Pearson airport hikes user fees to new high after summer of chaos
It is, in the notorious words of at least one frustrated celebrity traveller, the worst airport on Earth. Now, Pearson International is raising its prices.
After a summer filled with headlines about long lineups, cancelled flights and lost baggage, the Greater Toronto Airports Authority announced recently that it would be raising the airport improvement fee" (AIF) it charges passengers and aeronautic rates" it charges airlines, starting in January, to help pay for increased staffing and renovations.
The increase in rates at Pearson was criticized by airlines and passenger advocates.
We are disappointed that the GTAA has announced further rate increases despite achieving profitability in the last quarter," said WestJet spokesperson Madison Kruger in an email. Canada was already one of the highest aviation cost jurisdictions prior to the pandemic and during the pandemic Canadian consumers faced double digit cost increases as airports across the country increased their Airport Improvement Fees by as much as 52 per cent, with deteriorating service levels."
Air Canada spokesperson Peter Fitzpatrick said the increases might be justified financially, but will make flying more expensive. He also argued the increases show the shortcomings of the Canadian airport-funding model.
This decision will impact the cost of travel. Fee increases such as these resulting from the pandemic demonstrate the importance of reviewing the user-pay model applicable almost uniquely to air travel in Canada," said Fitzpatrick.
Gabor Lukacs, president and founder of Air Passenger Rights, a passenger advocacy organization, said the AIF increase is a symptom of a broader, underlying problem - Canadian airports don't seem to be answerable to anyone.
There isn't any meaningful accountability or oversight," said Lukacs, who questioned whether airport improvement fees, or AIFs, are justifiable in any circumstance. The question is not whether AIFs should be raised but whether AIFs should be charged at all."
Effective Jan. 1, planes landing at Pearson will see aeronautic rates" increase four per cent, while the AIF will rise to $35 one way for departing passengers and $7 for connecting passengers. The AIF is currently $30 for departing passengers and $6 for connecting passengers. In 2019, before a series of increases during the pandemic, the AIF was $25 for departing passengers and $4 for connecting passengers.
Aeronautic rates vary by a plane's weight, but for a typical domestic flight landing at Pearson with a plane such as a Boeing Max 737, they're about $4,877 now but will go up to $5,072 in January, according to the GTAA.
At U.S. airports, the comparable fee is called the Passenger Facility Charge, and is capped at $18 (U.S.) per round trip by the Federal Aviation Administration. Airlines typically pass these fees on to passengers, on top of their actual ticket price.
Before the AIF and aeronautic rates started moving up in 2020, Pearson's fees hadn't increased in over a decade, noted GTAA spokesperson Ryan White.
White defended the increased fees, saying they'll help pay for much-needed renovations and higher airport staffing, as well as a new robotic baggage-handling system in Terminal 3.
Given the well-publicized challenges across the globe relating to aviation's restart over the summer, ensuring a smooth passenger experience at Toronto Pearson, the country's largest airport and a major driver of regional and national economies, is absolutely essential to signalling to the world that Canada is open for business and tourism," said White. These changes ... will help ensure the necessary investments to enhance the passenger experience."
Pearson also increased its debt load by $800 million during 2020 and 2021 to help stay open during the leanest years of the pandemic, White said.
Ultimately, said longtime air industry analyst Fred Lazar, the GTAA had no choice when it came to raising rates.
Their revenues collapsed, but they couldn't do much on the cost side, so they've been bleeding money for the past two years. They really didn't have much of a choice. They had to keep making payments on their debt," said Lazar, a professor at York University's Schulich School of Business.
As a non-profit organization, the GTAA can't issue equity stakes to raise money, Lazar pointed out, adding that the fact that it's not directly operated by any level of government causes other problems.
If they were private, they could issue equity. If they were directly government owned, they'd have more stable funding. With this non-profit model, they've been given what's basically taxing power, so that's what they have to use," said Lazar, who nonetheless isn't thrilled with the fee increase.
There really isn't any effective oversight. The board just rubber-stamps what senior executives ask for," Lazar said.
Former NHL star Ryan Whitney referred to Pearson as the worst airport on the planet in a video that went viral after he posted it on Twitter this summer.
This is the worst airport on Earth. I'm telling you, there's no other airport like this," said an exasperated Whitney in a clip detailing his derailed journey from Edmonton to Boston via Toronto.
Whitney's June tweet came at the peak of the Pearson chaos, when passengers complained of everything from lengthy customs queues to long waits on the runways and lost baggage.