June 6, 2013, OpenJaw – Industry Execs Balk At “Mind-Boggling” Hike For Canadian Air Security Charge
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At a time of steady inflation across the country and increasing fares, a new security charge for airline passengers in Canada is sparking concerns of even higher resulting airfares.
As part of a move to strengthen airport security, Ottawa in March slipped a nearly 33% hike in the Air Travellers Security Charge into the Liberal government budget. Although the new fees only kick in next May, airlines are already apprehensive about higher prices for flights in Canada.
Writing on his Linked In page, Nick Careen, Senior Vice President Operations, Safety and Security at the International Air Transport Association (IATA), said the charges are mind-blowing.
“In less than 12 months, the already most expensive security charge in the world will increase by almost 33%. How Canadians can sit back and accept this is mind boggling.”
Federal documents state that the ATSC will rise by 32.85% starting May 1, 2024. The charges will increase as follows: $9.94 for a one-way domestic flight (from $7.48), $19.87 for a round trip domestic flight (from $14.96), $16.89 for a transborder flight (from $12.71), and $34.42 for an international flight (from $25.91).
“It is incredibly disappointing to see yet another rate hike imposed on travellers in this country,” said Duncan Bureau, the Chief Commercial Officer at Canada Jetlines and a long-time Canadian aviation executive. “Rate increases of 33% are offensive, and consumers need to understand that these costs are not driven by the airlines, that these are imposed by the federal government.”
Bureau said Ottawa “is very quick to increase costs on airlines with poorly thought-out passenger rights legislation, while taking no accountability for their part in aging airport infrastructure, lack of resources for CATSA or NAV CANADA, and for bureaucratic and cumbersome airport management structures. The lack of transparency of where these funds actually go is another issue that should concern every traveller.”
Open Jaw retail analyst, Rocky Racco, owner & CEO at TTI Travel, said that for years he’s held the position that Canadian travellers are treated like “tax mules.”
“Adding additional taxes and surcharges to the cost of an airline ticket is nothing new and continues to serve various third parties to the detriment of the travelling public and travel agency community,” he said.
“What’s even crazier is that the overall cost of a ticket over the past 40 years hasn’t gone up compared to the cost of living and inflation. Back then, a ticket to Europe was in the range of $1,000, but the International Tax included in the fare was only $40. So, I guess that’s why the consumer isn’t fully outraged.
“However, the travel agency community gets paid on the base fare, which is in many cases half the cost, so once again we are caught between a rock and a hard place. And there’s no one to listen to our side of the story.”
In a post on his Linked In Page, Harry Grewal, Director Airport Infrastructure & Customer Experience at IATA, said a family of four will have to pay roughly $140 to take an international vacation.
“It’s robbery considering the level of performance and service one experiences,” he said.
Reached at an IATA conference in Istanbul, National Airlines Council of Canada President and CEO Jeff Morrison told Open Jaw that high taxes and fees imposed on Canadian airlines and travellers “create a disadvantage for Canada’s aviation industry versus other jurisdictions, impacting connectivity, competitiveness, and the cost of travel.
“The increase to the Air Travellers Security Charge is yet another fee increase that will make travel less affordable for Canadians,” he said. “NACC continues to call on the Government of Canada to work with airlines and the aviation ecosystem to make the Canadian air travel system more competitive by undertaking a full review of all fees and service charges.”
When the fee hike was announced, Morrison said the extra charge could put Canadian airlines at a competitive disadvantage with their international rivals.
“Over the past several months we’ve seen this almost kind of drip, drip, drip effect of a long list of fees and charges that are getting increased,” he said.
Writing on Linked In, Fred Lazar, Board Advisor, Air North, said the security fee is a hidden tax that most Canadians don’t even know exists.
“Airport security is part if overall national security and should have been funded by general tax revenues from the outset.
When the increased fees were announced in late March of this year, the CBC noted that the security charge was first implemented in 2002 after the Sept. 11 attacks. The network said the fee didn’t go up again until 2010, when the cost jumped by more than 52%.
The Liberal government said at the time that it has earmarked an extra $1.8 billion over the next five years for the Canadian Air Transport Security Authority (CATSA) to “maintain and increase its level of service” in airport screening and overall security.
But it said those improvements had to be paid for, which is why the Air Travellers Security Charge was set for an increase.
The CBC said Prime Minister Justin Trudeau defended the fee hike.
“There need to be investments to improve the experience of air travellers,” Trudeau said. “But we feel it’s only fair that those Canadians who are travelling are shouldering a little bit more of that burden, because the alternative would be all Canadians would be contributing with their tax dollars.”