Why Canadian airports are so expensive and inefficient

Discussion in 'Air Canada | Aeroplan' started by guinnessxyz, Oct 27, 2012.  |  Print Topic

  1. Government taxes and fees have long carried the blame for the noncompetitive nature of Canadian airports and for the bleed of nearly 5 million passengers a year in search of cheaper flights south of the border.
    But not everyone agrees taxes and fees are the primary source of what ails the air travel industry in Canada. Howard Eng, chief executive of the Greater Toronto Airport Authority, which oversees the country’s busiest airport, Pearson International, is one of them.
    Mr. Eng argues that while reducing various government fees — such as airport rents, security charges, and fuel excise taxes, will certainly help — the federal government would be better served focusing on a national strategy to increase the number of passengers flying to the country. This would include the elimination of red tape for passengers transferring onto other destinations, streamlining the customs process, and making the country a focal point for travel in emerging markets like India and China...

    http://business.financialpost.com/2012/10/27/why-canadian-airports-are-so-expensive-and-inefficient/
     
  2. iterfacio12

    iterfacio12 Silver Member

    Messages:
    239
    Likes Received:
    295
    Status Points:
    460
    Incredibly interesting article. Thanks for sharing.
     
    TRAVELSIG, LETTERBOY and uggboy like this.
  3. uggboy
    Original Member

    uggboy Gold Member

    Messages:
    50,183
    Likes Received:
    133,438
    Status Points:
    20,020
    WOW! Absolutely amazing insights, thanks for sharing!
     
  4. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    "A Conference Board of Canada report earlier this month garnered a lot of attention by concluding if the federal government were to change its policies, including reducing or eliminating many of the fees and taxes it levies on the industry, it could potentially bring two million passengers back to Canadian airports a year."

    "If the pie gets bigger, everyone’s slice of the pie gets bigger."


    Thanks for sharing this. We don't see enough of the business side of airports. They, to me, are far more interesting (and profitable) than carriers.

    This article hits on some amazing concepts. Charge fewer/less taxes and offer more flexibility, and people will do more of something!

    Though far away from our isolated North American eyes, look at the competition between privately held MEL and privately held SYD for Chinese traffic into Oz. MEL is crushing it vs. SYD. Lower fees, more accommodating service has a funny habit of winning.

    MEL hired Chinese natives to be the reps interfacing with the Chinese carriers and updated their entire airport to include signs in Mandarin. As a result, of the biggest growth market in Australian aviation, MEL is winning he lion's share.

    Funny how money serves as an incentive.
     
  5. Canadi>n
    Original Member

    Canadi>n Gold Member

    Messages:
    1,956
    Likes Received:
    1,617
    Status Points:
    1,120
    It was Mulroney who introduced the concept of User Pay and started all this in motion. NAVCAN makes money and is light years ahead of the US ATC system in modernization and being unaffected by politicians. In the US, everything is at the beck and call of politicians, and the FAA has been put in peril by the Republicans in Congress freezing appropriations.

    As for MEL, it takes 20-minutes to get from security and immigration through the airside shops to get to the gates and lounges! Same with the Duty Free upon entry. Airports in too many countries have become shopping malls and are more interested in selling things than moving passengers! As for SYD, it is more constrained by its location, boxed in with no place to expand and too close to suburbs for all-night operations, unlike MEL which is out in the sticks with lots of spare capacity. And by the arcane terminal structure left over from the Ansett/QF duopoly.

    The YYZ rail line will be a failure because most traffic goes to the suburbs, not the inner city. And it will cost too much to be competitive with other means of transport (particularly for more than two people sharing a cab anywhere in the GTA) and require some form of transit at Union Station. Long overdue, but it needs to be like YVR's LRT with a fare of no more than $5.

    (I thank the OP for finally respecting copyright and posting a link and source for this content.)
     
  6. Actually YYZ is an efficient airport, T1 specifically, and one can go from curbside to gate in a very few minutes even at busy times. Having a Nexus/GE card makes it even faster. T3 is almost as fast.
    Missing from the piece is mass transit that could deliver passengers to the curb in an economical manner. It now costs $50/60 each way by taxi or up to $29 per day for convenient parking and even those lots are getting overused. So, at least, the federal government should be pouring their profits back into an infrasructure that supports easier and cheaper access.

    By hiving off YYZ (I'm just using this as a Canadian example) to a PPP the government avoided the debt in modernizing the airport but is making substantial profits on rents while the partnership struggles to pay it down and keeps increaing AIF's.

