Wednesday, October 3, 2012

Canadians head to United States for cheaper flights

Changes in government funding policies for airports and greater competition in the air travel industry are essential to stem the annual flow of five million Canadians who cross the border for cheaper flights, said Windsor International Airport CEO Federica Nazzani.

A report by the Conference Board of Canada released Wednesday said lower airfares, fees, taxes, wages and aircraft prices make it 30 per cent cheaper to fly out of the U.S.

“Our industry, senate committees and now the conference board have essentially reached the same conclusion that we need changes if we are to become more competitive with U.S. airports and carriers,” said Nazzani. “Those five million Canadians who cross the border to seek cheaper flights represent $1.3 billion in GDP growth and 10,000 direct jobs.”

A report released by March by the Canadian Airports Council pointed out that U.S. fares on average are 55 per cent lower than in Canada and there’s also a greater selection of destinations, non-stop and direct flights from adjacent U.S. airports.

It’s big challenge for Windsor’s airport given the proximity of Detroit Metro and Detroit City airports.

Canadian airports have paid $3.3 billion in ground rent to the federal government over the past 20 years. Fees, taxes and surcharges are layered on top of ticket prices, encouraging many travellers to look elsewhere for cheaper flights.

Airports and navigational systems are paid for by user fees in Canada and government subsidies as in the U.S., said the conference board.

“We’re not looking to mirror the U.S. funding model because it’s not sustainable in the long run,” said Nazzani.

The conference board report says reducing fees and taxes would cut federal revenues in the short term but increase traffic through Canadian airports over the long term.

Since Porter Airlines joined the mix at Windsor the number of travellers flying to Toronto has increase from 13,000 to 58,000 in the past two years, Nazzani said.

The report also pointed out that when Canadian hub airports, such as those in Vancouver, Toronto and Montreal, lose traffic to cross-border rivals, it often leads to reduced flight frequencies, higher travel costs and poorer service.

 http://blogs.windsorstar.com