Quote:
Originally Posted by PPAR
Thanks- you have convinced me to avoid the ULCC. But Iberia and BA is still only $89 on these routes. While by no means an expert, I have a suspicion that AIF, Nav Can fees etc are the responsible elements for much of the high cost of air travel here.
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AIF partly to blame, NavCan, no.
NavCan revenues per IFR flight hour is among the lowest in the developed world, and lower than almost all the European nations. They recently lowered (yet again) their fees.
Productivity of Canadian controllers is the highest in the world (IFR hour per controller), even higher than the FAA.
(Source: CANSO)
AIF alone isn't the main reason why cheap fares don't exist in Canada. Lack of competition is the main reason. Vast country and small/fragmented population is another. Europe doesn't have those challenges. Over there, airlines are a plenty, and they can serve 740 million people !
We can't be comparing our airline market to that of Europe.
It also doesn't help that we have an airport like Pearson, which is the most expensive airport to land in the world. I'm sure YVR and YUL aren't cheap either. I don't blame the airport authorities. The amount of money they pay the government in rent every year is ridiculous. It's only normal that they forward that cost to the airlines, which in turn forwards it to the passenger.
You can't really blame anyone, for the reasons mentioned above, but if you had to, blame the government; not the airports, airlines or NavCan.
Margins in this business are extremely thin. Look at AC, Q1 2017 passenger revenues in excess of $3 billion, and yet earnings before interest and taxes were only $342 million. Add all the minuses, and they had a net loss of $37 million.
$3 billion, and they didn't make a cent in Q1 this year.......