Clear Skies or Ongoing Turbulence? Canadian Airport Policy between Airport Operators, Airlines ...

304 Pages·2015·2.84 MB·English

Clear Skies or Ongoing Turbulence?
Canadian Airport Policy between Airport Operators, Airlines, and the Federal Government

Philippe Villard

A Thesis
In the Department
of
Political Science

Presented in Partial Fulfillment of the Requirements
For the Degree of
Doctor of Philosophy (Political Science) at
Concordia University
Montreal, Quebec, Canada

November 2014

© Philippe Villard, 2014
CONCORDIA UNIVERSITY
SCHOOL OF GRADUATE STUDIES

This is to certify that the thesis prepared
By: Philippe Villard
Entitled: Clear Skies or Ongoing Turbulence? Canadian Airport Policy between Airport
Operators, Airlines, and the Federal Government
and submitted in partial fulfillment of the requirements for the degree of
Doctor of Philosophy (Political Science)
complies with the regulations of the University and meets the accepted standards with respect to
originality and quality.
Signed by the final Examining Committee:

__________________________ Chair
Dr. Elena Razlogova
__________________________ External Examiner
Dr. Éric Champagne
__________________________ External to Program
Dr. Isabelle Dostaler
__________________________ Examiner
Dr. James Kelly
__________________________ Examiner
Dr. Stephanie Paterson
__________________________ Thesis Supervisor
Dr. Patrik Marier

Approved by
_____________________________________________
Chair of Department or Graduate Program Director

_________ _____________________________________________
Dean of Faculty
ABSTRACT

Clear Skies or Ongoing Turbulence? Canadian Airport Policy between Airport Operators,
Airlines, and the Federal Government

Philippe Villard, PhD

Concordia University, 2014

Using the case of Canada’s airport policy, this dissertation seeks to give an account of long-
lasting conflicts between key actors of a policy sector who otherwise do not challenge the core
policies and orientations of their sector and share the same core representations. The argument of
this dissertation offers a response to the paradoxical outcome where a long-lasting policy has
remained stable over time, despite engendering momentous conflicts and tensions between actors
(to the point of threatening the stability of the policy sector) and being attacked by virtually all
actors. This objective is sought by analyzing the Canadian airport sector and its four main
platforms: Toronto, Montreal, Vancouver and Calgary. The Canadian airport sector is highly
puzzling, since long-lasting conflicts over the airport rent, the access to airport infrastructure and
the funding and administration of airport screening have polluted the relations between the key
stakeholders for years, while none of the key actors involved has challenged the main policy
orientations and policy instruments used to regulate the sector. The study of the Canadian airport
sector with a refocused and amended cognitive analysis of public policy framework developed by
Muller and Jobert is really fruitful: it results in a comprehensive analysis of the conflicts, their
nature, the possible ways to solve them, and it also considerably expands the explanatory power
of the cognitive analysis of public policy.

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ACKNOWLEDGEMENTS

I would like to thank my PhD supervisor, Dr. Patrik Marier, for his continuous support,
availability and guidance during the successive stages of the PhD programme. Your supervision
has been a critical success factor in my journey at Concordia, and I appreciate that you accepted
to oversee my PhD studies.
My sincere thanks also go to Dr. Isabelle Petit from Université de Montréal and Prof.
Pierre Muller from Sciences Po Paris: your teachings and advices were the starting point of my
PhD.
Of course, my family played an important role: I would like to thank my parents for
having supported my bachelor and master studies as well as for their trust in my abilities. Special
thanks go to my life-partner Vincens for his faith in my capacity to complete this project and his
support which strengthened my determination to finish the PhD programme.
I express all my gratitude to Julian de la Camara, who offered me the best transition
between the academia and the professional world of air transport. Your immense knowledge of
aviation guided me a lot during my research stages. But most importantly, you have been the best
mentor I could have had, and I value that you are always available to give advices and guidance.
Finally, Concordia has also offered me my best friends I could have had. The time we
spent together meant the world to me, and moving to Switzerland has not been easy. I know that
when the time will come I will be able to count on you for drinks around Concordia. I would like
to mention without specific order Dennis Molina Tapia, Nika Deslauriers-Paquette, Jeremy
Speight, Chris Bourne, Julie Blais, Cherry Marshall, Matthew Flanagan, Renée Saint-Amant,
Émilie Marcotte, Marek Brzezinski, Anne-Marie Comeau, Ali Halawi, Kelly Eubank and
Christina Mocella. My sincere apologies if I forget someone.

