Press Release No.:
23 October 2003
Montreal – The world's airlines escalated the urgent issue of rising charges at Toronto's Pearson airport, now one of the top ten most expensive in the world. "We cannot sit back and wait for better times. In the wake of three years of industry losses, we need better economic regulation to eliminate monopoly practices if we are to drive down crippling costs. The Greater Toronto Airports Authority (GTAA) needs a reality check," said Giovanni Bisignani International Air Transport Association (IATA) Director General and CEO.
IATA, representing 275 airlines, cited an unprecedented 300% rise in the cost of operating at the airport over the past seven years and blasted the privately-run GTAA for lack of good governance and accountability statements made at a briefing in Toronto on 21 October. "GTAA is building a Versailles and taxing its faithful subjects - the airlines - for it," said IATA spokesperson William Gaillard. "The only problem is that its subjects are rebelling in the face of a complete lack of a meaningful dialogue and consultation."
Both the Air Transport Association of Canada and the Association of Airline Representatives in Canada, representing the foreign carriers operating in the country participated in the briefing. The event was attended by carriers from Canada, the US, Europe, Asia and the Middle East.
Mr Gaillard warned that the negative impact of uncontrolled charging practices would force cost-conscious airlines to reduce services to overly expensive hubs. The overall knock-on effect means reduced options and higher costs for the end consumer, as well as a negative impact on jobs, tourism and the local economy.
"The management of GTAA has been completely oblivious to the plight of the Toronto community. Even at the time of the SARS epidemic, when 16 airports in SARS-affected cities reduced their fees to help the local economies, Pearson answered by increasing its fees by 29%." Gaillard added.
Gaillard's comments follow an October 16 letter from Bisignani to GTAA Director Lou Turpen stating that Turpen was "acting as a true monopolist, not subject to any effective countervailing economic regulation and not prepared to take into consideration the situation of his customers…who are no longer ready to pay for the GTAA inefficiencies."
GTAA is the latest airport organization to be targeted in a global campaign to improve airport cost efficiency. The IATA-led campaign was launched at the IATA World Air Transport Summit in Washington D.C in June 2003. User charges for airport and air traffic services represent 10% of international operating costs. Cost reduction is a top priority for all carriers worldwide.
Since February, Bisignani has been raising this issue with the government as well as the airport. Last week, Bisignani wrote again to Canadian Transportation Minister David Collenette pinpointing that "it does not appear that maintaining the viability of the airline industry is a priority" and called for a "dramatic re-think" of the Canadian air policy agenda.
Until now the only reaction from GTAA has been to ban IATA from its premises and to issue a written warning to airlines against attending the 21 October press conference. Both measures are unprecedented in the 58-year history of the world airline body.