Why the CEO of a small N.L. airline wants the federal government to bail out the big guys
'We're a regional airline,' says Patrick White. 'We need the national airline to connect to'
Patrick White says he understands why many Canadians aren't particularly fond of big airlines like Air Canada and WestJet — but he worries that if they can't make ends meet, the whole system will fall apart.
White is the CEO of EVAS, a small aviation company that operates out of Gander, N.L. He recently wrote a letter to the prime minister advocating a federal bailout of $5- to $7-billion for Canada's national airlines.
The government, meanwhile, has said such a bailout is only on the table if the airlines refund passengers whose flights were cancelled during the pandemic.
WestJet vowed to refund customers in October. Air Canada, which faces a proposed class action lawsuit over non-refunded tickets, has said it will return "refundable fares." Both airlines declined interview requests from As It Happens. Air Canada said in a written statement that it looks forward to sitting down with the federal government to discuss a possible aid package.
Here is part of White's conversation with As It Happens host Carol Off.
Patrick, why do you think Canada's big airlines should get a bailout from Ottawa?
First of all, I would kind of change the word of a bailout, because it's such a negative connotation of some company that failed to do what it should have done to be successful and someone had to bail them out.
But, you know, I know your question is designed around, you know, should the federal government invest into the national airline system to protect the networks for Canadians going forward? And the answer is absolutely they should.
Bailout is the word you use when there are businesses that are in trouble and they need a financial assistance. They can't do it on their own. So you don't feel that there's no way they can survive, if they don't get this support from Ottawa?
The airlines perhaps can survive in some some faction, some small piece of its former self. But the thing is ... if [the national airline system] continues to [shrink], and unless we deal with this, it will only be a shadow of its former self.
So while we may have a couple of national airlines, [they will be] so small that they will fail to meet the needs of our nation when it comes to connectivity and rural connectivity across the trunk of the airports from Vancouver to St. John's.
So you think that if they don't get the support, then the airline industry, the national airlines, will not survive? ... At the end of this pandemic, we won't see the big carriers like like Air Canada and WestJet?
That can happen. And if you just do the mathematics there and see how much companies are losing per day and kind of project out how long that can go on ... where the end of it comes, or where the dog brings up on the chain, is hard exactly to say. But at the end of the day, you can be assured that the national airlines cannot sustain these losses for indefinitely.
Did you say "where the dog brings up on the chain"?
I'm sorry, Carol. Look, when I grew up, we used to haul wood with the dog. So that's coming from a real old fella. So sometimes the dog, [as] we were getting close, he'd be running, so excited to see us, that he'd bring up on his chain. So poor analogy, Carol.
But of course, you know the issue is ... a lot of Canadians think, well, why should tax dollars be going to the big carriers when they haven't bothered to refund the money that they kept when they cancelled flights during the pandemic?
Yep, absolutely. And on a personal level, I can understand people saying that and thinking that.
Airlines fail to be the most beloved of companies. I mean, we interact with them. And, of course, there's all kinds of issues that people have, from delays and lost bags, and they have a long memory of that. So to some degree, our biases here are to say, "Oh, you know, the darn airlines."
But at the end of the day ... if we're going to maintain the national airline standard that we've become accustomed to, then somehow or another ... we're going to have to bail out the network.
This is what the G7 countries have done all around the world.
But the other countries [where] they've done a bailout ... in Europe and in the United States, they are required to give those refunds to people. And now it appears that's what the Canadian government is saying, what Ottawa is saying: We're not going to give a bailout to the airlines unless they give up those refunds. Do you think that that's fair?
It's certainly fair for the government to make that requirement.
I want to ask about your own carrier, EVAS Air out of Gander. How has the business been since COVID hit?
We've been extremely busy in the cargo piece of our business, Carol, and as well, of course, we operate air ambulance aircraft. And because of the reduced amount of flying in the network flying, then the charter business has picked up. But we're also modifiers of aircraft and we do all kinds really cool stuff to modify aircraft for alternate uses. So we've really dug our heels into that and accelerated some of our programs there.
So we're in a pretty good holding pattern, waiting to see what, in fact, is going to happen.
And I have a extreme interest in the national side, because we're a regional airline. We need the national airline to connect to. So if the national airline goes away, then it'll be a like a puzzle, a jigsaw puzzle of hodgepodge regional airlines, trying to connect. So we must have a national airline system.
Ottawa seems to be saying that it wants to see the airlines restore a lot of the flights to different parts of Canada. They want to, again, get every part of the country being served. Do you think that that's possible before we see the end of this pandemic?
I understand that. Canadians feel the same way. I feel the same way.
But at the end of the day, if we want this network to be maintained at a time in very reduced passenger travel, then there is a cost associated with that. And I maintain, Carol, to you and everybody else, that with the money that the national airline system is bleeding now, it is almost impossible. They have to do what they're doing.
If somebody is listening here for the federal government, for the love of God, could you please make sure that you sit down by yourself in a room with these airlines and don't come out until you have a deal?
If it's really important that people get their refunds and that, well, address that in the deal. If it's really important to have rural connectivity, then address that in the deal. But for the love of God, go sit down with our national airlines and work this thing out and really get it done. It's time to get this done, Carol.
And what do you worry would happen, if Ottawa doesn't get it done?
Oh my, Carol, don't be talkin'. Listen girl, I've had the knots in my gut and I've watched this airplane business for a long time. I've been in this since I had acne and I was a youngster.
If you understand this aviation industry and the huge critical mass of aviation capacity that sits there in the United States, it would be like opening up a small crack in the dam.... You open up a crack in that dam, and that capacity of the U.S. would flow into Canada, and that will be the end of any ... Canadian-owned national airline system.
Well, we'll see if Ottawa is listening to you, Patrick.
Well, now girl, my experience is that I'm not sure. I've failed horribly most of my life to get politicians to listen to me, even though I approach it with with mostly warmth and kindness that our Newfoundland people are known for.
But I really wish, Carol, that they would get serious, sit down and deal with this thing. And enough of the lollygagging and back and forth, for the love of God.
All right. We'll leave it there. And may your dog never bring up on its chain.
Written by Sheena Goodyear. Interview produced by Kate Swoger. Q&A has been edited for length and clarity.