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It's been almost 20 years since the federal government announced plans to make Canadian airports responsible for their own destiny, and the Greater Toronto Airports Authority (which operates Lester B. Pearson Airport in Toronto) celebrated early by crowing at its annual public meeting on Wednesday that it recorded a $14.3-million profit in 2012 – its first net profit ever. Forgive us if we decide not to get them a gift; we've been opening our wallets for them for years, and we're getting sick of it.
Anyone who's compared the cost of flying out of a U.S. airport with a Canadian one knows that something is amiss, and calls for Canada to reduce the fees collected through its airport authorities have been growing louder. According to a Conference Board of Canada report last fall, every year five million Canadians choose to fly out of U.S. airports such as those in Bellingham, Wash., (rather than Vancouver) and Burlington, Vt., (instead of Montreal), where fares are on average 30 per cent cheaper.
Then last month, a Senate committee echoed the report's findings and argued that Ottawa should end the practice of charging rent from airport authorities. In the last 10 years, Canada's 26 busiest airports have forked over in excess of $2.5-billion.
Neither the airlines nor the federal government have much of a say on what fees airport authorities like the GTAA can charge. Airlines can't easily pull up stakes and go to another airport, while the feds can only lower or eliminate the rent, and hope that the authorities pass along the savings rather than spending them on building unnecessarily lavish new facilities.
The GTAA has argued that it needs to spend on upgrades to its terminals, and specifically, to speeding up the connecting process for international passengers, in order to lure flights away from hubs like Chicago and Atlanta. The organization isn't entirely tone-deaf: it plans to implement an average decrease of 10 per cent to landing and general terminal fees, marking the sixth consecutive year it cut fees or held them steady.
But that sensitivity may stem from the ridicule heaped on the GTAA when, in 2006, Pearson famously became the airport with the highest fees in the world, beating out Narita in Tokyo for the No. 1 spot. It's evidently reformed to a significant degree, but the thorn in the side of passengers remains – that the organizational structure of Canada's airport authorities makes it too easy for them to charge what they want, how they want, with little incentive to respond to price pressure. That pressure is entirely borne by the airlines, and with competition among them heating up, reducing their costs could be a matter of survival.
The federal and provincial governments, as well as nearby municipalities, are entitled to appoint members of the GTAA's board of directors. In addition to the feds ending the practice of charging airports rent, the government representatives on airport authorities' boards should be asking tough questions about fees, and doing what they can to keep frustrated passengers from buzzing off.
Dave Morris is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow Dave on Twitter at @morrisdave.