Pearson fees ‘headache’ for airlines
Air transport head lashes out at feds over high charges ‘Madness’ to make T. O. airport ‘one of most expensive’
Toronto’s Pearson International Airport remains a “ big headache” for the world’s airlines, says the head of the International Air Transport Association. And if Ottawa cared about Toronto’s economy and knew what was good for the costly airport, it would reduce its rent demands immediately, says IATA director general Giovanni Bisignani. “The situation in Canada is disappointing,” Bisignani told reporters yesterday in a stateofround table. “Toronto remains a big, big headache. Toronto is one of the most expensive airports in the world, if not the most expensive airport, depending on how you compare airports.”
Bisignani said Tokyo’s Narita airport — generally considered the most expensive for airlines to do business with — recently announced an 11 per cent reduction for its landing fees. But Toronto is expected to raise its 2006 fees later this month.
“ Narita was a disaster for us because they did not understand our message, but this summer they understood. Narita decreased user charges 11 per cent. Toronto is unfortunately not going in the same direction.”
Bisignani again criticized the “ Taj Mahal” that the Greater Toronto Airports Authority built in its $ 4.415 billion redevelopment at Pearson, but acknowledged the GTAA was doing what it could to become more efficient as it carries a $6 billion debt to pay for the new Terminal 1. But Bisignani said Ottawa has to rethink its rent policy that will see Pearson pay two- thirds of the country’s airport rent while jets flying in and out carry only one- third of the nation’s flyers. Toronto’s rent is going down 6 per cent by 2010, while the next five biggest airports in Canada get rent reductions averaging 52 per cent.
“ We have to put a stop to this madness,” said Bisignani. “It makes no sense. I ask the Canadian government to realize what the airport represents to Toronto, to the community, to Canada. Something like 138,000 people are directly involved in the airport, $ 3.6 billion in wages.
“ Why do you want to penalize an economic activity that can grow?”
Bisignani warned that as the federal government moves toward more liberalized flying agreements with the United States, it would hurt Toronto unless the airport gets a break on rent. The deal Transport Minister Jean Lapierre is pursuing would allow airlines from the U. S. to pick up passengers in Canada ( and vice versa) as long as they were heading to a third country.
Bisignani said airlines could easily bypass Toronto, where landing fees are nine times more expensive than Boston’s Logan airport and six times more costly than Chicago’s O’Hare.
Airport rent accounts for onethird of Toronto’s landing fees. American airports don’t pay rent, and are often subsidized by the state and federal governments.
Bisignani painted a worldwide picture for the aviation industry that was generally rosy, except for the United States. Airlines in Asia, Europe and India will generally make money or break even, while the industry is expected to lose $8 billion in North America. Those losses are mostly expected in the U. S., whose big airlines wrestle with high labour costs on top of high fuel prices.
Bisignani held up the restructuring of Air Canada as an example of a success story. The industry is expecting a 5.6 per cent increase in flyers and 6.3 per cent growth in freight traffic through 2009. But he raised warnings about freight growth, which stalled this year at 3 per cent. “ We may see there’s a problem in the world economy. It’s a very serious indication of a potential slowdown in the economy.”