Canadian airports lose 5 million passengers annually to US border competitors

ACCORDING to a report by the Conference Board of Canada, a not-for-profit research organization, as many as five million Canadians go south of the border by land every year to take advantage of cheaper airfares in the United States, especially when flying within the U.S. The study made specific references to the near-border cities of Vancouver (Vancouver International Airport), Toronto (Pearson International Airport) and Montreal (Montreal-Trudeau International Airport), losing passengers who stand to save some 30 per cent in fares. The pull is even stronger with the Canadian dollar strengthening against its US counterpart.

This is not a new issue for the Canadian government, with federal Finance Minister Jim Flaherty expressing the concern of Ottawa and making it known that Transport Minister Denis Lebell “has been working on a constitutional project with the airlines, with the airport authorities in Canada to try to see what we can accomplish.”

Are American airlines more efficient and customer-service orientated than Canadian airlines? Perhaps if you are flying within the US, you have the advantage of frequencies and better connections. Do not forget that Air Canada has been consistently voted the best airline in North America. It is really all a matter of cost. The Conference Board says fees and taxes constitute about 40 per cent of the cost of an airline ticket in Canada.

So, is the Canadian government prepared to collect less in revenue and implement a cutback in surcharges? Short-term pain, but long-term gain, opined the Conference Board. How can it ensure that the resulting benefits are passed down to the passengers? Are airlines and airports themselves committed to keeping the costs competitive for air travellers? Five million may be a comparatively small figure for now, considering that the combined throughput of Canada’s busiest three airports is more than 64 million in 2011 (Toronto 33.4 million, Vancouver 17.0 million, and Montreal 13.7 million). The risk is how an unchecked exodus can hamper the growth of these hub airports.