The advantages that Canada does have "cannot compensate for government policies that treat aviation like a cash cow, instead of a powerful draught horse," Tony Tyler, CEO of the International Air Transport Association, said Tuesday.
Tyler used a speech to an international-relations group to call on policy-makers to improve the competitiveness of the aviation sector — including reducing the heavy tax burden.
Aside from Crown rents, airports also pay hundreds of millions in what he said are tantamount to ''municipal taxes." Tyler said that, for an airport like Toronto's Pearson International, that's $25 million a year in such taxes.
He added that Canada also has some of the highest security fees in the world — "roughly three to 10 times the fees charged passengers in the U.S., depending on the destination."
When asked to comment, Transport Canada defended itself. It zeroed in specifically on the issue of airport rent.
Spokesman Patrick Charette said such rent, "represents a fair return to taxpayers for the economic opportunity provided to airport authorities to manage airport operations." He added that airport rent represents less than one per cent of the cost of a ticket and is not likely to be a key factor in a traveller's decision to choose a U.S. airport over a Canadian one.
But Tyler wasn't entirely negative about Canada, saying it is well positioned to use aviation as a catalyst for growth.
He pointed to a report from the World Economic Forum which ranked Canada first in the world for the quality of its air-transport infrastructure.
Tyler also mentioned that the aviation sector is a major contributor to the country's economy. An IATA-commissioned study said aviation generates $33.3 billion — or just over two per cent — of Canada's GDP and supports 401,000 jobs.
"That's impressive, but aviation could contribute more if the government took a more strategic approach," Tyler said.
Tyler, who spent many years in Asia, said that with a population of just seven million, Hong Kong supports 250,000 aviation-related jobs.
"That's more than half those in Canada, although Canada's population is five times as large as Hong Kong's," he said.
But Tyler said he's optimistic about the future because there are signs policy-makers may be reassessing aviation's role.
"The announcement by the government of British Columbia that it is proposing to do away with the provincial tax on international jet fuel from next month is excellent news," he said.
Tyler also pointed to a federal strategy aimed at restoring the country's tourism sector.
"Now is the time for Transport Canada to undertake a similar review of aviation taxation and access issues," he added.
Tyler later told reporters that IATA was taking part in the aerospace and space review announced recently by Industry Minister Christian Paradis.
"We hope something good will come out of it; we're an optimist by nature," he added.
The IATA executive was also critical of the European Union for including aviation in its emissions-trading scheme, saying that move has serious implications.
As of January, the European Union is requiring all air transporters who offer flights to Europe to buy "certificates" to cover part of their greenhouse gas emissions.
"Some airlines are already either implementing fare increases or putting on a surcharge to cover the cost," Tyler told reporters. "Overall for the industry, we estimate US$1.3 billion for the first year as a total cost."
Tyler also discussed IATA's analysis of the airline industry's 2011 safety performance, which he described as "a stellar year for safety."
There were only 11 hull-loss accidents involving western-built jet aircraft, compared to 17 in 2010. He said 2.8 billion people flew safely on 38 million flights last year. He said someone could take a flight every day and, according to the 2011 industry rate, could expect to go more than 7,000 years without an accident.
IATA measures its accident rate in hull losses, which is an accident in which an aircraft is destroyed or substantially damaged and not repaired.
"It was the best year that we've had in terms of safety for airlines around the world," Tyler said after a speech to the Montreal Council on Foreign Relations. "North American airlines achieved three times the global average in terms of safety."
IATA said in a news release that the fatality rate dropped to .07 per million passengers from .21 per million in 2010 based on western-built jet operations.
The association represents some 240 airlines which comprise 84 per cent of global air traffic.Suggest a correction