TOPIC - Not flying so high
(Originally published in the April 2012 issue of the Nova Scotia Business Journal)
The Hotel Association of Canada recently released its 2012 Canadian Travel Intentions Survey. Unfortunately, the results revealed an alarming trend.
More than one third of respondents had reportedly traveled to the United States in 2011 to purchase cheaper airline tickets. It is a trend which airlines estimate results in almost five million Canadians crossing the border to originate flights, in many cases to travel back to other parts of Canada.
For those of us not close enough to a border, we are stuck paying exorbitant rates or not traveling at all. Why are we at such a disadvantage? According to the International Air Transport Association (IATA), Canadian airports pay roughly three times the security fees compared to passengers in the United States, thus representing one of the most significant tax revenue streams for governments.
High airport rents, fees and taxes place Canada as one of the most expensive destinations for air travel. Competing countries have the same costs; it is simply the way our governments have decided to treat the Canadian aviation industry. The business model makes no sense in encouraging growth, so one must assume there is a lack of value being placed on a competitive aviation sector and its impact on travel and trade for the economy.
Since 9/11, most countries instituted the Air Travellers Security Charge. In Canada, passengers bear the fee almost exclusively while in the U.S., the cost is shared by the federal government which sees the transportation system as key to economic competiveness.
British Columbia is moving in the right direction. The province recently eliminated the aviation fuel tax for international flights, which is expected to save airlines $12 million next year. Also, since announcing its intention over a year ago, Vancouver International Airport has signed agreements with 22 airlines to encourage expansion. Not hard to follow the math on this.
Nova Scotia has a long way to go. I recently experienced this first hand. In January, some tourism colleagues from an international hotel firm wanted us to arrange a meeting in Cape Breton to explore a new business opportunity. The travel schedule was tight and flying was the only option. When we discovered that it would cost almost $1,600 per person to fly return from Halifax to Sydney, they cancelled the meeting. In this global economy, where a company can do business anywhere in the world, accessibility and cost become important factors when making decisions.
To create a more competitive business climate, it has to start with our customers being able to get to us — reducing the growing cost disincentive to travel here would be a good first step.
Darlene Grant Fiander is the president of the Tourism Industry Association of Nova Scotia and executive director of the Nova Scotia Tourism Human Resource Council. Darlene has worked in the tourism industry for over 25 years. You can reach Darlene at firstname.lastname@example.org