"Toronto airport must curb skyrocketing costs"

Wednesday, November 24, 2004

Airport must curb skyrocketing costs
Canada - The Toronto Star


It currently costs the airlines $9,800 to land a 747 jumbo jet at Pearson
International Airport in Toronto. That is almost four times as much as the
airlines paid just five years ago. As a result of that massive price hike,
Pearson has become the second most expensive airport in the world in which
to land a plane. Only Tokyo's Narita airport costs more. 

But that is not the whole story. The Greater Toronto Airport Authority, the
not-for-profit corporation that operates Pearson, wants to raise that
landing fee by another 18 per cent, to more than $11,500. 

Everyone already knows who pays these exorbitant landing fees. Struggling
airlines obviously cannot absorb them. So they add them to the ticket
prices. And that, of course, is in addition to the taxes Ottawa imposes and
the GTAA's own passenger levy, the "airport improvement fee," which went to
$15 this month after the GTAA boosted it by 25 per cent.

These soaring fees hurt the airlines and local tourist industry. Ironically,
these industries were supposed to be big beneficiaries of the Pearson
redevelopment, which paradoxically spawned the huge increase in fees.

Critics, especially the airlines and businesses catering to tourists,
complain that the renovation of Pearson was excessive. Many say the GTAA's
$6 billion debt load reflects an out-of-control agency that built a "Taj
Mahal" at Pearson instead of the cost-effective airport the region needed.

The skyrocketing fees suggest the critics have a point. 

Each of the 15 members on the GTAA's board of directors is nominated by a
level of government - Ottawa, Queen's Park, one of the five regional
municipalities that make up the GTA - by the Board of Trade or the Chartered
Accountants of Ontario. But as a group they are accountable to no one,
except possibly the bondholders who expect prompt payment on the $6 billion
debt they currently hold. 

How is it that Canada's most important transportation hub has only one board
member with a background in the travel industry? The airline industry is not
represented at all, consumers are not represented, the tourism industry is
not represented. These three groups have the biggest complaints about the
way in which Pearson International Airport is run.

If accountability means anything, it is that those in charge must take
responsibility for their mistakes and do everything they can to rectify
them. 

But constant fee increases are not a remedy for overspending on Pearson.
They are merely confirmation that mistakes were made.

While the clock cannot be turned back on Pearson, there are some immediate
things the GTAA could do. It could, for example, lobby Ottawa for a better
deal, or possibly forgiveness, on the rent it pays on Pearson lands.
Outright forgiveness on rents would allow it to cut its landing fees in
half. Yet of Canada's eight major airport authorities, the GTAA is the only
one that has failed to take up the issue, even though Transport Minister
Jean Lapierre is reported to be open to the possibility of providing rent
relief.

No one disputes that the GTAA has built a magnificent airport at Pearson.
But it must now find a way to make the airport viable without soaking the
travelling public. And it should do that before spreading its wings with the
development of a new airport at Pickering.


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