Airports may be next to go private
Industry claims move would drive up prices for travellers
OTTAWA— Airports and airlines are pushing back against Ottawa’s quiet deliberations to sell off Canadian airports, saying such a move would drive up passenger fees and make the air industry less competitive.
The National Airlines Council of Canada, representing airlines such as Air Canada and WestJet, says airport privatization “would fail the most elementary test of stewardship of the public interest.”
And three major airports — Vancouver, Ottawa and Calgary — have banded together to launch a public information campaign to argue against selling off airport assets to the highest bidder.
“We’re not just to accept a policy decision that has a tremendous impact on airports in Canada without saying a word,” said Mark Laroche, president and chief executive officer of the Ottawa International Airport Authority.
“We want to make sure that if there are policy decisions in that way, that everyone knows what the consequences are,” he said in an interview Thursday.
For months now, the federal government has been looking at whether major airports should be sold off to private investors as a way to raise tens of billions of dollars.
Canada’s major airports, including Toronto’s Pearson International Airport, are currently operated by notfor-profit airport authorities.
But officials in the transport and finance departments — guided by analysis done by Credit Suisse — have been weighing the potential windfall to the federal coffers if these airports were sold off to for-profit investors, such as pension funds.
Annie Donolo, a spokesperson for Finance Minister Bill Morneau, confirmed Thursday that the issue remains under consideration. She said the department is following up on the review of the Canada Transportation Act tabled this year that recommended privatizing the country’s large airports.
She said that Credit Suisse is providing financial advice on the issue of airport ownership to the Canada Development Investment Corp., a federal Crown corporation under Morneau’s responsibility, “to inform the government’s consideration of these recommendations.”
With the possibility of privatization looming, parts of Canada’s aviation sector have been organizing to oppose any such move. In a letter to Morneau and Transport Minister Marc Garneau, the airlines’ council suggests that achieving the “best possible” air transport system “is at best a secondary objective” of the government.
With no “meaningful” consultations, “clearly articulated” policy objectives or “comprehensive” assessment of the impact, “airport privatization would fail the most elementary test of stewardship of the public interest,” the letter states.
In an interview, Massimo Bergami- ni, president and chief executive officer of the airlines’ council, said that for too long successive federal governments have viewed the air transportation sector as an easy source of revenue, a situation he says will worsen under privatization.
In their own campaign launched this week, the three airports make the case for the existing airport authority model.
“We are recognized for having the best aviation infrastructure and most efficiently run airports in the world. And we do it without receiving any government funding,” the website states.
“Every penny we earn is reinvested in the airport, helping to ensure we continue to have some of the best airports in the world,” it says. “BUT . . . all of this could be at risk.”
Laroche said the Canadian aviation sector already faces a “huge” cost gap with U.S. carriers because of higher fees and taxes north of the border.
The Greater Toronto Airports Authority says it’s watching to see how decisions around ownership impact its efforts to make Pearson International Airport a “top tier” airport in the world. But it did urge caution.
“Changing the ownership structure is a complex matter that requires careful consideration by a number of different stakeholders,” spokesperson Hillary Marshall said in an email Thursday.