Another record for YYZ

[Kip Powick]

Not sure if this was posted before.....

Pearson airport becomes world's most expensive

The Greater Toronto Airport Authority announced on Tuesday a landing fee hike of 6.9 per cent for 2006.

The move, the eight consecutive increase at Pearson in as many years, cements Toronto's Pearson International Airport's position as the world's most expensive airport at which to land.

This means it would cost more than $13,000 for an airline to land a 747-400 at Pearson -- something that has the airline industry furious.

General terminal charges will see an 8.9 per cent increase.

In contrast, officials at Tokyo's Narita airport recently announced reductions that will drop the landing fee for a similar jet to the equivalent of $7,300.

Air Canada chairman Robert Milton recently warned that high landing fees charged by Pearson threaten to scare away valuable business.

"It is difficult to be happy when Toronto has now evolved to be the most expensive airport in the world," Milton, current chairman of the International Air Transport Association, said in the latest edition of IATA's Airlines International magazine.

"This dubious honour comes after pressure from IATA resulted in ... reductions at Narita, the previous record-holder," Milton told the magazine.

"With its high prices, Toronto's task will become increasingly difficult. Remember that it does not have a market the size of Tokyo to anchor its operations. People will start to fly around it."

The U.S. Air Transportation Association also blasted the move.

"The Canadian government appears to be treating Toronto Pearson Airport as if it were a resource to bolster assets rather than an opportunity to enhance economic growth," said ATA President and CEO James C. May in a news release issued Tuesday.

"The continued insistence of the Canadian government to charge exorbitant rents flies in the face of sound logic and good business sense at a time when the airline industry can ill afford any increase in external costs. Toronto is an important market for U.S. airlines, but this move could threaten growth opportunities at Pearson."

May said the fees might make Toronto less desirable as a landing destination.

"With a higher cost structure at Pearson, airlines could be left with no choice but to serve southern Ontario through nearby U.S. cities such as Buffalo, Detroit, Chicago and even New York," he said. "This unjustified rate hike truly puts Toronto at a competitive disadvantage."

GTAA's defence

GTAA spokeswoman Connie Turner told the Toronto Star that it's not fair to compare fees because Pearson charges all-in-one fees while others charge additional fees.

The GTAA also tried to foist some blame on the federal government.

"Almost 60 per cent of the anticipated increase in landing fees is directly attributable to the increase in rent payments to the federal government that the GTAA must pay in 2006 compared to the rent paid in 2005," the GTAA said in a news release.

In Ottawa on Tuesday, federal Transport Minister Jean Lapierre said, "Tell Pearson to look at their debt load."

The GTAA has a debt of $6 billion following a $4.4-billion airport redevelopment project.

Earlier this month, Lapierre defended Ottawa's plan to cut rent for Canadian airport authorities by $8 billion over the next 47 years. Pearson's would fall by $5 billion over that period, but the reductions wouldn't start until 2011.

Under the new multi-year strategy introduced by Ottawa in May, Pearson's ground rent would continue to increase gradually at first, while other Canadian airports would see a reduction.

"Some people will say it's not enough. But I will tell you how I had to leave quite a bit of blood on the floor as a result of the battle" to secure airport rent relief from cabinet, Lapierre said.

[Guest rattler]

The atricle is kind of dated considering who they are quoting as the Minister of Transportation.

However on the subject of the cost of doing business (aviation in Canada).

ATAC Welcomes Air Policy Review

ATAC Welcomes Air Policy Review and Encourages Competitiveness

The Air Transport Association of Canada today welcomed Minister Cannon’s initiative to review Canada’s international air policy and urged the government to reduce aviation-specific taxes, to make Canadian air carriers more globally competitive.

As with all international trade negotiations, the Government of Canada should pursue discussions with those trading countries that offer significant reciprocal opportunities for Canada, while working to put the Canadian aviation industry on a level playing field with our international competitors.

“The aviation industry in Canada is a world leader in service and innovation.  We welcome fair competition and the opportunities it provides”, said ATAC President and CEO Sam Barone.  “Hopefully, today’s announcement will be followed by a series of tax reduction measures to make the Canadian aviation industry more competitive, as Minister Flaherty committed to doing in a recent speech.”, concluded Barone.

Last week, Finance Minister Jim Flaherty acknowledged the need for tax reductions to address Canada’s international competitiveness:

“I don’t think I need to convince anyone in this room that taxes in this country are still much too high. We’ve made progress in this area but more needs to be done if we are to strengthen our economy and remain at the forefront of this highly competitive global economy. … Canada must continue to improve our tax competitiveness even further.”

Nowhere is Canada’s competitive gap greater than in the field of commercial aviation.

·        In Canada, airport rents drain $300 million annually from the industry, while providing no services in return (over $2 billion since their inception in 1994).  By contrast, no significant airport rents are payable in the United States.

·        The federal government continues to profit from aviation Fuel Excise taxes at a rate of 4 cents / litre, while the taxation rate in the United States is approximately 1 cent / litre[1] ($100 million collected last year alone).

·        Canada continues to charge some of the highest passenger security fees in the world.  Air travel is the only form of transportation and only segment of the economy expected to fund its own security.

Collectively, these measures represent a simple but brutal half billion dollar annual tax on air travel.

“If the government is truly serious about growing air services and therefore the rest of the Canadian economy, it must first commit itself to lowering the costs of doing business, though lower taxes”, concluded Barone.