Canadian airlines and airport industries are concerned that the Canadian federal government's exorbitant ground rents, security fees, fuel excise taxes and other charges, all passed on to the passenger, are driving Canadian flyers to American airports which is costing the Canadian economy billions.
In Canada, the federal government views airports as revenue sources, cash cows to be milked, whereas the federal government in the United States actually helps subsidize their airports and views them as economic generators that create jobs and strengthen the local economy. The aviation security fees and the rent that the Canadian federal government charges airports, is a major factor that is influencing this migration of passengers from Canadian airports to nearby American ones. Indeed, according to reports, one in six Canadians flying to U.S. cities do so from American, not Canadian, airports.
In Montreal, many flyers start their journey in Burlington,Vermont, or Plattsburg,New York, where bilingual signs are even posted to help make Quebec passengers more at home.
In Toronto, many simply drive to Buffalo, New York., where flights to major U.S. centres are sometimes hundreds of dollars cheaper than if they flew from Toronto's Pearson International. Canadians reportedly make up more than 30% of Buffalo Niagara International Airport's passengers. The Airport website even shows how much a party of four can save when flying out of there instead of Toronto:
Fee comparison example for a party of four, flying nonstop, roundtrip to Orlando Florida in October 2010 (Saturday to Saturday).
If flying from the Buffalo Airport:
Average taxes and fees added to airfare2 $84 ($21 per ticket)
Parking, seven days in the Preferred Long-term lot $78 (walking distance to terminal) 3
Total for parking, taxes and fees $162 for a party of four
If flying from the Toronto Pearson Airport:
Average taxes and fees added to airfare2 $473 ($118.25 per ticket)
Parking, seven days in the Preferred Long-term lot $136 (walking distance to terminal) 4
Total for parking, taxes and fees $609 for a party of four
Total savings for a party of four: $447, flying out of Buffalo Niagara International Airport
Airports in Bellingham and Seattle, Washington State, are close enough to lure many flyers from British Columbia.'s Lower Mainland.
Air Canada recently estimated it would save about $1 billion a year if it operated out of U.S airports instead of Canadian ones because of the higher fees. A recent study found the economic output of Canada's four major airlines — Air Canada, WestJet, Jazz, and Air Transat — could increase by some $3 billion if airport ground rents to the federal government were eliminated.
Pearson International Airport in Toronto paid $140 million in rent to the federal government in 2009. In the U.S., airports not only pay little to no rent, they are also often subsidized by all levels of government.
In addition to rent, the Canadian federal government also imposes security fees — as well as fuel excise taxes and sales taxes on fares, all of which is passed on to the passenger departing from Canadian airports. On some domestic flights in Canada, the federal government’s fees and other indirect charges can account for 70% of the airfare.
There is a great effort from Canadian airlines to offer cut rates, but there's not much room for them to move, with such high government fees that have to be tacked onto each fare. It is continuing to drive Canadians to use American airports.
Canadian Airline Blog
Mon, Jan 3 2011 11:23 AM
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