Pearson International AirportFred Lum/The Globe and Mail
Canada is losing out in the global race to woo travellers because of hefty taxes and other airport-related charges, says the head of the International Air Transport Association.
Giovanni Bisignani, director-general and chief executive officer of the group that represents 230 air carriers, said excessive taxation and regulation in Canada are hobbling efforts to attract visitors.
He also called on Ottawa and other governments to work more closely with the air travel industry and in a smarter fashion in the fight against terrorism. There should be less emphasis on "one-size-fits-all screening" or shoe scans and bans on shampoo bottles, with a more targeted approach using government intelligence to root out dangerous passengers at airport checkpoints, he said.
"Instead of having policies to welcome more visitors, Canada's excessive taxes turn them away. Compared to the U.S., a visit to Canada is $160 more expensive," Mr. Bisignani said in a speech to the Montreal Council on Foreign Relations on Thursday.
"When I joined IATA in 2002, Canada was the eighth most visited country in the world. Today, it's 15th," he said, pointing out that tourism accounted for 650,000 jobs and $71-billion in spending in Canada in 2009.
Among airport revenue-generating sources for Ottawa are the Air Travellers Security Charge, aviation fuel taxes and the GST.
In addition, Canada's airports paid $257-million in federal rent in 2009, "an unnecessary competitive disadvantage," said Mr. Bisignani.
"No other country in the world uses this archaic scheme to tax infrastructure. Along with discouraging visitors, the added costs encourage Canadian travellers to start from the U.S. instead of starting from Canada," he said in reference to lower-cost U.S. airports that are poaching Canadian travellers.
Frédérik Boisvert, of the Transport Minister's office in Ottawa, said in an e-mail Thursday that the government "is totally committed to helping maintain competition in the Canadian aviation industry. Airline ticket prices contain a variety of fees and charges, of which airfare is the largest. Only a few are implemented by the federal government, the balance by non-government entities or other governments."
Mr. Bisignani said after the speech he's "really surprised" that the Canadian government doesn't seem to realize that its airport policies are having a major negative impact on tourism.
James Cherry, the president of Aéroports de Montréal (Montreal's airport authority) said after the speech that governments still have an outdated notion that air travel is mainly for "rich people" and that it's all right to use it as a "cash cow rather than as a catalyst for economic development."
In his speech, Mr. Bisignani warned that 2011 will be a "challenging" year for the world's commercial air carriers. "Profits will drop by 40 per cent to $9.1-billion (U.S.), which will mean a 1.5-per-cent margin." Even last year's record profit of $15.1-billion represented only a 2.7-per-cent margin on revenue of $565-billion, he said.
On the security front, he said it's crucial that more effort be put into using government intelligence to target individuals who should be more closely inspected at airport checkpoints. "We must use the intelligence from government and airline sources to match checks with the passenger's risk level."
Mr. Bisignani, whose term ends in June, said his long-term vision is for "hassle-free tunnels of technology" in which passengers would be identified with their fingerprint, biometric passport and bar-coded boarding pass on their mobile devices. After being assessed, they would walk through a high-tech tunnel that checks for all forms of security risks without the need for unpacking, undressing or pat-downs.
Bertrand Marotte