Abbotsford to eliminate airport improvement fee

Abbotsford International Airport is set to eliminate its airport improvement fee (AIF) in June, drawing praise from air carriers who hope it will create a spike in passenger volume.

The airport plans to eliminate the $5 fee from all airline tickets on June 1, a popular move with airport partners like WestJet and NewLeaf Travel, who both see the city-owned facility on the southern coast of B.C. as a key destination.

“Low fees allow us to keep us to keep the costs of travel competitive, and it provides the opportunity to build service into the area,” said Lauren Stewart, a WestJet spokesperson. “We support low fees from any of our airport partners.”

NewLeaf, a reseller of airline seats that offers ultra-low-cost flights with its partner Flair Airlines, is hoping lower fees will promote travel for the sake of travel.

“Often that’s just strictly driven by price point,” said Julie Rempel, a NewLeaf spokesperson.

“If that price point becomes more and more attractive, we’re going to be putting more and more people in different airports. So it’s a circle, and we’re proud to be a part of it.”

Abbotsford is the first airport in Canada to eliminate its AIF without increasing other fees according to the city’s mayor, Henry Braun.

The fee has traditionally been put toward capital improvements and debt associated with capital improvements, but that is no longer a pressing concern.

Abbotsford airport has almost $18 million in reserves and expects to continue banking an average of $2 million a year even after the AIF is eliminated, said airport general manager Parm Sidhu.

“We run an airport that basically empowers the business community,” he said. “The more money they make, the more we grow.”

Abbotsford uses its airport as an economic enabler and reduced its AIF from $10 to $5 in 2015, said Sidhu. The fee was eliminated completely on international flights about a year ago, and on June 1 it will be eliminated on domestic flights as well.

“It’s really about their success is our success,” said Sidhu, referring to the airport’s business partners. “Our brand is built through their successes.”

The airport’s $2 million annual surplus is expected to come from other existing revenue sources like landing fees, land rent, concession fees and paid parking.

All of those add up to $6 million-plus, said Sidhu. The airport has annual operating costs of less than $4 million.

“The fee is not required at this point,” said Sidhu. “So in 10 years that’s something we may have to introduce, but we may have a significant increase in passenger volume between now and then because our cost structure is so favourable.”

Abbotsford saw more than 530,000 passengers last year–a record high–and is on pace to be above 600,000 this year, said Sidhu. Those flights come from national partners like WestJet, NewLeaf and Air Canada Rouge.

WestJet recently launched a new non-stop route from Abbotsford to Winnipeg, Man., and increased the frequency of flights from Abbotsford to Edmonton, Alta., from 13 to 20 flights per week.

“There’s many reasons why we choose to add more service, add new routes,” said Stewart. “We watch where traffic goes, and so part of it is supply and demand. Part of it is the cost of service.

“Part of it is making sure that there is value for our shareholders, so that we know the service is going to be used. And we’ve seen the guests from the community of Abbotsford very eager to take advantage of WestJet service. That’s why we’ve grown together over the past 20 years.”

NewLeaf operates six times per week out of Abbotsford, flying to Edmonton, Winnipeg and Hamilton, Ont.

The company plans to offer 11 weekly arrivals and departures out of Abbotsford from June 5 to Sept. 10.

“When we began operating in July of last year, Abbotsford became, very quickly, a key airport for us,” said Rempel.

“And the amount of traffic–people traffic–that we’ve generated in and out of that airport has been significant ever since that first flight took off from that airport.

“So it’s certainly made it more attractive–the elimination of those fees.”

Air Canada Rouge operates one daily, seasonal flight to Toronto out of Abbotsford. The company declined to comment on the airport’s decision to eliminate its AIF.

While not all airports can afford to eliminate their AIFs, there is hope this is a trend that will spread across the country.

“We do see the Abbotsford International Airport as a leader when it comes to keeping their operating costs low and their fees low,” said Stewart.

“And it’s something that we hope that other airports will follow.”