New group goes to bat for Canada's major airlines

[Bulldog]

By Gina Teel, Calgary HeraldJanuary 21, 2009 9:01 PM
 
CALGARY - Nine months after breaking away from a long-standing airline industry organization, Canada’s largest commercial carriers have announced an association of their own.

The National Airlines Council of Canada, a joint creation of Air Canada, Air Transat, Jazz Air LP and WestJet Airlines Ltd., will focus on promoting public policy and legislation relevant to the success of the nation’s commercial airlines industry.

Sean Durfy, president of Calgary-based WestJet, is the new trade association’s first chairman of the board of directors, and will serve a one-year term.

Airlines analyst Rick Erickson said the new association is “a good thing” for Canada’s four large carriers, in terms of pressing their positions on vital issues like airport rents, aviation fuel taxes and high security costs.

“I think the federal government can fully expect a lot more interest and a greater united voice coming from Canada’s air carriers,” he said.

Erickson added the reason for the airlines going this route is to lower their costs, and so the effort could eventually benefit consumers.

Stephan Poirier, vice-president and chief commercial officer of YYC, Calgary’s airport, said rent is a big issue for the Calgary Airport Authority, so he’s pleased the airlines are joining the fight through the new association.

As a not-for-profit, airport rent is built into the authority’s cost structure, so the cost is passed onto airlines and passengers, he said.

In 2008, YYC paid more than $20 million in federal rent. Since July 1992 the authority has paid close to $300 million for an asset that had a book value of $180 million at the time, Poirier said.

Collectively Canadian airports pay approximately

$300 million in federal rent per year.

“If we did not have to pay that, then we could obviously have that reflected in our cost structure, which everyone would be very happy about, so the airlines are quite keen to join us in fighting this,” Poirier said.

The launch of the new association comes after Canada’s largest commercial carriers last April withdrew their respective memberships from the Air Transport Association of Canada.

The 75-year-old association represents the full spectrum in the aviation sector and tackles issues that affect its members, and represents their views on regulatory and legislative matters in Ottawa.

Erickson said the air transport association simply didn’t have enough resources to cover the key issues critical to the four big national carriers, which represented the majority of the association’s funding.

Richard Bartrem, WestJet’s vice-president of culture and communications, said the new association suits the carrier’s needs as a large commercial airline.

“We were looking for a cost-effective solution to a more narrow focus on our needs, and the launch of the NACC achieved that for us,” he said.

Air Canada spokeswoman Angela Mah echoed these sentiments, saying the airline looks forward to working with a small, cost-effective association that is more directly focused on issues affecting passenger carriers.

“Issues concerning things such as government regulations and policies, and, for example, airport rents and security fees,” she said.

Brigitte Hebert, director of the National Airlines Council of Canada, said the organization, incorporated in September, has been hard at work, having recently presented a pre-budget submission for the 2009 federal budget.

Included is a request to redirect airport rents into an aviation infrastructure fund. Another budget request is to maintain the Canadian Air Transport Security Authority operating budgets at current levels without increasing current air traveller security charges.

Air transport association president John McKenna said he has met with the new association and identified common issues they will work on together.

“As long as it caters to our members and it’s for the good of our members, we will work with them,” he said.


gteel@theherald.canwest.com

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