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An insider’s outlook: Q & A

WINGS recently sat down with ATAC president/CEO John McKenna to discuss the key issues facing the air transport industry in Canada. Air Navigation fees, SMS, costs, Bill C-310 and high speed rail were top of mind.

April 14, 2010  By Frederick K. Larkin

WINGS recently sat down with ATAC president/CEO John McKenna to discuss the key issues facing the air transport industry in Canada. Air Navigation fees, SMS, costs, Bill C-310 and high speed rail were top of mind.

John McKenna 

Highlights of the Question and Answer session include the following:


Q| What were the costs to the air transport industry related to the Olympics? Do you envision a similar experience with the G20 summit?

A| There were many direct and indirect costs incurred by carriers during the 2010 Olympic Games. These included detours en route and extra stops to access Security Gateways, some of which were profiting from the situation by charging exorbitant access fees, restricted operations which limited flight time windows, and little or no tourist flights authorized in Vancouver air space, just to name a few. These restrictions resulted in less revenues and increased costs for operators. We are indeed afraid that the government will adopt the same “Security at all costs,” “Too bad for the little guy” and “Notify rather than consult” attitudes for the upcoming G20 meeting in Toronto.

Q| Does ATAC support SMS and are smaller operators capable of implementing it?

A| ATAC fully endorses SMS. There is resistance both on the part of operators and some Transport Canada personnel and such a reaction must be addressed. Smaller operators are certainly capable of implementing SMS, but not the SMS found in larger operations. Safety Management is the objective, not a unique model. SMS has to be designed to suit the smaller operators because they simply don’t have the same management structures as that of larger operators. For SMS to work for the smaller operator, TC has to accept the principle that one size doesn’t fit all. ATAC is in the process of drafting a SMS Guide designed for 406, 703, and to a certain extent 704 operators, which would help them through the implementation stage. This guide will address the issue of “How to make SMS happen” in plain language, away from TC speak.

Q| Do you foresee any relief on the horizon regarding Air Navigation fees?

A| Operating an airline is a very expensive ordeal. Air Navigation costs, landing fees, jet fuel, fuel excise taxes, insurance, security, just to name a few, are very significant. Add to that Airport Improvement Fees and the Air Travellers Security Charge that passengers have to pay in addition to the price of their ticket, and it makes it very difficult for air transport to be a competitive mode of transportation. We fear that Nav Canada will increase user charges since traffic has dropped steadily since September 2008, but the level of service hasn’t. We petitioned Nav Canada last Spring to review its expenses before increasing user charges. We are happy to report that that seems to be the case, but we expected no less. Unfortunately, we don’t expect any relief in the future. On the contrary, we unfortunately expect many costs to increase.

Q| What is ATAC’s view towards the proposed Bill C-310 and do you anticipate it being enacted?

A| ATAC was against this proposed legislation for four major reasons. First, the way the bill was drafted, safety took a back seat to finances. The push-back decision made by the pilot should be based solely on safety concerns, not financial considerations. Secondly, we won’t want outlying regions that are subject to marginal flying conditions to lose the level of service they enjoy because carriers would simply decide not to offer services out there rather than constantly be subjected to fines for delays and cancellations. Thirdly, not all airports are the same in Canada. Of the 600 or so airports, most don’t enjoy the same infrastructure that Canada’s eight largest airports offer. Some don’t even have terminals. You can’t expect them to offer the same level of service. Finally, we can’t accept that the fines paid by a carrier could exceed the very price of the ticket. We don’t expect Bill C-310 to survive the legislative process, but we do expect legislation in this matter to be tabled again soon.

Q| Does ATAC anticipate any emissions related fees/taxes to be imposed on the air transport industry in the near future?

A| ATAC and the Canadian carriers have been monitoring GHG emissions for many years. Emissions are continually dropping as technology improves and awareness increases. As of yet, we have no indications that a fuel emissions trading scheme similar to that found in Europe is in the works here in Canada.

Q| High speed rail continues to be a romantic concept supported by some. Do you expect such a project to ever proceed within Canada or could economic and operational issues derail such an enterprise?

A| High speed rail (HSR) is always the first project to surface when large infrastructure projects are needed to boost the economy or some party campaign platform. ATAC believes in multimodal transportation because no single mode can meet all needs. Realistically speaking, however, we don’t feel that HSR is a viable solution in Canada. We simply do not have enough population to warrant or support such a huge investment. We can’t endorse a competitive mode of transportation that would be financed both for its infrastructure and for its continued operations with our tax dollars. The government has to bail out passenger rail in Canada as it is. Even proponents agree that for HSR to survive, air carriers would have to agree not to compete on those routes served by the new rail system. In addition, the environmental consideration is greatly lessened when you consider that a whole new track would have to be developed since the present ones are dedicated to freight transport and not designed for high speed.

Q| Air Canada, Jazz Air, WestJet Airlines and Air Transat resigned from ATAC in April 2008. Has there been any shift in ATAC’s mandate or in the way it operates since then?

A| Not at all. ATAC has always been about serving its members, big and small.


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