Sign in to follow this  
Marshall

NAVCANADA LOOKING TO INCREASE FEES

Recommended Posts

NAV CANADA releases proposal to change service charges

From NAV CANADA

nav-canada-logo-e1587425795708.jpg?w=204

OTTAWA, May 20, 2020 (GLOBE NEWSWIRE) — NAV CANADA today released, for consultation, a proposal to revise customer service charges, effective September 1, 2020. The proposal calls for increased service charges averaging 29.5% in base rates and includes provisions to ease the cash flow impact of the increase on its customers through payment deferral mechanisms.

The impact of the COVID-19 pandemic on the aviation industry has significantly reduced NAV CANADA’s liquidity. Revenues and cash inflows have been substantially reduced as compared to its approved budget. All operating and capital spending has been reviewed and actions have been taken to reduce spending and cash outflows while at the same time ensuring the continued fulfillment of NAV CANADA’s statutory mandate to safely operate and maintain the Canadian air navigation system as an essential service. NAV CANADA will continue to pursue all opportunities for additional operating and capital spending reductions.

NAV CANADA acknowledges that this increase comes at a time when its customers are also in exceptionally difficult circumstances as a result of the COVID-19 pandemic and is therefore proposing to defer the fiscal 2021 cash impact of the increases to its customers, over a five-year period.

“NAV CANADA is proposing this rate action only after having actively pursued all available alternatives, including government assistance,” said Neil Wilson, President and CEO. “All available alternatives, including further government assistance will continue to be explored and utilized in order to minimize or avoid the proposed rate increase.”

As the majority of its costs are fixed, NAV CANADA cannot fully offset significantly lower revenues and cash inflows due to recent decreases in air traffic volume during COVID-19. The consequent reduction of available liquidity has prompted NAV CANADA to seek additional debt financing. In order to meet the additional indebtedness provisions of its existing debenture agreements however, it must achieve a minimum level of revenue in its fiscal 2021 year. The proposed service charge increases are required for NAV CANADA to meet that minimum revenue level.

The proposal is now subject to the mandatory 60-day consultation period required by legislation. Input received during the consultation period will be considered by NAV CANADA’s management and Board of Directors, prior to a final decision being made on the proposal. 

Details of NAV CANADA’s proposed revised service charges are available here:

Share this:

Share this post


Link to post
Share on other sites

This is exactly why Nav Canada should be a federal entity.

Share this post


Link to post
Share on other sites
1 minute ago, Maverick said:

This is exactly why Nav Canada should be a federal entity.

Privatized in to a monopoly with no price controls (other than not for profit).

Share this post


Link to post
Share on other sites

Have you compared the NavCanada rates to elsewhere with similar service levels? They are hardly outrageous and have been actually lowered at times when they are earning more than they need. 

What Federal Entity runs more efficiently than private industry? OPG, Manitoba Hydro,  Ornge? It shouldn't be subsidized at all by the tax payer. User pay all the way 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this