Air turbulence

Higher airport improvement fee is part of a worrisome trend

Calgarians traditionally strive to be No. 1 — whether it’s in the realm of philanthropy, commerce or athleticism. One distinction city residents would probably prefer to be without is having the second highest airport improvement fees in Canada.

Calgary International Airport’s $2-billion expansion has prompted the airport authority to increase the fee by $5 from $25 to $30, effective March 1, meaning we’ll be tied with Fort McMurray and less expensive than only Bathurst, N.B., where passengers pay $40 for the privilege of using the airport.

It’s tempting to dismiss the fee increase as small change, but it’s just one more disincentive to travelling through YYC, as Calgary’s airport is known. For a family of four, the improvement fee amounts to $120, which must be added to the plethora of other levies and surcharges tacked onto the basic price of a ticket.

The Tourism Association of Canada says our nation’s aviation cost structure is ranked 105th in the world. Among the drags on our aviation industry is $258 million collected by Ottawa in airport rents and $42.9 million generated by applying the GST to airport improvement fees. Totalled up, the medley of fees comes to just shy of $857 million annually.

“Fees are definitely not something we undertake lightly, but we are the only airport in the entire country that’s undertaking massive projects such as these,” says Calgary Airport Authority spokeswoman Jody Moseley.

Canadian airports operate under a different model than those in the United States, where air travel is significantly cheaper. Calgary’s airport receives no government funding for capital projects, such as the new runway, which will openin 2014, and the new international terminal, slated for completion one year later. That’s not the case south of the border, where facilities are subsidized by the federal government.

When other businesses want to expand, they get a loan and expand their business. They don’t charge their customers extra for their products — and make themselves uncompetitive — in the process. The airport expansion will boost the airport’s revenues eventually. Will they then pay their customers back? This is the problem with any monopoly.

For business travellers, who don’t pay the improvement fee out of their own pockets, Calgary’s $5 increase won’t be a deal breaker. It’s also true that the funding model means those who use the airport the most, pay the most, as opposed to a retired grandmother supporting airport improvements through her general taxes. But the Calgary Airport Authority has to be concerned about its competitiveness, especially with airports south of the border, and the ability or inability of leisure travellers and foreign tourists to shoulder ever rising costs. The airport improvement fee was $22 before rising to $25 in 2011.

We expect this to be the last increase in YYC improvement fees; indeed, there’s a good argument to be made that the charges should be reduced when the runway and terminal are complete.

We also expect the federal government to look at the litany of fees and see where it can reduce the drag on a critical sector of the economy. Easing airport rents, trimming the airport security fee and other measures would all go some distance to cutting the cost of a ticket, which should be a priority for all stakeholders in service of air travellers.