OTTAWA – Terminal fees at Ottawa airport will be cut five per cent on July 1, saving airlines around $600,000, the Ottawa International Airport Authority’s chief executive said Monday.
Paul Benoit said the airline industry was in crisis following the skyrocketing cost of fuel and the weakened economies in Canada and the U.S.
“There was no discussion, there was no meeting with the industry, it was just us sitting down and saying, ‘Look, times are rough. Can we help?'” said Benoit. “This is not just an airline crisis, but one that impacts the entire industry and ultimately our communities.”
The general terminal fees are charged to carriers for common use space in the terminal, as well as things like technological support and cleaning services. The fees are charged per seat landed and currently amount to around $12 million per year.
Canada’s two largest airlines said they were grateful for the fee reduction.
Air Canada, which last week announced 2,000 job cuts, “salutes the Ottawa International Airport Authority and its president and CEO . . . for demonstrating leadership and foresight by voluntarily reducing its fees,” said Duncan Dee, chief administrative officer at Air Canada.
“Hopefully, today’s very welcome announcement will lead other industry participants, including the federal and provincial governments, to recognize the severity of the situation facing our industry and emulate the Authority’s decisive action through similar measures.”
WestJet was also relieved to hear about the fee cut at Ottawa airport.
“We thank the Ottawa Airport Authority for this reduction in fees,” said Ken McKenzie, executive vice-president, operations for WestJet. “The Ottawa Airport Authority has clearly taken a leadership position in recognizing a need to drive costs out of the system in light of record fuel prices . . . We encourage these (other) airports to follow Ottawa to do their part to ensure that air travel remains affordable for all Canadians.”
But Benoit said the cut at Ottawa was not a signal to airports across the country.
“I’m not beating the drum for others to follow my lead,” said Benoit. “At the end of the day this is not a challenge to other airports . . . . We were very lucky this year . . . we had a lot of additional flights added primarily by Air Canada that has put us in a situation where I am actually running above budget which is allowing me to do this.”
Vancouver International Airport Authority chief financial officer Glenn McCoy said the airport has no immediate plan to cut fees, noting it already reduced international landing fees significantly last year and froze all aeronautical rates and charges through 2010.
“We continue to work with our airline partners to figure out what else we can do to increase the efficiency of the airport and help them manage costs,” he said in an interview. “Needless to say, with the increase in fuel costs, their interest in that has obviously increased.”
The airport’s international landing fees were cut last year to bring them in line with domestic fees. The reductions created savings of 32 per cent for a large aircraft like the Boeing 777, 20 per cent for a Dash 8 and six per cent for an Embraer 175.
Edmonton Airlines are already getting a break at the Edmonton International Airport, said spokeswoman Traci Bednard.
The Edmonton Regional Airports Authority has not raised landing and terminal fees since 2005, she said. The authority also isn’t raising them in 2009, marking four years of frozen fees to airlines.
“Our sensitivity to airline costs didn’t just start with high oil prices,” Bednard said. “This was something that’s been very important to our executive for the past few years.”
The Edmonton airport has also maintained its airport improvement fee at $15 per departing passenger, despite embarking on a $1.1-billion expansion, Bednard added. The airport has stressed raising “non-aeronautical revenue,” including developing shops and services at the international airport. “A dollar that we can collect on land development is one dollar we don’t have to charge to airlines or to passengers.”