By KELLY LOUISEIZE
Celine Dion sings “You and I were meant to fly,” the hook line of a jingle written by an advertising executive working for Air Canada, as a jumbo jet bearing the company’s logo glimmers in the background.
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Airliners feeling the pinch are passing the costs down to their customers. Former fliers, in turn, are opting for alternative travel arangements. |
Is anybody listening?
Ever-increasing taxes, fees and fares are placing air travel farther and farther out in space for the average Canadian traveller. The result of late is more on the highway and fewer on the skyway, not to mention a return trip to bankruptcy court for another Canadian airliner.
Industry executives drop the blame squarely on Parliament Hill. They say onerous fees and taxes imposed by federal regulators on the aviation industry are forcing airliners to place their ticket prices out of the reach of more and more travellers.
Approximately $700 to $800 million a year is taken out of the aviation industry by the federal government through various fees and taxes, says Scott McFadden, CEO and president of the Thunder Bay International Airport.
He is not looking forward to his rent bill in 2006.
The National Airport System, a coalition of airport authorities, pays the federal government approximately $280 million a year in “federal rent.”
That fee and the taxes travellers pay on their tickets amounts to double dipping, according to McFadden.
Transport Canada downloaded responsibility for Canadian airports to the airport boards in the 1990s. Higher landing fees, terminal usage and maintenance costs were imposed.
“Even though the federal government has put no money into the improvement plans or the infrastructure, they continue to increase the federal rent amount,” McFadden says.
He says rent is growing much faster than general inflation.
In 2011-12, payment is expected to reach $408 million and two years later $747 million, according to Michael Skrobica, vice-president of industrial and monetary affairs with the Air Transportation Association of Canada (ATAC).
It is a volatile situation. Auditor General Sheila Fraser says the industry is a state of flux and cannot sustain heavy costs over the long term. Minister of Transportation Jean-C. Lapierre has also gone on record saying he supports an immediate freeze and a reduction over time from the fees imposed. But his plan would need Finance Minister Ralph Goodale’s support.
“Right now Minister of Finance Mr. Goodale in his wisdom has decided not to act on the matter,” says Lapierre.
The National Airport System is attempting to re-open discussions with the government.
Rent is just the start of it.
In the last decade, Air Canada, Canadian Airlines International, Canada 3000, and the latter’s more recent incarnation, Jetsgo, have gone bankrupt. The industry is hurt by monopolies, Skrobica says.
Nav Canada, a not-for-profit agency formerly run by Transport Canada, monitors the Canadian air navigation system. It has done well in controlling costs since the events of Sept. 11, 2001. But “there will be increases coming because there is a reduction in the amount of flying that has gone on,” Skrobica says.
A user fee system was imposed when Transport Canada got out of the air traffic control business. For the most part, flight-planning services, weather briefings and air traffic controller salaries are paid for by commercial carriers through landing fees, which are based on aircraft weight.
And when Canada’s air traveller security charge went into effect December 2001, it was the highest in the world. It has come down some, but still ranks among the world’s highest, Skrobica maintains.
Not all the money collected goes to The Canadian Air Transport Security Authority (CATSA). The authority receives an allotment and the rest goes into general revenues.
CATSA is not accountable to the government: it is accountable only to “its members.”
That leaves McFadden less than impressed. It was an uphill battle when the Thunder Bay airport tried to obtain funding for security renovations he says.
“CATSA had to go on bended knee, as it were, to get funding from the treasury board,” he says.
Air carriers are in no position to fund any of these changes, Skrobica says. They have no reserves, so the cost trickles down to the passenger. He maintains carriers have done all they can to keep costs down through labour negotiations, reducing fleet lines and minimizing the number of routes.
But these agencies, which have a monopoly over the carriers that have no choice but to pay, have done very little along the same lines, he says. In November 2004, for example, WestJet maintained a load factor of 58.5 per cent compared to 64.1 per cent in 2003. Last year’s load factor was the lowest WestJet has experienced since going public in mid-1999.
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