The Star
Edited: my emphasis in bold... another example of Ontario, GTA in particular getting the shaft?
Pearson to be world's costliest
Airport to raise landing fees up to 8 per cent, source says
Facility's board blames federal rent, fears losing business
Nov. 15, 2005. 06:54 AM
KEVIN MCGRAN
TRANSPORTATION REPORTER
The world's airlines are braced for fee hikes that will make Toronto Pearson International the world's most expensive airport at which to land.
The Greater Toronto Airports Authority will announce fee hikes for 2006 today, which are expected to be between 6 and 8 per cent, sources told the Toronto Star. It will be the eighth year in a row for such hikes; landing fees will have risen 289 per cent since 1998.
The cost for an airline to land a 747-400 at Toronto would be more than $13,000, surpassing Tokyo Narita, which recently announced 20 per cent reductions that will drop the landing price for a similar jet to the equivalent of $7,300.
"If it's true, it just perpetuates the depressing reality that Pearson is unfortunately not a very competitive airport internationally," said Fred Gaspar, vice-president of policy and strategic planning for the Air Transport Association of Canada. "Their fees area already too high thanks to government rents, and any further increases only demonstrate how the government's rent reform policy didn't really do anything to fix the problems at Pearson."
Air Canada, Pearson's largest tenant, would fly more planes out of Toronto if the rent would come down, president Robert Milton said in this month's edition of Airline International, an industry magazine.
"It is difficult to be happy when Toronto has now evolved to be the most expensive airport in the world. This dubious honour comes after pressure from IATA resulted in ... reductions at Narita, the previous record-holder," Milton told the magazine.
"With its high prices, Toronto's task will become increasingly difficult. Remember that it does not have a market the size of Tokyo to anchor its operations. People will start to fly around it. Our new regional jets are allowing us to do just that in order to avoid its high costs. It is very disheartening as the home-town airline that would really like to develop a bigger hub with frequencies and connectivity," Milton said.
The airports authority would not confirm the size of the hikes. Spokeswoman Connie Turner would only say "there will be increases and a very large portion of those will be due to rents."
She added it's not fair to compare landing fees at Pearson with other airports because Pearson charges one "all-in" fee while others have many more user fees, such as gate fees and apron fees. Tokyo Narita, for example, would collect another $900 for a 747-400 that is parked for four hours.
"Yes, we are expensive and if we want to compete internationally, we have to find a way to get these costs down," Turner said.
She pointed out that while landing fees have nearly tripled, rent paid to Ottawa has doubled, with the GTAA poised to pay about $144 million next year.
Ottawa announced airport rent reform last May that will see Toronto's rent reduced by 6 per cent by 2012, while the next five biggest airports in Canada will see their rents reduced by an average of 52 per cent. By then, Toronto will pay 63 per cent of all airport rent in Canada, while carrying only 33 per cent of the air traffic.
The GTAA has been lobbying for changes, fearing it will lose market share not just to Canadian airports but also to nearby American airports that are subsidized.
Ottawa's new rent formula charges rent at a higher rate for airports with the highest revenues. Toronto is the only one to qualify at the highest rate. The GTAA, a not-for-profit corporation, says the only reason it needs the higher revenue is to pay for the $6 billion debt it had to take on to pay for the $4.415 billion airport redevelopment.
The GTAA says it's not fair that it was told to build a new airport through private financing and then have to pay higher rent.
Transport Minister Jean Lapierre has defended the new rent policy, calling Toronto the big winner because it will save $5 billion over the next 50 years. But Lapierre is facing heavy criticism from local boards of trades and municipal politicians.
He faces the Liberals' GTA caucus tomorrow
Edited: my emphasis in bold... another example of Ontario, GTA in particular getting the shaft?