Canadians from using air travel in a country that is so big that there is often no other option to travel but by air.

In closing, Canada has a robust air travel market, but we can work together to make it better. Canada's outdated user-pay model requires comprehensive review and reform. Many countries around the world provide air service and infrastructure at a higher quality and much lower cost. These should serve as a blueprint for a modern and more affordable Canadian air travel sector. Until such review is completed, Canadian regulators should refrain from introducing any additional financial burden to the sector that will further negatively impact ticket prices for Canadians.

Thank you again for having us here today. We welcome your questions and look forward to this discussion.

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