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TABLE OF CONTENT

Introduction .................................................................................................................................. 1
A – Setting the Scene: Argument and Contribution of the Dissertation .................................. 1
B –The Empirical Field: a Study of Canada’s Airport Policy and the situation of the Four
Largest Canadian Airports ....................................................................................................... 3
1. Background Elements on Airport and Air Transport Liberalization ................................ 4
1.1. Airports in a Business-Oriented Model…. ................................................................ 5
1.2. … Still Governed by States and Governments .......................................................... 7
2. Significance of a Policy Study of the Canadian Airport Sector ..................................... 10
2.1. A Brief Outlook of the Canadian Airport Sector: Four Global and/or Regional Hub
Airports ........................................................................................................................... 10
2.2. The Puzzling Situation of Canada’s Four Largest Airports .................................... 11
2.3. Three Cases of Conflicts and Tensions in the Sector .............................................. 14
C –Conclusion: Overview of this Dissertation ....................................................................... 17
Chapter I: The Cognitive Analysis, Airports, and Canada ......................................................... 20
A – Approaches to Public Policy Studies and Limits in their Ability to explain Canada’s
Airport Policy ......................................................................................................................... 21
1. Decision-Making and Rationality-Focused Approaches of Public Policy ..................... 21
2. Agenda-Focused Approaches of Public Policy .............................................................. 25
3. Institutions-Focused Approaches of Public Policy ........................................................ 28
B – Analyzing the Cases: Contributions and Limits of Ideas-Focused Public Policy Analysis
Theories .................................................................................................................................. 30
1. Ideas-Focused Approaches: Hall and Sabatier ............................................................... 32
1.1. The Paradigm Approach .......................................................................................... 32
1.2. The Advocacy Coalition Approach ......................................................................... 34
2. The Cognitive Analysis of Public Policy: Theory and Concepts ................................... 35
2.1. The Cognitive Analysis of Public Policy: Theory and Core Concepts. .................. 36
2.2. The Cognitive Analysis of Public Policy: Illustrations ........................................... 43
C. Explaining Conflicts between Actors who Share the same Representations, or the
Contribution to Knowledge of this Dissertation .................................................................... 45
1. Persistent Conflicts within an Unchallenged Referential: A Challenge ........................ 45
2. Contributing to Knowledge: Explaining Persistent Conflicts within an Unchallenged
Referential .......................................................................................................................... 48
3. Cases Selection and Methodology ................................................................................. 52
3.1. Cases Selection ........................................................................................................ 52
3.2. Methodology ........................................................................................................... 54
Chapter II: The Canadian Airport Sector: A Promising Field to Deploy and Improve the
Cognitive Analysis of Public Policy .......................................................................................... 59
A –Identifying the Global Referential .................................................................................... 59
1. The Market-Oriented, Global Referential in Theory...................................................... 59
2. A Specific Market-Orientation of Airport and Air Transport Policies Worldwide ....... 60
B –The Global Referential and the Canadian Air Transport Sector....................................... 63
1. Adjusting the Canadian Airport and Air Transport Sector to the Global Referential:
Highlights from the Mediation Process .............................................................................. 63
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1.1. The Precursor: Lloyd Axworthy’s Redefinition of Canada’s Transportation Policy
........................................................................................................................................ 64
1.2. Enrolling the Experts: The deregulatory Plea of the UBC School .......................... 66
1.3. The Final Push: Doug Young and the Formulation of the NAP ............................. 67
2. The Features of the Canadian Sectoral Air Transport Referential ................................. 70
2.1. A Broad Reorientation of Airport and Air Transport Activities in Canada ............ 70
2.2. The Canadian Sectoral Referential for Air Transport ............................................. 73
Chapter III: The Airport Ground Lease Rents and the User Charges at the Largest Canadian
Airports ....................................................................................................................................... 75
A – The Impact of Canada’s Airport Policy on the Costs ...................................................... 76
1. Airport Funding and Financing before the Change of Referential ................................. 76
1.1. A Brief History of the Funding of Canadian Airports ............................................ 76
1.2. The Necessity of Change: Toward a “User-Pay” Model ........................................ 77
1.3. The “User-Pay”: An Algorithm of the Canadian Frame of Reference .................... 79
B – The Airport Crown Rent as the Source of a Profound Discontent .................................. 82
