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Costs play a role in determining which airport to fly from

As the summer-that-wasn’t continues, there are probably more than a few of us thinking about the sunny south, typically a February thing.

If you are thinking about jetting off somewhere, south or otherwise, chances are you’ve checked out the rates available from Buffalo or perhaps Detroit, where rates are typically much cheaper. In that case, you’re the kind of traveller that the Canadian Airports Council (CAC) wants to woo back.

A lobby group for Canadian airports, including the Region of Waterloo International Airport, the CAC is pressing the federal government to eliminate rental fees on facilities and lower taxes to make its members more competitive.

If successful, the group’s efforts would be a boon for travellers, though perhaps not for government coffers, at least directly.

On a trip to Los Angeles in April, I flew from Buffalo. The airfare was less than half the cost of the closest rate available from Pearson, and the flight schedule more convenient. Though a little more driving was involved, we bypassed a good stretch of the 401 and enjoyed cheaper, more convenient parking. And much better duty-free options.

The airport in Breslau, while obviously offering the most convenience, was off the scale in terms of airfares. That’s typically been the case every time I’ve travelled, though I’ve certainly run across a few people who’ve found rates economical enough to fly out of that location.

For Jim Facette, the CAC’s president and CEO, the first step to making Canadian airports more competitive would be removing the $300 million in rent paid to the federal government by 26 of the nation’s biggest airports. (As you might expect, Toronto leads the way at $153.1 million in 2007.)

“The business environment that Buffalo operates under is dramatically different. Buffalo does not have the costs that Toronto has to endure,” he notes in an interview from his Ottawa office.

Those fees, the organization says, are the largest aviation tax of all. And, as they don’t exist in the U.S., or in most other countries, they put Canada at a disadvantage.

Neither government owned nor strictly private businesses, larger airports in Canada operate as something of a hybrid, unique in the world. Smaller airports such as RWIA are municipally controlled and receive some federal support, but the larger centres are a big disadvantage by comparison to U.S. airports, says Facette.

South of the border, airports get federal money – that’s especially true post-9/11 and in the current round of stimulus spending – and pay nothing back to federal coffers.

I’m certainly not alone in discovering that flying out of U.S. cities makes sense. According to the CAC, a third of passengers at Buffalo-Niagara International Airport are Canadian.  More than two million Canadians, in fact, may be flying out of U.S. border airports. While other U.S. airports have seen passenger decreases, these airports are generally growing – Buffalo reported its fifth consecutive record year in 2008.

“U.S. airports pay virtually no rent, no municipal taxes and are able to issue tax-free bonds. In addition, they receive billions of dollars in U.S. government funding,” reads a CAC report. “Again, this puts Canadian airports at a competitive disadvantage.  U.S. border airports such as Bellingham, Wash.; Buffalo, N.Y.; Burlington, Vt; Detroit, Mich.; and Plattsburgh, N.Y. each year attract millions of Canadians who choose to fly out of U.S. airports instead of Canadian airports because added taxes and fees in Canada make ticket prices higher.”

While my experience has been that flying out of Buffalo is cheaper, those rates still don’t compare to the savings you’ll find in Europe, where “bargain” takes on a whole new meaning. When I was in Switzerland last year, a flight from Geneva to Prague could be had for 32 Swiss francs ($32 Canadian at the time). Not good enough? How about Geneva to Belfast for 20 francs?

These were certainly no-frill flights on such carriers as Ryanair and EasyJet, where extra fees and out-of-the-way airports can come into play, but the deals are there for the determined. Those kinds of rates just don’t exist in Canada. It’s more than a little ironic that Europeans, with much less distance to travel and a plethora of good trains, have much better flight options than Canadians, who have much larger distances to cover.

For Facette, reducing operating costs to airports, which can in turn pass savings on to the airlines, would help to lower fares here. Given the importance of tourism, lower rates would translate into more dollars, he says, noting that the elimination of $300 million in rents could spawn an additional $700 million in economic benefits. The increase would flow from more passenger traffic, competition for transit stops for international flights and cargo traffic.

“Canadian airports welcome competition, but they’d like a level playing field. They’d like the ability to compete head-on. Eliminating rent is a step in that direction.”

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