Planned fee increase at Pearson outrageous

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Planned fee increase at Pearson outrageous, airline group says

'We don't need a Taj Mahal,' IATA argues

By BRENT JANG

TRANSPORTATION REPORTER

Wednesday, November 17, 2004 - Page B9

A planned increase in landing fees at Toronto's Pearson International Airport is outrageous, and could force some carriers to put the brakes on their growth plans for Toronto as a destination, says the global group representing airlines.

The jump for 2005, as high as 18 per cent according to a draft proposal by the Greater Toronto Airports Authority, would be the latest in a series of landing fee increases hurting the Toronto airport's competitiveness, the International Air Transport Association said.

IATA represents 277 airlines accounting for more than 95 per cent of global scheduled air traffic.

"The airline industry has been moving in the direction of reducing costs and becoming more efficient, but Pearson has increased its landing fees by 208 per cent already since 1998," said Anthony Concil, IATA's director of communications.

Canada's largest airport, which unveiled its new $3.6-billion Terminal 1 in April, is out of step with cost-conscious airlines, Mr. Concil said.

"We need an efficient terminal, but we don't need a Taj Mahal, or Versailles, or whatever you want to call it. We can't have airports moving toward high-cost palaces," he said yesterday from Geneva, where IATA's executive offices are located.

Mr. Concil said Ottawa needs to relieve pressure on the GTAA, the operator of Pearson, to raise landing fees. He urged federal Transport Minister Jean Lapierre to reduce the rents that Ottawa charges to airports across the country.

"Toronto needs to get its costs under control," Mr. Concil said.

GTAA spokeswoman Connie Turner said no decision has been made yet on the level of landing fee increases, but it won't be 18 per cent. "That figure has been taken out of context," she said. "We have received very useful feedback from the airlines, and based on that, we are making adjustments."

Ms. Turner said any reduction in Ottawa's airport rental rates would translate into lower landing fees for airlines. About $160-million, or 20 per cent of the GTAA's $800-million in annual operating costs, goes to rental payments to Ottawa.

She also disputed IATA's assertion that Pearson is a high-cost operation, saying the Toronto airport offers value for the money, compared with other airports that have extra fees.

"We're not outrageous at all. We are not overpriced."

Air Canada spokeswoman Laura Cooke said the Montreal-based airline is concerned about the escalating cost of doing business at its Pearson hub.

"Regardless of the rate increase proposed, given the multiple increases imposed to date by the GTAA, any further fee increase simply contributes to the uncompetitiveness of Pearson and Toronto as a destination," she said.

The Air Transport Research Society said yesterday that Pearson ranked as the most expensive North American airport in its survey of 2003 landing fees in three aircraft categories: $7,965 (U.S.) for a Boeing 747-400, $3,311 for an Airbus 300 and $483 for a CRJ200-LR.

The society, which represents transport researchers around the world, released its survey in Vancouver at a joint conference of the Air Transport Association of Canada and the Canadian Airports Council.

Globally, Pearson ranks second behind Tokyo's Narita Airport as the most expensive airport at which to land, said University of British Columbia Business Professor Tae Oum, who delivered the society's report to conference delegates.

The survey also measured "operating efficiency" and ranked airports in Atlanta and Vancouver as the No. 1 and No. 2 performers in North America. Pearson placed 20th in that ranking of more than 40 North American airports.