1. The Rationale behind the Rent ....................................................................................... 83
1.1. The Rationale .......................................................................................................... 83
1.2. Some Data and Background Information ................................................................ 85
2. A Growing Critique of the System ................................................................................. 88
2.1. A Critique from the Auditor General ...................................................................... 89
2.2. A Critique from the Airports ................................................................................... 89
2.3. A Critique from the Air Carriers ............................................................................. 96
2.4. A Critique from the Observers and Analysts ........................................................ 105
3. A Cognitive Dissonance? ............................................................................................. 110
C – The Costs of Canada’s Largest Airports and the “User-Pay” Algorithm ...................... 113
1. The Rent as an Addition to Other Costs ....................................................................... 113
1.1. Other Aeronautical and Non Aeronautical Costs .................................................. 113
1.2. The Debt of Airports ............................................................................................. 118
1.3. Synthesis. The Cumulative Impact of the Rent, the Charges, the AIFs, and the
Debts ............................................................................................................................. 120
2. A Growing Critique over the Governance System ....................................................... 121
2.1. A Critique over the Representation of User Interests............................................ 121
2.2. The Referential: “User-Pay” and “User-Say” ....................................................... 125
D – Conclusion: Assessing the Cognitive Dissonance ......................................................... 127
Chapter IV: Accessing Canada’s largest airports ..................................................................... 131
A – Granting Access to Canadian Airports: From States’ Designation to Global Marketing
.............................................................................................................................................. 133
1. A Brief Background on the Convention on International Civil Aviation and the Legal
Provisions Regulating the Access to Airports for Air Carriers ........................................ 133
2. A Brief Background on Canada: Market Access through Airports ............................. 135
2.1. Bilateralism in Air Services Agreements: A Drastic Restriction on Airport Growth
(1940s-1960s) ............................................................................................................... 135
2.2. A First Relaxation: A Shift in the Designation of Air Carriers and Canadian Cities
(1970s) .......................................................................................................................... 136
2.3. A Second Relaxation: The Deregulation of Air Transport and Further Shift in the
Designation of Cities .................................................................................................... 139
3. The Canadian Referential for Air Transport: Airport Global Marketing ..................... 140
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3.1. The 1994 International Air Policy and the 1995 Open Skies Agreement with the
United States ................................................................................................................ 141
3.2. The “Global Marketing”: An Algorithm of the Canadian Referential for Air
Transport ...................................................................................................................... 142
B – A Puzzling Conflict with the United Arab Emirates over Market Access to Canada ... 147
1. The Dispute .................................................................................................................. 148
1.1. Background: U.A.E.-Canada Aviation Relations .................................................. 148
1.2. Adapting the Content of the ASA Soft Law-Type Instrument? ............................ 151
1.3. The Conflict: A Progressive Escalation ................................................................ 153
2. Behind Closed Doors: The Role of Air Canada and of Airport Authorities in the
Canada-United Arab Emirates Dispute ............................................................................ 155
2.1. An Apparent United Front: Canadian Airlines Operating Scheduled International
Services against the Liberalization of the Canada-U.A.E. Bilateral ............................ 155
2.2. An Obviously Disunited Front: The Divergent Vision of the Four largest Airport
Authorities .................................................................................................................... 161
3. A Cognitive Dissonance? ............................................................................................. 168
C – Canada’s International Air Policy: the Interests of the National Flag (and Its Hub) .... 170
1. Airport Authorities in the Referential: Interests in a Market-Oriented Referential ..... 170
1.1. Airports are Free-Traders ...................................................................................... 170
1.2. The Four Airport Authorities: Common Ground in the Canadian Referential ..... 176
2. A Growing Critique over the Blue Sky: A Factor of Policy Instability ....................... 178
2.1. A Problem of Implementation: Striking a Balance between Airports’ Interests and
Air Canada’s Financial Interests .................................................................................. 179
2.2. A Problem of Conceptualization: The Fifth and the Sixth Freedoms of the Air in
the Policy Framework .................................................................................................. 185
D – Conclusion: Assessing the Cognitive Dissonance ......................................................... 189
Chapter V: Administrating and Funding the Provision of Security and Screening Services at
