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The Greater Toronto Airports Authority (GTAA), which operates Toronto Pearson Airport, announced changes to its aeronautical rates on Sept. 30, which will mainly affect business and general aviation aircraft under 19,000 kilograms (41,890 pounds). The new rates will take effect on Jan. 1, 2021.
The GTAA said its revenues have decreased “significantly” since the COVID-19 pandemic caused a downturn in air travel, “compromising aeronautical and commercial revenues,” and its airport improvement fee (AIF). The GTAA has already reduced its workforce by 27 per cent, but stated that the increase to aeronautical rates and the AIF will allow it to “continue delivering on passenger requirements for a healthy airport environment, and to support continued strong financial liquidity.”
Anthony Norejko, president of the Canadian Business Aviation Association (CBAA), said fee increases from the GTAA, as well as from other Canadian airports and Nav Canada are ultimately a result of “the government’s failure to address the aviation industry as a whole.
“I think the missing element for the government is that, if we talk about funding to the industry, it needs to be recognized that it’s about scheduled and non-scheduled commercial operators, airports, and ANSPs [air navigation service providers] that are impacted,” he continued. “And it’s going to be a very tough road to come out of.”
In a press release issued on Sept. 30, the GTAA said aeronautical rates for commercial aviation will increase by 3 per cent; the AIF for departing passengers will increase by $5 to $30; the AIF for connecting passengers will increase by $2 to $6; and lastly, aeronautical rates for all business and general aviation aircraft 19,000 kg or less will increase to $575 per arrival movement.
The latter rate change will greatly affect light jet operators, who will face a 92 per cent increase in fees in the new year. Norejko said the concern is that there’s an “uneven distribution of the fee increase. If you’re over 19,000 kg, the rate goes up three per cent. . . . There’s still a sizable component of our membership that operates into and out of Pearson that are under 19,000 kg, that are facing a 92 per cent increase in fees.”
The CBAA’s members have unanimously voiced that they are against the 92 per cent fee increase — especially those operators who are trying to fly frequently into and out of Pearson. “That’s a material impact,” said Norejko.
The GTAA noted that aeronautical rates and the AIF have not increased at Pearson in over a decade — thanks to the thriving air travel industry pre-COVID.
Since the pandemic hit, and airlines drastically cut their schedules, there has been an opportunity for sustainable business aviation growth, Norejko said.
“There’s all of a sudden now an opportunity for business aviation and non-scheduled charter operators to fill some of that gap. But it’s an uneven recovery in that our longer-range operators are still kind of slowed down. But our smaller style — let’s call it North American style — operators, they’re on the path to recovery.”
However, the fee increases implemented by the GTAA could reduce general and business aviation activity at Toronto Pearson. Another concern is that this will create a domino effect with other airports across Canada.
“The GTAA is the biggest one to tip,” explained Norejko. “And it’s going to be very easy for other airports to sort of follow in the model and maybe even borrow from the script — like hey, we haven’t raised our rates in 13 years, either. Why don’t we do the same? But these increasing costs will finally reach a limit and a financial stress on the companies that are remaining flying.”
Norejko said there are still a few questions for the GTAA that remain unresolved, such as if the fee increase is permanent or temporary, and if there’s a willingness to consider a payback schedule over the next five years.
Mississauga, Ont.-based charter service provider, Chartright, is also seeking answers to a few unresolved questions about the GTAA’s rate changes. The company is “concerned” by the fee increase, “both with the chilling impact it will have on revenue operations, and also the message the GTAA seems to be sending to the general aviation community,” the company said in a statement to Skies.
“Is this a tactical increase that intends to raise a marginal amount of revenue, or is this a strategic change designed to disenfranchise Toronto’s private jet operators? Knowing the answer to this would allow operators to better plan for the future.”
Chartright experienced a virtual shut-down in operations in early April, but then saw a gradual increase in demand through the end of August, which plateaued in September. The company said charter activity has been occupying a larger proportion of flights than the historical norm.
Roughly 50 per cent of Chartright’s fleet is under 19,000 kg, meaning those aircraft will be subject to the 92 per cent increase in aeronautical rates in the coming months.