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Fed tax has airline revenues in a tailspin
By Michelle Mark, Calgary Sun Canada's airline industry is hurtling toward disaster as soaring fees ground travelers, says a new industry report. "The explosion of fees and charges on airline tickets is clearly discouraging Canadians from traveling," Cliff Mackay, president and CEO of the Air Transport Association of Canada (ATAC), said yesterday. "It's having serious effects on consumers, businesses and the many small communities who depend on access to air transportation." A controversial $24 round trip levy was tacked onto tickets last April to pay for upgraded airport security. Calgary-based WestJet has called on the feds to administer the surcharge differently, arguing the amount of the levy should depend on distance travelled rather than a flat $24 round trip rate. ATAC and York University Economics professor Dr. Fred Lazar released a report yesterday titled A Crisis in Costs -- The Canadian Government and Airline Passengers, outlining the economic impacts of increased fees and surcharges on the industry. "There is a crisis developing in the Canadian airline sector," the report says. "Consumers are already reacting to travel costs which have increased sharply this year -- but airlines are confronting myriad new costs which will, inevitably, be passed on to those same consumers. "As traffic declines the economic damage spreads from airlines to the rest of the travel industry, to workers and to communities." WestJet spokeswoman Siobhan Vinish said while passengers pay more due to the tax, airlines are left holding the bag. "This report is a step in the right direction in that we have hoteliers, chamber associations, airlines and ATAC standing together saying how this is impacting all of them as a whole," she said. "We strive to keep fares low, but all of these uncontrollable costs are having a negative impact on the industry." Since the security tax was implemented,
WestJet has been forced to cut flights between Calgary and Edmonton and
Kelowna and Vancouver and is considering chopping flights between Hamilton
and Ottawa. |
