For Dozer and B52er

[Guest MikePapaKilo]

This topic is well down the page, so I have updated near the top. Hope this helps:

Dozerboy wrote to B52er:

Now again correct me if I am wrong, but has Nav Canada reduced their infrastructure that supported the pre-perfect storm situation? I don't think that they have so I guess they would have to either cut costs or increase revenue by raising fees to the remaining aircraft that ARE flying in/overflying Canada

From the NavCan press releases

Said Crichton: "Through the current industry downturn, NAV CANADA has done everything possible to reduce costs while maintaining the highest safety standards. Our approach has included initiatives to access non-aeronautical revenues and the complete draw down of $75 million from the rate stabilization account. In addition, the $75 million in operating cost reductions were on top of $100 million in annual cost savings and staff reductions already achieved through previous restructuring.

"Unfortunately, we face further traffic declines due to the war in Iraq and SARS. And anticipating an accumulated shortfall of $176 million after two years, we’ve exhausted our ability to help ease the burden of the downturn on our customers."

The level of the proposed increase is significantly mitigated by NAV CANADA’s plans to access additional revenues from non-aeronautical sources. The Company recently signed three contracts involving the sale of its world-leading air traffic control technology to UK NATS, its counterpart in the UK.

In addition, NAV CANADA continues to pursue a significant cross-border lease-leaseback opportunity with a significant financial one-time benefit. "This opportunity becomes more possible now due to a recent favourable tax decision from the Federal Government – a decision which the Company applauds," Crichton said.

The increase comes after years of cost reductions at NAV CANADA. The Company reduced overhead by more than $400 million and staff levels by 1000 from 1997-2001, following the transfer of the Air Navigation System (ANS) from government. These savings were passed on to customers through lower service charges.

[dozerboy]

Thanks for the update on Nav Canada. It sounds like they are facing some difficult decisions as well.

Man, how this industry has changed...

[Guest jimmy]

They could cut some costs if they moved out of their Taj Mahal HQ in downtown Ottawa.

I guess that location is vital so they are close to the Hill to ask for more money now that traffic has dropped.

[Guest floatrr]

Oh! Hang on a second! A former crown corporation asking for cash to help in an economic downturn? Who'd of thought?

[Guest MikePapaKilo]

Must say I am a bit puzzled by the postings of Floater and Jimmy.

When has Nav Canada ever asked for money from the feds at all ? Air Canada has. Other carriers might have. But NavCanada ? Don't think so.

In its early years Nav gave back over 50 million to the industry. Maybe even closer to 90million. According to their press releases, they are still taking in less money than was taken in by the airline ticket tax.

NavCan never ever was a crown corporation.

MPK

[tsgas]

You can call Nav Canada what you want but they still provide a service that was payed for by the collection of aviation fuel taxes.Now commercial aviation in Canada is still paying the Canadian government for this service and getting nothing in return.Nav Canada charges some of the users but gives all levels of government a free ride. Something is wrong with this picture.

[Guest floatrr]

MPK, With all due respect. What in the SAM H@# do you think is happening? NC is raising it's rates so high that it could result in more airlines entering CCAA in the future or at least that being a major contributer. Which will result in lost revenue to NC, which will inevitably end up in a broken ATS. etc. So who do you think will step in and fix it? My guess... the Taxpayers. How far off this is remains to be seen.

[Guest 6to8mos]

MPK Can you describe what happened when the old Nav Canada , pre "non profit" wound down , and became the present entity. My understanding is that a great number of former civil servent controllers recieved healthy severence packages , then drove to work next day, new job. T or F?

[Guest mars]

I agree that the government should stop collecting the aviation fuel tax or use it for aviation.

However, the fuel tax never was used to fund the ANS. It was an airline ticket tax paid directly by the passenger as part of the fare. The ticket tax was phased out once NAVCAN took over and instituted user fees.

I also agree that government departments, DND for one, are getting a free ride for NAVCAN services, but that is legislated.

[Guest mars]

"Rates so high it could result in more airlines entering CCAA..."

Canada's ANS system is a @%#&*&* bargain. Yet airline management and employees moan and complain about how the cost is driving them out of business. Airlines throw on $20 or $30 surcharges for fuel, but heaven forbid the cost of ATC/ANS goes up $1 or $2.

NAVCAN's business model is also broken. They rake in huge excesses during boom times, yet have to charge more during a downturn. Those excesses by the way, about $500-900 million (you forgot a 0 MPK ;-)), was returned to the airlines. Never mind that the short staffed and overtimed to death controllers actually had to work the traffic.

However, NAVCAN fees are a part of the airline business, just as fuel and aircraft leases, like it or not. If any airline cannot structure their business to deal with such costs, maybe they don't deserve to be in bussiness.

[Guest mars]

Ah yes, the old severance complaint.

The severance package is part of the collective agreement ( collective, now that's a joke, controllers have had all 2 contracts, yes only 2, in the past 20 years forced on them). Like every perk in a collective agreement it meant a loss in some other form of compensation, such as a greater % raise or more leave. So it was bought and paid for. The severance is to be paid on termination OR upon retirement if never ultilized, you get it eventually.

When the ANS was set to transition to NAVCAN a ruling was made that the transfer represented a severance (not sure who made the ruling, but it was not employee initiated). We were given a chose to roll credit time under the government into NAVCAN's plan (NAVCAN would get the money) or take a lump sum then and there. Given the option most if not all took the money rather then letting the company have it. Any payout taken will be deucted from any future NAVCAN severance payment.

Either way the government had to pay the accured benefit, to us or NAVCAN.

[Guest 6to8mos]

So T . Termination? Leave ANS, get healthy severence, park in same old spot next day, with a raise.

[Guest MikePapaKilo]

Floatr says: "NC is raising it's rates so high that it could result in more airlines entering CCAA in the future or at least that being a major contributer....."

My question you: How high ? Please tell us what the "new" charge will be on a typical Bus or Boeing YOW-YYZ, at 75% load, as levied against each pax on the aircraft ?

For our aircraft the flat fee went up a whopping $17 per day. A damned sight cheaper per day than when we go to Europe.

Not that I am a defender of NavCan,(I have spoken against the management of the ANS here, on other forums and on their customer service phones) but I do have some real friends on the scopes. I have a close relative in ATC. If you wonder what is a real puzzler to controllers who post here, it's how sadly informed some of us are about how we are supported in getting from A to B and how much that support really, truly actually costs.

So Floatr, would you kindly offer a true analysis of the Nav Can fees, measured against other commercialized ANS. Cite some examples of costs. You pick the aircraft and route. Then do for us a cost comparator of the service fee increase against the current fees. Can you do that ? Perhaps you can, but the betting line says you won't.

Thanks in advance,

MPKountant