Quote:
Originally Posted by whatnext
Pretty scathing review of Canada's airport authorities in the Financial Post:
Peter Shawn Taylor: Why airport bankruptcies could be a good thing
Looming financial catastrophe could be the impetus necessary to force Canada’s airports into the 21st century
Author of the article:Special to Financial Post & Peter Shawn Taylor
Publishing date:Aug 06, 2020
....To shield Canadians from the horror of airports run by the private sector, which are in fact common in Britain, Australia and Europe, Ottawa instead handed them over to local, non-profit, non-share-capital airport authorities under 60-year leases. Canada is the only country to run its airports this way. There are good reasons why no one has ever copied us.
These leases require airport authorities to make hefty annual payments to Ottawa; since 1992 the federal government has reaped a cumulative $6.5 billion this way. But since it is still the ultimate owner of the land and buildings, Ottawa is essentially paying these fees to itself. And in a way that makes Canadian airports less competitive. To cover their costs, airport authorities were given virtually unlimited powers to levy fees on airport users. This explains why Canadian travellers often drive to the U.S. for cheap international flights.
Canadian airports also have an expensive tendency to “gold-plate,” or over-build, capital projects. Lacking a profit incentive, and with air travellers and airlines footing all the bills, airport authorities are notorious for constructing ever-grander manifestations of their own glory. In 2005, Giovanni Bisignani, then-CEO of the International Air Transport Association, famously decried the extravagant $4.4 billion Terminal 1 at Toronto’s Pearson International Airport as a “Versailles with boarding bridges.” More recent expansions in Ottawa, Winnipeg and Calgary — all financed with debt, of course — have drawn similar complaints.
All that debt is responsible for the sector’s current mayday moment. Canada’s airports owe a collective $15.2 billion, more than the combined provincial debts of Saskatchewan, New Brunswick, Prince Edward Island and Newfoundland and Labrador....
https://financialpost.com/opinion/peter-...cm/65ab6e1f-e94c-47af-a16d-9ebbeb9faba1/
|
So, we have a model that returns profit for the government. I'd rather have somebody flying subsidizing government as opposed to government subsidizing flying unless it's up to somewhere that needs an air connection. That $6.5 billion would have come out of somebody's pocket somehow to fund government otherwise.
I fail to see a downside here. Flyers pay for airport improvements directly, instead of it being weaseled out of government coffers. Government retains ownership of a valuable strategic asset that pays dividends (glares at Highway 407).
The only downside I see is that flying costs somewhat more. Who better to pay for aviation than the people who can afford to fly? I say this as someone who flies occasionally for leisure. Why should someone who never flies subsidize me?
Unless, of course, all one wants is cheap flying at someone else's expense. If $50 of airport improvement fees is stopping one from flying, um, perhaps flying isn't for them.
The private sector's all about airports because they know a cash cow when they see one. Especially one that doesn't have competition, like many airports in Canada. So, that $6.5 billion ends up in private hands. Just like the 407.