With passenger traffic sliding at the country's largest air terminal, Toronto's Pearson International Airport is chopping its landing and terminal fees charged to airlines by 10 per cent.
Air Canada and WestJet Airlines Ltd. were miffed this year when the Greater Toronto Airports Authority, which runs Pearson, raised the airport improvement fee charged to consumers to $25 from $20. Airline officials said the 25 per cent boost, which took effect June 1, sends the wrong message because it scares away recession-weary consumers.
Critics have long pushed for Pearson to slash its landing fees, and even with the latest reduction it remains the most expensive airport in the world for planes to land.
GTAA president Lloyd McCoomb said Thursday that Pearson understands the financial pressures on Canadian and foreign carriers, estimating $58.4-million in annual savings for airlines as a result of reduced landing and terminal fees that will take effect Jan. 1, 2010.
Landing and terminal fees were slightly reduced for 2008 and 2009, but with the latest chop, a Boeing 737 arriving at Pearson will incur $2,100 in landing fees and $1,000 in terminal fees, down from $2,400 and $1,200 charged, respectively, for 2007, said GTAA spokesman Scott Armstrong.
"This fee reduction is welcome because it helps us control costs in this challenging economic environment," Air Canada chief operating officer Duncan Dee said in a statement. Dale Tinevez, WestJet vice-president of guest services, praised Pearson for taking a "leadership role" in lowering rates for the volatile airline industry.
The GTAA noted that since 2007, landing fees have fallen 13.1 per cent and terminal charges are down 15 per cent, reaping forecast cumulative savings for carriers of $108-million through 2010.
The International Air Transport Association said Thursday that global carriers lost $2.3-billion (U.S.) in the second quarter, coming after $4-billion in losses in the first quarter. Premium seating has been hard hit, with fares tumbling 22 per cent at the front of the plane over the past year as corporations either cancelled or scaled back on booking business and first class.
But Brent Bowes, business development manager at the Plaza Premium Lounge, said Plaza's five common-use lounges at Pearson are positioned to attract more frequent fliers when the economy bounces back.
IATA sees tentative signals of a gradual recovery for the airline sector, with year-over-year international passenger demand down 1.1 per cent in August, compared with a 2.9 per cent drop in July.
Other measures already taken to ensure Pearson's long-term health have included freezing hiring, delaying capital spending and creating a 12-month rebate program on landing fees levied against carriers introducing new flights.