Ottawa milking air travellers, business groups say

[Blastor]

Ottawa milking air travellers, business groups say

By SANDRA CORDON
Canadian Press

Ottawa — Ottawa treats air travellers like cash cows by charging higher and higher airport rents that get passed on in ticket prices, say business lobby groups.

The federal government has boosted airport rents by an average 6.5 per cent effective Jan. 1 — a fee that hurts the tourism industry, the aviation sector and travellers alike, says Cliff Mackay of the Air Transport Association of Canada.

“It is time for the federal government to stop treating air travellers like cash cows,” Mr. Mackay said Wednesday at a news conference that called on Ottawa to cut airport rents in its coming budget.

Higher rents add at least 2 to 3 per cent to the price of many airline tickets, he said.

That amounts to a hidden tax on business and travellers, added Michael Murphy of the Canadian Chamber of Commerce.

“The rents paid by airports make Canada less competitive globally.”

Transport and other business lobby groups have been complaining about rising airport rents, saying Ottawa gives nothing back to the air industry in return.

They estimate Ottawa now takes more than $300-million annually from local airport authorities across the country.

And since the Sept. 11, 2001 terror attacks devastated the air industry across North America, rents have risen by 25 per cent, the groups estimate.

They have had a sympathetic ear in Transport Minister Jean Lapierre, who promised last November to press his cabinet colleagues to consider ways to reduce airport rents.

A spokesman said Mr. Lapierre hasn't backed away from the issue.

“We're still very much looking forward to going to cabinet” some time this month, said André Fortin.

Critics argue that while the federal Transport Department relies on rents to fund other operations, Ottawa's sizable budget surpluses mean higher rents aren't really needed.

After reporting a $9-billion surplus for the last fiscal year, Finance Minister Ralph Goodale predicted last fall that the surplus in fiscal 2004-05 should be almost that high again — about $8.9 billion.

Airlines have long complained about the high cost of doing business in Canada.

At the same time rents have been rising, airports have been increasing their own landing fees and other costs.

Airport rent in Montreal is expected to rise 30 per cent this year while landing fees at Toronto's Pearson International Airport — the country's biggest and busiest — is to rise by 17 per cent over 2004 rates.

Some airlines say higher fees mean a passenger flying from Toronto to Ottawa would pay almost as much in taxes and surcharges as the cost of the actual airfare.

WestJet, for example, has estimated that a passenger could pay as little as $41 for a one-way fare from Toronto to Ottawa on Jan. 10.

However, the traveller would have to shell out another $37.76 in extra charges, an amount equivalent to 92 per cent of the airline fare.

The add-on costs include a $15 airport improvement fee, $12 in navigational fees and insurance, $5.61 for air travellers' security charge and $5.15 in GST.

Pearson is among the world's five most expensive airports and is getting too costly for business, says the air transport association and the International Air Transport Association, which represent 270 airlines worldwide.

In response, Toronto's airport authority says it must pay $130-million in rents to the federal government.

Further federal rent increases are scheduled in coming years.

If the federal budget isn't changed, aviation groups say airport rents will rise by another $60-million in 2006.

Airport rents were negotiated by local authorities after the federal government transferred authority for local facilities to not-for-profit operations more than 10 years ago.