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Taxes, fees killing airline industry
By Nicolas Van Praet "Sin taxes" on flying are "killing" the Canadian aviation industry, Air Canada said yesterday, adding that Ottawa should put an end to the dizzying proliferation of airport charges and other air-travel fees. But the Canadian Airports Council said Canada's dominant airline is flexing its monopolistic muscle in an attempt to smother competition. In a written submission to the House of Commons standing committee on finance, Montreal-based Air Canada said ticket surcharges and special fees have "gotten so bad it seems that air travel is subject to more sin taxes than tobacco or alcohol." Airlines and their passengers are paying too much while governments and airports are reaping the windfalls, the company said. "In Canada's airline industry, the cost of doing business is literally killing the business," the airline wrote. Air Canada, which recorded a profit of $125 million in the last quarter, claims traffic at its regional carrier Jazz is down 30 per cent so far this year, in large part because of added fees such as Ottawa's $24 round-trip security surcharge. It claims Air Canada and its passengers have seen the amount they pay in fees, taxes and charges rocket by more than 250 per cent over the last five years. The airline's submission, part of the government's pre-budget consultation process, also paints Canadian airports as money-hungry leeches, sponging off passengers and airlines at any available opportunity through airport-improvement fees and other charges. Air Canada wants Ottawa to consider granting airlines fuel-tax relief, modifying the security tax and putting in place a mechanism in the administration of airports to allow airlines to have a say in how much they're charged for such things as landing rights and terminal use. "Airports are largely unaccountable," the note stated. "Not true," countered Neil Raynor, executive director of the Canadian Airports Council. He said airlines are consulted on how the revenue collected from airport-improvement fees are spent, under an agreement with the Air Transport Association of Canada. Raynor said Air Canada is attempting to quash competition by taking more control from airport authorities over such things as airport gates and bridges leading from planes. "This is Air Canada attempting to control the whole of the air-transportation industry," he charged. Raynor said since the devolution of airports from Transport Canada began, airports have taken back chunks of infrastructure that were under exclusive Air Canada ownership. "Their commercial instinct is to get back
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