Mandatory airport taxes and fees imposed by government and public agencies are adding about $100 to the cost of a ticket for Canadian travelers, WestJet Airlines Ltd. told the Commons transport committee. Blacklock's Reporter says the airline’s executives said the profit-driven practices of public entities, including the Department of Transport, are a major factor behind high travel costs.“Rail receives billions in subsidies though only a tiny fraction of Canadians use it,” said WestJet CEO Alexis von Hoensbroech. “If we were to receive the same per passenger subsidy VIA Rail gets, we could not just let everyone fly for free, we could hand them cash as they entered the airplane. That’s the reality in this country.”Liberal MP Vance Badawey (Niagara Centre, Ont.), parliamentary secretary for transport, pressed the airline on its pricing structure, particularly baggage fees and profit margins. “Look at your balance sheets and see exactly where you’re standing with respect to your margins, what you’re making,” said Badawey. “I want to see how credible those claims are by looking at the numbers on your balance sheet.”Von Hoensbroech defended the airline’s pricing, arguing that mandatory government-imposed fees, not airline charges, are the main issue. “Our fares are optional and transparent. Government and third-party fees are not,” he said. “Before Canadians even buy their ticket, government and third-party taxes, fees and charges can add as much as $99 to a ticket price. This is more than three times what it is in the United States, where similar charges are around $28.”Conservative MP Brad Vis (Mission-Matsqui, B.C.) criticized the Department of Transport’s fee structure, which he said disproportionately burdens travelers. “I will give you an example of the sky-high user fees and charges,” he said. “I parked my car at the Vancouver airport on December 8 and I picked it up on December 12 at the parkade adjacent to the departures area. The Vancouver Airport Authority charged me $325 to park my car. They doubled those costs without telling anyone.”Von Hoensbroech highlighted the impact of these fees on cross-border travel. “How much business do we lose to the United States because of the sky-high airport fees we are paying in Canada?” he asked. “We estimate about seven million Canadians go across the border to fly from U.S. airports.”Mandatory charges include federal airport rents, which generated $487.8 million in revenue last year, and the Air Travelers Security Charge, increased by 33% in 2023 to $20 for round-trip domestic flights and $34 for international flights. Travelers also face Airport Improvement Fees, which range from $20 in Charlottetown to $42 in St. John’s.“We estimate if the government and third-party imposed fees and charges were halved, which would be more in line with other countries, this would stimulate enough demand to fuel another airline the size of WestJet,” said von Hoensbroech.A 2016 statutory review of the Canada Transportation Act recommended eliminating federal airport rents and improvement fees, describing them as unchecked and burdensome.“Airport improvement fees have been growing with mad abandon,” testified former industry minister David Emerson, who authored the review. “At some point your customers are captive and there is a greater power imbalance.”
Mandatory airport taxes and fees imposed by government and public agencies are adding about $100 to the cost of a ticket for Canadian travelers, WestJet Airlines Ltd. told the Commons transport committee. Blacklock's Reporter says the airline’s executives said the profit-driven practices of public entities, including the Department of Transport, are a major factor behind high travel costs.“Rail receives billions in subsidies though only a tiny fraction of Canadians use it,” said WestJet CEO Alexis von Hoensbroech. “If we were to receive the same per passenger subsidy VIA Rail gets, we could not just let everyone fly for free, we could hand them cash as they entered the airplane. That’s the reality in this country.”Liberal MP Vance Badawey (Niagara Centre, Ont.), parliamentary secretary for transport, pressed the airline on its pricing structure, particularly baggage fees and profit margins. “Look at your balance sheets and see exactly where you’re standing with respect to your margins, what you’re making,” said Badawey. “I want to see how credible those claims are by looking at the numbers on your balance sheet.”Von Hoensbroech defended the airline’s pricing, arguing that mandatory government-imposed fees, not airline charges, are the main issue. “Our fares are optional and transparent. Government and third-party fees are not,” he said. “Before Canadians even buy their ticket, government and third-party taxes, fees and charges can add as much as $99 to a ticket price. This is more than three times what it is in the United States, where similar charges are around $28.”Conservative MP Brad Vis (Mission-Matsqui, B.C.) criticized the Department of Transport’s fee structure, which he said disproportionately burdens travelers. “I will give you an example of the sky-high user fees and charges,” he said. “I parked my car at the Vancouver airport on December 8 and I picked it up on December 12 at the parkade adjacent to the departures area. The Vancouver Airport Authority charged me $325 to park my car. They doubled those costs without telling anyone.”Von Hoensbroech highlighted the impact of these fees on cross-border travel. “How much business do we lose to the United States because of the sky-high airport fees we are paying in Canada?” he asked. “We estimate about seven million Canadians go across the border to fly from U.S. airports.”Mandatory charges include federal airport rents, which generated $487.8 million in revenue last year, and the Air Travelers Security Charge, increased by 33% in 2023 to $20 for round-trip domestic flights and $34 for international flights. Travelers also face Airport Improvement Fees, which range from $20 in Charlottetown to $42 in St. John’s.“We estimate if the government and third-party imposed fees and charges were halved, which would be more in line with other countries, this would stimulate enough demand to fuel another airline the size of WestJet,” said von Hoensbroech.A 2016 statutory review of the Canada Transportation Act recommended eliminating federal airport rents and improvement fees, describing them as unchecked and burdensome.“Airport improvement fees have been growing with mad abandon,” testified former industry minister David Emerson, who authored the review. “At some point your customers are captive and there is a greater power imbalance.”
