The Honourable Marc Garneau, P.C, M.P.
Dear Minister,
Attention- As per a recent study of Airport Council of Canada, as reported by the Canadian Press (2013), 4.8 million Canadian fliers, in the past, preferred to board American flights instead of Canadian carriers, causing the monetary loss of $1.1 billion to the economy besides 9000 job losses to the country. This is despite the fact that the Canadian airports offer one of the best infrastructure and facilities in the world to the fliers. This calls for an urgent need to take the remedial measures to bring back the Canadian passengers to the indigenous airports. (Source- Macleans)
Interest-The trend shown by the Canadian passengers to cross the border and board the flights from American airports has been growing for the last few years. This is evident from the significant leakage of passengers from the Canadian airports to their American competitors. As per the report of Globe and Mail (2012) found in the Governance of Canadian airports (2014), the airports on the border of America and Canada are the worst hit with Windsor airport losing as much as 94% air traffic to the airports located in south border. Further investigation reveals that no passenger would like to cross the border and use a foreign carrier unless there is a greater monetary saving. In other words, the airfare charged by the Canadian airport authorities seems to be exorbitant for the Canadian passengers.
It is pertinent to examine the factors contributing to the increase in air travel cost for Canadians. As per the report of The governance of Canadian airports (2014), Airport Improvement Fee on the base fare charged by the Canadian Airports is $20 compared to $9.20 charged by the US counterparts; security fee at Canadian airport is $12.10 against $5.12 by the US competitors; sales tax levied by Canada is $14.17 whereas the US doesn’t charge any such tax. All these higher taxes charged by the Canadian authorities are eventually passed on to the passengers in the form of higher airfare. No wonder, the Canadian passengers find US airports 30 percent less expensive than the Canadian airports. Therefore, there is a need to address the issue of the Canadian Passengers by reducing the airport fee. (Source- Governance of Canadian airports).
Desire- After analyzing the data, it has been found that the substantial part of the airport fees is due to the high land rent charged by the federal government. This means any reduction in the land rent can have a significant impact on lowering of airport fee. This will, no doubt, cause financial loss to the government in the long run. However, the compensation can be done, to some extent, in the form of sales tax on the commodities sold at the airports. Besides this, more number of fliers at the airports will create demand for other goods and therefore will provide a fillip to the economic activities in the vicinity.
Action- The biggest benefit of the fee reduction is the restoration of the faith of the Canadian people in the indigenous set up. Consequently, the travelers from Canada will no longer shy away from the domestic airports in search of a better deal-something that every Canadian would welcome. Airports are the public property aimed at providing comfortable and reasonably priced service to the countrymen. All possible efforts in attracting the crowd to these places will benefit everyone in the course of time.
Thank You,
Sincerely yours
Administrative Assistant for Quest
