9 AIR TRANSPORTATION

FREIGHT TRANSPORTATION

Air cargo is carried in the belly-hold of passenger aircraft, in passenger/cargo combination or in all-cargo aircraft. Because Canada's domestic air cargo market is deregulated, there are no restrictions on routing, capacity or price. Transborder and international air cargo services are covered by bilateral air agreements, other international agreements and national policies. There is currently no Canadian carrier presence in the international (non-transborder) all-cargo air services industry, although cargo is carried in the belly-hold of passenger aircraft.

There are several operators in Canada dedicated to providing all-cargo service, with a total of 50 aircraft and combined revenue in 2002 of $300 million. Air Canada provides air cargo service as part of its scheduled passenger air services. Cargo revenues accounted for 6 per cent of its revenues in 2002. Air NorTerra and First Air also provide air cargo services in the North, along with numerous other smaller operators.

Table A9-11 in the Addendum shows the volume of goods carried by Canadian air carriers on all-cargo services from 1993 to 2001. Between 2000 and 2001, the number of tonnes carried dropped in all markets, particularly the transborder and international markets. The domestic market dropped by two per cent. Table A9-12 in the Addendum shows the operating revenues generated by goods carried on Canadian air carriers' all-cargo services. Between 2000 and 2001, domestic revenues dropped by seven per cent, while international and transborder revenues (combined) remained stable.

Table A9-13 in the Addendum compares the value of goods shipped by air versus other modes. While air cargo trade between Canada and the United States rose steadily between 1997 and 2000, the decrease in 2001 continued in 2002, with a decline of $6.5 billion, or 15 per cent. This loss was slightly higher in the import than the export sector. Air cargo's share of total Canada-U.S. trade was 6.5 per cent in 2002, down from a high of 8.1 per cent in 2000.

As Table A9-13 in the Addendum shows, Canada's air trade with countries other than the United States also declined in 2002, from $39.9 billion to $38.7 billion, but at a slower rate than in 2001. As with the United States, the loss was slightly higher on the import than the export side. Trade remained import-oriented, accounting for more than twice the value of exported goods. The air mode's share of the total value of trade with other countries dropped from 22.6 per cent to 21.5 per cent.

Of goods shipped by air, 85 per cent had eastern provinces as their origin or destination. As expected, the United States, followed by countries in Western Europe and in Asia, were the main markets for trade with Canada using air transport. For a regional breakdown of imports and exports, see Table A9-14 in the Addendum.

Major Events in 2002

Infrastructure

Industry Structure

Freight Transportation

Passenger Transportation