New Charges at Toronto Airport Ignore Airline Community's Call For Cost Control

Airlines are incensed, IATA says, by the Greater Toronto Airport Authority's decision late last week to implement a steep 27.7% increase on the landing fees and a 19.6% increase for the general terminal fee, despite calls for an emergency cost control effort at Canada's largest airport.

"We are outraged by the GTAA's continued abuse of its monopoly position," said Giovanni Bisignani IATA Director General and CEO. "For months we and the Air Transport Association of Canada have written letters, called for better communication between GTAA and its customers and even raised public debate over the need for better airport management and meaningful consultation with airlines. GTAA is ignoring our appeals."

Mr. Bisignani cited evidence that GTAA has diminished airport efficiency and productivity since taking the reins in December 1996. Toronto is at the bottom of the top 30 airports in terms of traffic, yet it is in the top 10 most expensive. Passenger numbers and revenues have steadily declined, whereas staff costs and operating costs have risen steeply. The fee hikes clearly show that GTAA plans to charge the airlines to make up for those losses.

Comparing projected 2004 figures to 1998 results, the airport will see drops in airport staff productivity (-34%), aircraft handling efficiency (-22%), and passenger handling efficiency (-19%). Non-airline revenue will be down by 36%. For the same period, staff costs per passenger show an 88% increase, and the operations and maintenance costs per passenger have soared upward by 140%. "Considering this dismal performance record, it is amazing that the GTAA has the nerve to impose these fee hikes," Bisignani said.

IATA fears that Ottawa has fallen asleep at the switch, failing to do anything about the GTAA and the government's flawed National Airports Policy. A partial remedy to this situation could also come from a review of the Canadian Government's ground rent policy that extracts more than $130 million from Toronto's airport - yet another cost passed on by GTAA to its customers.

"The situation has gotten out of hand and airlines and their passengers need immediate action to get relief from spiralling costs," Bisignani said. "What we want from GTAA is concrete measures to achieve cost reduction and efficiencies. What we need from the government is economic regulation of airport monopolies and improved governance of airports."

The fee increase announced Friday, October 24, will take effect January 1, 2004. General Terminal fees are levied on a passenger seat basis. Landing fees are levied on aircraft weight.