GTAA asks Ottawa to lower airport rent

[Lazionic]

GTAA asks Ottawa to lower airport rent

By BRENT JANGTRANSPORTATION REPORTERTuesday, November 30, 2004 - Page B8

GTAA asks Ottawa to lower airport rent

By BRENT JANGTRANSPORTATION REPORTER

Tuesday, November 30, 2004 -The Globe and Mail Page B8

The operator of Toronto's Pearson International Airport has promised federal Transport Minister Jean Lapierre that it will cut landing fees if Ottawa reduces ground rent.

The Greater Toronto Airports Authority believes that getting a rental break from the federal government makes good economic sense for the Toronto region, said John Kaldeway, who took over as the GTAA's chief executive officer on Oct. 1.

"The minister's office is well aware that we are very much on side in that we would like to see a very major reduction in rent because that's probably the least controllable item I've got in my entire budget," Mr. Kaldeway said in an interview yesterday.

He said he made the pledge to decrease landing fees in a Nov. 24 letter to Mr. Lapierre. "The fact is we have committed to pass through to the airlines any rent relief,"

Mr. Kaldeway wrote. "This is an important moment for the aviation industry, and the GTAA is committed to work with your government."

Yesterday, Mr. Kaldeway played down surveys that show Pearson as one of the priciest airports in which to land in North America.

With its new $3.3-billion Terminal 1 project opening in April, Pearson offers solid value to airlines, and it's misleading to compare rising landing fees at Canada's largest airport with older operations in North America, he said.The GTAA is expected to release the amount of its 2005 landing fee increase within 10 days.

A draft document said the fee could rise by as much as 18 per cent.Ottawa is expected to charge the GTAA roughly $135-million in rent this year.

That rental bill and another $27-million in "payment in lieu of taxes" mostly to the Toronto suburb of Mississauga are "items we cannot control" totalling $162-million -- one-fifth of the GTAA's annual operating costs,

Mr. Kaldeway said.Critics have slammed the GTAA for its high landing fees, saying it costs $7,965 (U.S.) for a Boeing 747-400 to land at Pearson last year. That's more than double the landing fees at most large North American airports.

While Mr. Kaldeway acknowledged that the landing charges are "reasonably expensive," he said that if Ottawa's rent is stripped out, the GTAA's fees would place it in the "middle of the pack" among North America's leading dozen airports.

Mr. Lapierre has said he plans to present various proposals by the end of December for reducing rents at Pearson and other airports.

"We and the rest of the airports have certainly encouraged him to do that quickly, but obviously the ball's in his court," said Mr. Kaldeway, 62, who replaced Lou Turpen at the GTAA's helm.

Mr. Turpen, 60, stepped down from the top post after a rocky, nine-year tenure marked by complaints from the International Air Transport Association and other critics over the costs of constructing the new terminal and supporting infrastructure.

"The legacy that Lou left us with is the building of the airport," Mr. Kaldeway said. Another $1.1-billion (Canadian) in developments at Pearson will be phased in over several years, including a new pier for international flights and a train service for passengers.

© Copyright 2004 Bell Globemedia Publishing Inc. All Rights Reserved.

[deicer]

It took SFO ten years to clean up the mess Turpen left in his wake, hopefully the GTAA will act a little quicker

Time for Mr. Kaldeway to prove his mettle.

Iceman