Canada’s landing fees are higher than the likes of Dubai and Paris. Canada’s airport fees are some of the highest in the world.
In fact, in 2015, the World Economic Forum ranked the country 130th out of 138 countries in terms of travel and tourism competitiveness. Thankfully that overall ranking has improved greatly in recent years, although the country’s landing fees remain high.
Canadian airports
Before we look at the reason for the high landing fees at Canadian airports, let’s 1st look at the costs themselves.
Here are some of our findings:
Montreal’s Pierre Elliot Trudeau Airport (YUL)
- The landing charge is C$11.08 ($8.35) per 1,000kg, based on MTOW. (A 777-300 would be around C$3,325 ($2,505))
Toronto’s Pearson Airport (YYZ)
- The landing charge is C$18.24 ($13.75) per 1,000kg, based on MTOW. (A 777-300 would be C$5,475/$4,126)
- Almost the world, these are fairly high when compared to some other world-class cities:
Paris Charles de Gaulle (CDG)
- The formula is €304.38 + €4.251 x MTOW in metric tons. (A 777-300 would be €1,575/$1,632))
Dubai International Airport (DXB)
- The airport charges AED 18.03 per metric tonne (1,000kg). (A 777-300 would cost AED 5,409/$1,472)
New York’s JFK
- The takeoff charge is $12.95 per thousand pounds of maximum gross weight (For a 777-300, that’s nearly $7,900)
As you can see, operating our hypothetical Boeing 777-300, which has an MTOW of just over 299,000 kg, will be most costly at New York JFK but is followed closely by Toronto and Montreal.
Of course, we should note that it’s not just ‘landing fees that are imposed on airlines and their jets. Parking charges, airport improvement fees, noise fees, and more are tacked onto the bill. This will vary wildly between jurisdictions, making the comparison a little more challenging.
So why do Canada’s airports cost the same as some of the largest and busiest hubs around the world?
Why are landing fees so high?
Many airports around the world are at least partially privatized. For Canadian airports, however, the Government of Canada set up not-for-profit corporations to “manage, operate and develop designated infrastructures under long-term leases.” This is something unique to Canada:
“This model, in which the government of Canada retains ownership, is unique in the world. The model currently dominant globally is full or partial privatization, either via an outright sale or via corporatization followed by the sale of the share capital immediately or in phases.” – Aeroports de Montreal
This system sees airport operators as ‘tenants’ paying rent to the government. The rents are substantial and can represent up to 12% of airport revenues, according to The Financial Post. However, the non-profit model has one major drawback: it limits the sources of funding from which airports can receive.
While most international airports are now privatized and able to increase money from the markets, Canada’s airports are operated on lease from the government and must be returned after a 60 or 80-year period with no debts.
This lack of debt has meant airports have struggled to secure funding from major financial institutions, turning to increase fees, such as the landing charges, to pay for multi-billion dollar infrastructural upgrades. Moreover, as the leases arrive at a close, airports have warned that they will struggle to secure longer-term funding, potentially leading to infrastructural decay over the last few decades, as Montreal Airport nearly found out before its 20-year lease extension in 2016.
So, are passengers benefiting from these sky-high fees?
According to the World Economic Forum’s (WEF) 2019 Travel And Tourism Competitiveness Report, the answer is yes. While the 2015 report may have placed Canada in 130th place, the country’s rankings have been on the rise. It moved up to 68th in 2017 and then up to 9th in 2019.
Of course, this index measures a vast number of metrics, including natural resources, health and hygiene, international openness, and much more. But in the category of Air Transport Infrastructure, Canada ranked first as recently as 2 years ago. In the report, the WEF states:
Based on the report’s findings, it seems like Canada’s airports are re-investing those high landing fees back into airport infrastructure.
In fact, Skytrax’s 2020 list of best airports has all 3 of Canada’s biggest airports (YVR, YUL, and YYZ) in its Top ten list for North America, with Vancouver International Airport ranking 1st in the region.
This is a positive sign for the aviation industry in general, which has been attacked for its high ticket costs. However, trouble still looms with the non-profit model, and in the long term, expensive fees only make airports less competitive. But for now, the passengers flying don’t seem to be complaining too much.
Thank you
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