"Fee hike raises Pearson Airport revenue - and gripes"

Tuesday, August 10, 2004

Airport fees rise by $3
Travel industry criticizes Pearson
$15 fee adds to price of air tickets
Canada - The Toronto Star


With the airline industry making a comeback through 2004, analysts say
the last thing it needs is a rise in the cost of tickets. But that's
what it's getting.

The Greater Toronto Airports Authority recently announced a
$3-per-passenger hike in its airport improvement fee, to $15 starting
Nov. 1. That amount is embedded in the price of every ticket out of
Pearson airport. 

Steve Shaw, GTAA spokesperson, says the $25 million additional revenue
from the fee will help pay for Pearson's $4 billion redevelopment
program, which includes the new terminal that opened in April.

"We have to recover our costs," Shaw said, saying the GTAA is trying to
be fair and balanced. "We have excellent facilities that our passengers
are enjoying. These have to be paid for."

But the airline and tourism industries are not happy.

"Any time that any of these taxes and fees increase, it certainly does
impact the customer and takes another small percentage of people whom
we're trying to stimulate to travel out of the marketplace," says
Siobhan Vinish, spokesperson for Calgary-based WestJet. 

More people are flying as the industry recovers from SARS, the Iraq war
and the lingering effects of 9/11. The International Air Transport
Association, which represents about 175 airlines, says that if trends
continue, the industry could end the year with double-digit growth.

Results for the first six months of 2004 indicate increases of 20.4 per
cent in international passenger traffic and 13 per cent in cargo over
2003. Even compared with 2000, the last normal year for the industry,
international passenger traffic is up 8.4 per cent, while cargo shows
growth of 16.2 per cent.

The GTAA reports that 11 million passengers travelled through Pearson
through May, up about 15 per cent over 2003. 

The airline industry faces another hurdle with the increasing price of
fuel, but the IATA says Toronto is creating extra problems with high
costs.

"Once again, we see clearly that the Greater Toronto Airports Authority,
Toronto's airport monopoly, is out of step with the industry," IATA
director-general Giovanni Bisignani said in a news release. "Rather than
follow commercial common sense and get costs under control, their
penchant for double-digit price increases is now aimed at the air
traveller." 

Air Canada agrees, said spokesperson Laura Cooke.

By November, $51 in charges will be built into the price of every
ticket: $15 for the improvement fee, $12 for the security charge, $24
for Nav Canada's navigation services. Hamilton's John C. Munro
International airport charges $10. 

"That's a huge amount of money coming out of the airport system and out
of travellers' pockets," says Randy Williams, president of the Tourism
Industry Association of Canada. "These fees are a deterrent to travel."

Williams blames the "high rentals" the federal government charges
airport authorities. "It's a cost the airports have to pass on to the
consumers."

The GTAA, a not-for-profit private asociation, will pay Ottawa $140
million in 2004 while it continues with a redevelopment plan heavily
criticized by airlines as too extravagant.


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