Guest Patrick Bergen Posted July 18, 2003 Share Posted July 18, 2003 Any thoughts? Airports may spurn rent deferrals The Calgary Herald (Thu 17 Jul 2003 - Page: D1 - Section: Business) Byline: Grant Robertson An $80-million relief plan for Canadian airports announced by Ottawa Wednesday may be turned down by several cities, including Calgary, who say the money does nothing to help the struggling aviation sector. Garth Atkinson, chief executive of the Calgary Airport Authority, said the facility may be worse off if it accepts the government's offer to defer multimillion-dollar federal rent payments for two years. The deferral is designed to give Canada's airports breathing room on rent payments so they can reduce charges to air carriers who are struggling with dwindling passenger loads and falling profits. But Atkinson said the airports would be putting themselves at risk for millions if they defer rent payments and the industry falters in the next few years. "My guess will be that no airport will do that. You're digging your own grave," Atkinson said. "All we'd do is just build up a balance sheet liability on a hope and a prayer that the industry will be able to afford double-digit increases down the road." Under the aid package, airports can defer 10 per cent of their federal rent payments for two years, with larger deferrals available to cities whose passenger numbers have declined substantially since 2002. Airports can pay the money back, interest free, over 10 years beginning in 2006. Federal Transport Minister David Collenette said the money combines with other reductions in federal security taxes to help the slumping sector. "The government of Canada recognizes the unprecedented challenges, such as SARS, the war in Iraq, and the events of September 11th, 2001, being faced by the air industry," Collenette said. The airports, along with cash-strapped Air Canada, were hoping for an outright reduction of federal airport rents, which totalled $250 million in 2001-02 for the country's nine biggest facilities. Industry groups argue the government has no right to collect the rents because it hasn't acted as a landlord to the airports since the facilities were privatized more than a decade ago. The organization representing Canada's airlines said the reduction works out to roughly $1 a passenger. "We're disappointed by the size," said Warren Everson, vice-president of the Air Transportation Association of Canada. The program will prove little use to the carriers, though, if the airports decide not to use it. A spokeswoman for Vancouver's airport, which has seen a drop of more than 10 per cent in passengers over the past year, said the facility has not decided what it will do. Toronto's airport, hit hardest by the city's SARS outbreak, can defer the most money -- roughly $49 million over two years, followed by Vancouver at $15.3 million and Calgary at $4.8 million. Peter Gregg, spokesman for the Greater Toronto Airport Authority, confirmed the facility would be making full use of the aid package. However, other cities question what they'll get out of the arrangement -- which essentially acts as a two-year loan, albeit without interest. Calgary pays $22.5 million in annual rents, which will increase to $55 million by 2006. The city's passenger numbers have held steady over the past year, increasing about one per cent. "In terms of a reduction, it amounts to 10 per cent of zero," said Atkinson. "What this really is is an aid package for Toronto. . . . This is a financing package -- and most of it goes to Toronto." ----- Amount of federal rent money Canada's major airports can defer (in millions): Toronto $49.3 Vancouver $15.3 Calgary $4.8 Ottawa $2.3 Montreal $2.2 Winnipeg $ 0.9 Halifax $0.8 Edmonton $0.4 Saskatoon $0.36 Victoria $0.3 Regina $0.29 Total $76.3 million Link to comment Share on other sites More sharing options...
Pivot Posted July 18, 2003 Share Posted July 18, 2003 Ya. My thoughts are that we should make him drive (or take the train) next time he has to go YOW-YVR. If he keeps this up there will not be anything left of aviation in Canada. Makes me sick when I see him on TV smiling and saying he is doing all he can to help us out. I bet his next move will be to add a Kyoto Protocol tax to airfares.... Just to help us out a little bit more. Link to comment Share on other sites More sharing options...
Guest Tri-spool Posted July 18, 2003 Share Posted July 18, 2003 Pivot, I think you may have already heard that high speed rail will replace Air Travel in this country. Cheers! Link to comment Share on other sites More sharing options...
wjaer Posted July 19, 2003 Share Posted July 19, 2003 Link to comment Share on other sites More sharing options...
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