Airport improvement fee continuation to be considered

The airport improvement fee, originally planned to last only 20 years, should continue past its May 31 expiration, Kelowna city council will hear today.

Although the airport has undergone hundreds of millions of dollars worth of upgrades since 1998, more projects are necessary to keep pace with the growth in passenger numbers, YLW officials say.

“Ensuring the continued development of air service is essential to ensuring the airport remains competitive with other similar-sized airports and continues to provide the service its growing number of passengers would like to see,” airport finance manager Shayne Dyrdal says in a report to council.

Dyrdal also recommends that new airlines be given a 50 per cent reduction in landing and terminal fees for one year, up from the current maximum of six months.

The longer subsidy for new airlines, Dyrdal says, would help “stimulate air service development” at YLW.

The airport began collecting the airport improvement fee — currently charged at the rate of $15 on every ticket sold for a flight out of Kelowna and slated to increase to $25 by next spring - in 1998.

The agreement between the airport, airlines, and the Air Transport Association of Canada “does not include an option to extend or an over-holding clause and will expire on May 30, 2019,” Dyrdal writes.

Airlines initially balked at adding the fee into their ticket prices. For awhile, Vancouver airport had a separate collection point where passengers were relieved of the fee before being allowed to enter the departures lounge.

The fees, along with other relatively new charges for improved security in the wake of the 9/11 terrorist attacks, were eventually rolled into the ticket price.

Along with other airports, YLW has been working with the airlines to strike a new deal to replace the original agreement.

However, the new arrangement has not yet been concluded and Dyrdal recommends the existing agreement be extended for three months beyond May 31, with an option for another three month extension.

The extensions, Dyrdal says, will give the necessary time to reach a new agreement on the airport improvement fee.

Over the next decade, YLW has a plan for $183 million worth of upgrades and expansions.

Passenger numbers have risen almost 40 per cent in the past five years.

Courier file photo The 20-year agreement struck to begin charging passengers an airport improvement fee at YLW in 1998 did not include renewal clause. Council will consider an extension today so a new agreement between airports and airlines can be worked out.