Canada’s Largest Airports ........................................................................................................ 193
A – Canada’s Airport Security Policy within the Broader Air Transport Policy ................. 195
1. Providing and Overseeing Airport Security in Canada: From a Public to Private Service
.......................................................................................................................................... 195
1.1. A Brief Background on the Airport Security Function before the
Commercialization of Canada’s Airports ..................................................................... 195
1.2. The Commercialization of Airports: A Parallel Movement toward the
Commercialization of Airport Security? ...................................................................... 198
1.3. The Referential and its Algorithms: Market, Privatization and User Pay? ........... 201
2. The 9/11 Terrorist Attacks: A Game Changer for Aviation Security in Canada and in
the World .......................................................................................................................... 205
2.1. A Brief Background on the September 11 Attacks and their Immediate Impact on
the Canadian Civil Aviation System ............................................................................ 205
2.2. The Canadian Response to September 11. The Creation of the Canadian Air
Transport Security Authority: A Shift in the Referential? ........................................... 206
2.3. Charges vs. Taxes: Looking for the Algorithm of Airport Security? .................... 210
B – The Cost and Efficiency of Canada’s Airport Security Services Provision and its Impact
of the Four largest Airports .................................................................................................. 214
1. First Line of Criticism: The High Costs of Airport Screening in Canada in Addition to
Other Costs ....................................................................................................................... 214
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1.1. The Level of the ATSC and the Nature of the Provision of Airport Security
Services ........................................................................................................................ 214
1.2. A General Issue: The Lack of Transparency in the Allocation of Security Costs 218
1.3. The Four Largest Airports: Security Costs… On Top of All Other Costs ............ 221
2. Second Line of Criticism: The Efficiency of the Administration of Screening ........... 225
2.1. The ‘Shared Governance’ Model: Managing CATSA through the Inputs of Its
Stakeholders? ............................................................................................................... 225
2.2. Consultation with Stakeholders: The (non)Integration of Canada’s Civil Aviation
Actors in Airport Screening and Security .................................................................... 226
3. A Cognitive Dissonance? ............................................................................................. 230
C –Safeguarding the Implementation of the Referential Parameters on Security ................ 233
1. CATSA as a Recognized Actor whose Efficiency could be Improved ........................ 233
1.1. The Elements of Success: Training of Screeners and Uniformity of Practices .... 233
1.2. The Elements of Dissensions: The Duplication of Costs ...................................... 236
2. Further Aligning Airport Security Screening with the Referential: Implementing
Safeguards ........................................................................................................................ 238
2.1. Safeguards: At the Core of a Market-Oriented Referential for Air Transport ...... 238
2.2. Safeguards for Airport Screening in Canada ......................................................... 239
D – Conclusion: Avoiding a Cognitive Dissonance and the Future of the Canadian
Referential ............................................................................................................................ 242
Chapter VI: Conclusion ............................................................................................................ 245
A. The Dynamics of Long-Lasting Conflicts within an Unchallenged Referential ............. 245
1. Theoretical and Empirical Premises ............................................................................. 245
2. Conflict over Airport rent and Other Charges: A First Research Outcome ................. 249
3. Conflict over Access to Canada’s Largest Airports: A Second Research Outcome .... 251
4. Conflict over Administrating and Funding Airport Security and Screening: A Last
Research Outcome ............................................................................................................ 253
5. Research Outcome: the Impact on the Cognitive Analysis of Public Policy ............... 254
B. Policy Implications .......................................................................................................... 256
C. Future Avenues for Research .......................................................................................... 258
Annex A. Empirical Evidence for Case Selection ................................................................... 260
Annex B. Some Route Maps of Air Canada, Jazz, and WestJet .............................................. 261
Annex C. A Comparison of Governance models of LAAs and CAAs .................................... 263
Annex D. Global-Sectoral Report According to the Referential Approach ............................. 264
Annex E. The Nine Freedom of the Air ................................................................................... 265
Annex F. Screenshot of a Google Search: “Commercial Aviation Policy in Canada” ............ 266
Annex G. Actor’s Perception of where charges and levies go ................................................. 267
Annex H. List of Interviewees ................................................................................................. 268
Annex I. Abbreviations and Acronyms .................................................................................... 270
Bibliography ............................................................................................................................. 272
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Introduction