    The user pay model is becomng a giant failure and is partially what drives consumers to US airports. I did like one thought in the article and that is connecting a regional airport like BUF to YYZ through some efficient transfer transportation model.

    Efficient airports and lower cost ones that in particular are gateways, make for more visitors to the location. In the case of Canada, a trading nation, we need to be concerned about runaway airport costs. I beleive LHR is the model for overcharging and, while it isn't suffering too much from that now, I think other European gateways will develop ahead of them as people come to eventually avoid that airport. I think I'm actually seeing (personal observations only) some of that because business class seats seem to be more avalable to/from NA due to the LHR AIF fees that are charged by class of service.
     
  7. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    I disagree with your assertion that it takes 20 minutes from security to the gates at MEL. You can be to either domestic or international QF Clubs (in their respective terminals) in a matter of minutes...more like 5 minutes at worst. That said, more than enough people buy things going through the airport to justify the use of space.

    Indeed, MEL has a material spacial advantage over SYD. MEL makes more profit from using its grounds than anything else these days. :) As to MEL's arcane terminal structure, the main challenge holding back a better all-in terminal setup is the government's surprise granting of the QF domestic terminal to QF on the eve of the broader privatization in the mid-90s. QF hasn't been a willing partner to do anything with its domestic terminal there. Very frustrating for Chris W (CEO).

    Both MEL and SYD are wildly profitable airports. Airports should generate a profit - that gives them the ability to continuously refresh and renew - and attract more traffic (which is what they're supposed to do)! The same way that seaports complete.
     
  8. Stephan

    Stephan Silver Member

    Messages:
    250
    Likes Received:
    90
    Status Points:
    375
    I think this is one of YYZ's biggest problem. I don't mind flying there, but it's the trip into the city that is a royal PITA.

    LHR is probably by far the worst now. They will reap what they have sown with those exorbitant charges. Also, most people I've met hate it and try to avoid it due to the poor infrastructure. Even the mess that is FRA is a more a pleasant experience. At least once you're out, you can actually get somewhere efficiently.
     
  9. TRAVELSIG
    Original Member

    TRAVELSIG Gold Member

    Messages:
    3,942
    Likes Received:
    5,509
    Status Points:
    4,145
    Very interesting and Thank You for sharing.
     
  10. sfo1
    Original Member

    sfo1 Silver Member

    Messages:
    956
    Likes Received:
    825
    Status Points:
    795
    Unfortunately it is not $5.00 for the YVR's LRT, there is a $5.00 addfare plus the regular fare from 1 to 3 zones, so to go downtown or to Richmond, it would cost $7.50, to Surrey $10.00, so if there are two people travelling together, it would be just as cheap to go by taxi to downtown or for that matter to Richmond, which is less than a 10 minute ride away.
     
  11. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    The YYZ rail line will not do much for me personally as I need to drive W of YYZ.

    But are there any details on the rail line yet? Will it have additional stops, at, say, Sheppard and Bloor subways? Being able to take subway + light rail to YYZ wouldn't be so bad.
     
    YULtide likes this.
  12. YULtide

    YULtide Gold Member

    Messages:
    2,747
    Likes Received:
    10,556
    Status Points:
    10,520
    Or just fly to YTZ. Now if only AC's engine would offer me a YEG-YTZ itinerary....
     
    tomh009 likes this.
  13. They could but it would require a code share with the TTC. :D
     
    YULtide likes this.
  14. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    Realistically YTZ will never have long-haul flights, so I think the best plan is to make it easier for people to get to and from YYZ. I'm just curious as to how close the planned rail line will be to this idea ...
     
    YULtide likes this.
  15. YULtide

    YULtide Gold Member

    Messages:
    2,747
    Likes Received:
    10,556
    Status Points:
    10,520
    True, though they still haven't reached the range of a Q400. YEG is a little far, but YWG is within range.
     
    guinnessxyz likes this.
  16. That airport will reach a peak before too long IMHO
     
  17. tomh009
    Original Member

    tomh009 Gold Member

    Messages:
    2,258
    Likes Received:
    1,819
    Status Points:
    1,220
    Looks like they will use the GO tracks (makes sense) with a spur from the YKF line to the airport. Service from Union Station but stops also at Bloor (subway access, I presume) and Weston (parking, but no subway) stations. Service every 15 minutes.

    http://www.metrolinx.com/en/projectsandprograms/airraillink/air_rail_link.aspx
     

Share This Page