Airlines Object to Unjustified Rate Increase at Toronto Pearson International Airport

ATA Says Canadian Government Rent Policy Threatens Growth of Airport as Intl. Gateway

WASHINGTON, Nov. 15 /PRNewswire/ — U.S. airlines today vehemently objected to a 6.9 percent increase in landing fees being instituted at Toronto Pearson International Airport. The Air Transport Association (ATA), the trade association of the principal U.S. passenger and cargo airlines, said the increase in fees at this important international gateway is a direct result of the Canadian government’s increase in the crown rent it will charge the Greater Toronto Airport Authority.

“The Canadian government appears to be treating Toronto Pearson Airport as if it were a resource to bolster assets rather than an opportunity to enhance economic growth,” said ATA President and CEO James C. May. “The continued insistence of the Canadian government to charge exorbitant rents flies in the face of sound logic and good business sense at a time when the airline industry can ill afford any increase in external costs. Toronto is an important market for U.S. airlines, but this move could threaten growth opportunities at Pearson.”

Already one of the most expensive airports in the world to operate, Toronto will see an increase in its rent while the federal government, in May 2005, announced a plan to decrease crown rents for every other major airport in Canada. Other major airports such as Vancouver, Montreal and Calgary will see double-digit decreases in their rents through 2010.

In 2006, the federal government will take in $148 million in rent from Toronto Pearson, and rent makes up 34 percent of airline landing fees at Pearson. Unfortunately, this rate hike, set to take effect on Jan. 1, 2006, is not slated to be reinvested in aviation infrastructure.

“With a higher cost structure at Pearson, airlines could be left with no choice but to serve southern Ontario through nearby U.S. cities such as Buffalo, Detroit, Chicago and even New York,” May said. “This unjustified rate hike truly puts Toronto at a competitive disadvantage.”

U.S. airports generally do not pay rent to the U.S. government, but are required by federal law to reinvest airport rates and charges back into the maintenance and improvement of the infrastructure.

ATA Airline Members: ABX Air, Inc., Alaska Airlines, Inc., Aloha Airlines, American Airlines, Inc., ASTAR Air Cargo, Inc., ATA Airlines, Inc., Atlas Air, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Evergreen International Airlines, Inc., FedEx Corporation, Hawaiian Airlines, JetBlue Airways Corp., Midwest Airlines, Inc., Northwest Airlines, Inc., Southwest Airlines Co., United Airlines, Inc., UPS Airlines, US Airways, Inc.; ATA Airline Associate Members: Aeromexico, Air Canada, Air Jamaica Ltd., Mexicana; ATA Industry Members: Aero Instruments & Avionics, Inc., Benfield Group, Bombardier Regional Aircraft, Cendant Corporation, Embraer, KPMG, Metron Aviation, Inc., Pratt & Whitney, SITA, TDG Aerospace, Inc., TIMCO Aviation Services, Unisys Global Transportation, USI Insurance Services, WinWare, Inc.

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