This dissertation gives an account of long-lasting conflicts between key actors of a policy sector
who otherwise do not challenge the core policies and orientations of their sector and share the
same core representations. The empirical field of the dissertation is Canada’s airport policy. The
dissertation will demonstrate that the key actors of the Canadian airport sector all share the same
core objectives (the development of Canada’s four largest platforms on the American and
international stages) and share the same core representations of their sector and the way it should
be regulated. At the same time, a few specific policy aspects have created momentous conflicts
and tensions between these actors, and while these conflicts have lasted for the past two decades,
it is surprising that almost no change has happened to ease them and align the policy aspects at
stake with the core policy objectives on which virtually all actors agree.
This introduction will present background elements to the dissertation. First, it will briefly
summarize the argument and the contribution of this dissertation. Second, it will present give an
overview of the evolution of airports and air transport globally over the past 60 years in order to
explain the puzzling situation of Canada’s largest airports. It will also highlight the relevance of a
policy study of the Canadian airport sector.

A – Setting the Scene: Argument and Contribution of the Dissertation

The dissertation asks how key actors of an economic sector can share the same conceptions and
ideas about their sector, while at the same time fundamentally disagree on significant policy
aspects that frame and shape such sector, in a context where these disagreements engender
momentous conflicts and threaten the stability of the sector. More specifically, it offers a
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response to the paradoxical outcome where long-lasting conflicts and tensions between key actors
of a policy sector about specific and easily identifiable aspect of the sector’s policy have not led
to changing these aspects, despite the fact that adjusting these policy parameters would ease the
tensions and stabilize the sector. Responding to such paradoxical outcomes provides a new
contribution to the literature, given that major existing public policy theorizations would rather
expect that, in these situations, a policy change would occur at some point. Different theoretical
perspectives would give alternative explanations (e.g. opening of a window of opportunity,
consideration of actors’ economic interests, incremental changes that usually affect a policy,
etc.), but they would all share the common expectation of a policy change. Empirically, however,
there are many instances where there is no important adjustment of the policy parameters that
engender conflicts, and conflicts and tensions are long-lasting and undermine the stability of the
sector.
This dissertation establishes a theoretical response to explain adequately the drivers of the
conflicts among actors who share the same vision of their sector. By highlighting these key
drivers, it analyzes why a policy that creates momentous conflicts and instability remains stable
over a long period while all its key stakeholders attempt to change it. Our knowledge and
understanding of the policy process needs to be expanded in order to answer adequately these
questions, as current approaches do not allow addressing them satisfactorily. While the lack of
policy change is often studied with the help of neo-institutionalist models, the dissertation rather
embraces a theoretical framework closely associated to important policy changes: the cognitive
analysis of public policy framework. More specifically, this dissertation reshapes the cognitive
analysis of public policy theoretical approach in order to better equip it to handle the afore-
mentioned issue of conflicts in a context of policy stability.
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