IATA comments on Canadian Air Travel

[Guest Patrick Bergen]

I would be very interested in what Collenette has planned for the airline industry. It is time for a change.

CanWest News Service;

In slightly politer terms, the head of the world's international airline trade group yesterday called Canada's air-transportation policy a failure, its biggest airport a money-grabbing monopoly, its air-navigation company a rip-off, and its air-travel security surcharge overblown and illegal.

Giovanni Bisignani, the diminutive chief executive of the International Air Transport Association, breezed into Montreal's convention centre yesterday and let loose a stream of digs and jabs at specific players in Canada's air-transportation system.

Ottawa is discriminating against passengers on international flights through its controversial air-travel-security surcharge, he said.

The fee, still the highest in the world at $7 for domestic passengers and $24 for international travellers, violates international regulations because it discriminates between two different categories of customers, Bisignani said. He said it's also unfair that airline passengers bear security costs themselves while subway riders and users of other modes of transport pay little or nothing.

Speaking at the 2003 Aerospace Congress and Exhibition, Bisignani blamed the Canadian government, some airports and air-traffic-control company Nav Canada, for failing to provide airlines with financial relief when they needed it during such recent crises as the outbreak of Severe Acute Respiratory Syndrome.

The IATA boss denounced managers at Toronto's Pearson International Airport for showing "no sign" of attempting to cut costs while increasing landing charges to airlines by 142 per cent since 1999.

"Toronto is well on the way to achieve a record, to be one of the top 10 most expensive airports in the world."

While some airports jacked up landing fees, Nav Canada, the country's air traffic control company, raised its rates.

"Nav Canada is no longer delivering value for money," Bisignani said. He called on Ottawa to create better regulations and policy to monitor the actions of airports and other so-called "private monopolies."

Bisignani also took aim at what he described as outdated laws that are stifling the industry's growth. He said ownership limits for airlines should be raised or liberalized because airlines need access to capital markets. He called for regional open- skies agreements to replace bilateral systems between countries.

"Airlines should be free to ally, to merge, to achieve the needed economies of scale like any other industry.

The biggest problem of this industry is it's not allowed to act like a normal business."

Some Liberal and Canadian Alliance politicians have called on Ottawa to raise or scrap its 25-per-cent foreign-ownership limit so Air Canada can raise money more easily. Transport Minister David Collenette has shown little willingness to make such changes.

Industry leaders have also called on the government to join the U.S. and the European Union in crucial talks, to start this fall, on air-travel liberalization. Collenette said Canada does not have to be part of the negotiations.

The world's major airlines stand to lose nearly $10 billion this year as the industry continues to weather a downturn, according to IATA. While traffic is recovering, airline profits are lagging as ticket prices remain low, experts said yesterday.

As the second anniversary of the terrorist attacks of Sept. 11, 2001, approaches, industry players appear keenly aware that aviation teeters in a fragile state. Said Pierre Chao, senior equity advisor for Credit Suisse First Boston: "We are one act of terrorism away from restarting the clock."

[deicer]

Speculation is that when Paul Martin becomes King of Canada, Mr. Colonhead won't be in the Transportation Portfolio any longer.

Any thoughts as to the replacement?

Iceman

[B75/76]

Have no idea, but Homer Simpson would be an improvement!! ;-) (