At The Gate: Crossing the great divide
The trend of Canadians driving to U.S. border airports to catch cheaper flights shows no sign of abating and has now spread to the Maritimes with Maine luring customers away from New Brunswick to airports in Bangor, Presque Isle and Portland.
February 24, 2011 By Brian Dunn
The trend of Canadians driving to U.S. border airports to catch cheaper flights shows no sign of abating and has now spread to the Maritimes with Maine luring customers away from New Brunswick to airports in Bangor, Presque Isle and Portland. It is estimated one in six Canadian travellers bound for the United States and overseas crosses the border to catch a flight instead of leaving from Canada. Vancouver, Winnipeg, Toronto and Montreal are the hardest hit among Canada’s major airports. Hamilton and Thunder Bay are also affected.
Edmonton has a different, but just as serious, problem. It’s losing traffic to Calgary and, in reaction, devised a marketing campaign last year with the slogan, “Stop the Calgary Habit.”
“We estimate that as many as 2.3 million Canadians flew to/from a U.S. border airport last year, via U.S. airports from coast to coast. And we believe the problem is only getting worse,” said Daniel-Robert Gooch, director, communications and policy at the Ottawa-based Canadian Airports Council. Last year, the council combined forces (called the National Travel and Tourism Coalition) with the major air carriers, hotel associations and tourism associations to develop two policy papers that were submitted to Ottawa on the issue.
The Greater Toronto Airports Authority (GTAA) estimates 1.82 million of Buffalo’s five million annual passengers come from Ontario, resulting in an annual net loss of $640 million in direct and indirect revenue and a loss of 2,400 jobs for the GTAA and surrounding area.
There are a number of reasons for this hemorrhaging, including cheaper fares as a result of more competition in the United States and aggressive marketing by some U.S. airports. Plattsburgh, N.Y., for example, bills itself as “Montreal’s U.S. Airport” with bilingual signage throughout the terminal.
In addition to Plattsburgh, Montreal’s Trudeau International must compete with Burlington, Vt., which is also luring traffic south with discount carriers offering enticing deals to sun destinations.
What grates Montreal, which loses an estimated 200,000 passengers a year to Burlington and Plattsburgh, is the free ride Plattsburgh International Airport is getting; the airport terminal is 100 per cent subsidized and pays no rent. “And it has the audacity to advertise itself as Montreal’s U.S. Airport,” said James Cherry, president and CEO of Aéroports de Montréal.
But Cherry is more upset that governments are undermining all Canadian airports’ ability to be world class due to overbearing costs. “We pay more than $40 million in taxes to the City of Montreal and about the same in rent to Ottawa. That’s close to 20 per cent of our revenue and we’re not getting anything back,” he says.
Even the International Air Transport Association (IATA) is getting into the fray. IATA president Giovanni Bisignani noted in a luncheon speech before the Montreal Council on Foreign Relations that when he joined the organization in 2002, Canada was the eighth most visited country in the world. Today, it has slipped to 15th place, which he largely blamed on the exorbitant rents Ottawa charges Canadian airports.
There’s hope the situation will change. A Senate committee is looking at various aspects of Canada’s cost competitiveness, including airport rent and landing fees, border leakage, and tourism, with Transport Canada playing a major role in the discussion. A report is expected to be released later this year.
In the meantime, Canadian airports realize they have their own role to play. For example, Pearson has reduced passenger landing fees by 20 per cent since 2007 and cargo landing fees by 40 per cent. The customer experience has also been enhanced through improved valet parking, value parking garages, and free Wi-Fi and mini pop-up movie theatres throughout the terminals.
Vancouver doesn’t have any numbers, but seepage to the United States represents “several million dollars,” according to John Korenic, director of aviation marketing, Vancouver International Airport.
In response, Vancouver is trying to promote benefits for passengers such as no border hassles and easy customs pre-clearance. The airport has also introduced an incentive program through which airlines can get rebates based on traffic growth. In addition, B.C. will eliminate the provincial fuel tax on trans-border and international flights in April 2012, and is providing marketing dollars to promote new routes.
Brian Dunn is a Wings writer and columnist.