Is Air Canada trying to take over VIA Rail? Advocates raise concerns

A transport advocacy organization is raising concerns about Air Canada attaching itself to a bidding process for a High Frequency Rail (HFR) project happening in Ontario and Quebec.

Last month, the Cadence consortium – which is led by CDPQInfra and AtkinsRéalis, formerly SNC Lavalin – revealed that Air Canada had joined their team, along with French government-owned operator SNCF Voyageurs, for an HFR bid, noting a deadline of July 24.

If successful, Air Canada and its partners would receive a multi-decade operating concession for all VIA Rail's Quebec-Windsor train services.

Conflict of interest & competition

Transport Action Canada, which advocates for passengers and sustainable transport, is taking issue with Air Canada’s involvement, saying it raises questions about conflict of interest, competition and transparency. 

“If Cadence is selected as the winning consortium and becomes the ‘Private Development Partner’ for High Frequency Rail by the end of the year, a multi-decade operating concession for all of VIA Rail’s current Quebec-Windsor corridor train services and the new HFR services would be in the hands of Air Canada and its partners, with the handover to the private sector happening some time during the multi-year co-development period,” wrote the organization in a blog post on Aug. 6.

The group notes how a common concern among passengers is that travelling with VIA Rail is a lot like flying due to baggage restrictions, airline-style pricing models, and queues to board at major stations.

“The redeeming features like generous leg room and world-class customer service might be at risk if any private operator takes over,” the advocacy group writes.

The mounting backlog of air passenger complaints to the Canadian Transportation Agency is also “not inspiring confidence.”

Wing-to-rail alternatives

In Europe, land alternatives are gaining steam as trains replace short-haul flights between cities that have established (and fast) rail connectivity.

Air Canada appears to be on board with this shift, partnering with Austrian, French, German and Swiss railways last year to offer ground connections in Europe.

“By facilitating the use of rail for the short-haul segments of our customers' journeys, we can provide sustainable travel options when touring Europe," said Mark Galardo, executive vice-president, revenue and network planning at Air Canada, in a statement last December when the airline unveiled new wing-to-rail booking options.

Air Canada also has a still-new partnership with Landline to offer branded motorcoach connections to Toronto Pearson from Hamilton and Waterloo airports.

READ MORE: Air Canada unveils air-to-rail booking options for Europe

On joining the Cadence HFR bid, Air Canada said it “will enable the airline to contribute to the harmonious integration of a future intercity rail network with existing airport hubs in the Quebec-Windsor corridor.”

While Transport Action Canada welcomes improved rail-air integration in Canada, they’re questioning if Air Canada joining the HFR procurement is even necessary.

“Implementing connections between a commercial airline and a publicly-owned passenger railway is relatively straightforward, as evidenced by progress in Europe, and VIA Rail’s recently modernized reservation system uses European software that has excellent support for doing so,” the group writes.

“There are also immediate needs for improved VIA Rail services to replace short-haul routes that Air Canada has previously cut like Kingston and Sarnia.”

Four concerns

In an August 7 press release, Transport Action Canada said it contacted Public Services and Procurement Canada (PSPC), outing four concerns.

Firstly, it says that rail-air codeshares should be available equally to all airlines flying into Canada's international airports. “If one airline owns part of the rail service, safeguards would be needed to ensure fairness,” the group says.

Secondly, the group says the government may have given Air Canada access to HFR project data that provides competitive advantages over other airlines and VIA Rail.

Thirdly, allowing one of three shortlisted consortia to reveal major changes in its composition only when it was too late for the others to respond was “unfair,” the group says.

And finally, the group claims that various requests for information about High Frequency Rail – including taxpayer-funded studies that would have enabled well-informed public discussion – were “rebuffed or heavily redacted over the past decade” on the grounds of commercial sensitivity.

“Either the previous redactions were spurious, or sensitive information has now been made available to a current competitor,” the group says.

The organization said it received a response on Aug. 2 from PSPC that only partially addressed its concerns, adding that Air Canada and Cadence were unable to offer further clarification, citing procurement rules.

“It is crucial that Public Services and Procurement Canada ensure that the process is fully transparent and beyond reproach, especially important for the procurement of a project of this scale and that is vitally important to Canada’s future productivity and sustainable prosperity,” Transport Action Canada writes on its website.

The group thinks Air Canada should step back altogether to avoid any further perception of conflict of interest.

It also adds that “it would be unsurprising if other airlines felt preferential treatment was being given to the former Crown corporation and flag-carrier.”

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