Welcome!

News Feed Item

Canadian airfare prices are competitive, excessive taxes and surcharges are the main issue

MONTREAL, March 27, 2014 /CNW Telbec/ - With 75 per cent of Canada's population living only 90 minutes from the U.S. border, many Canadian airports are competing for passengers with their northern American counterparts. This geographic proximity has made prices one of the biggest competitive advantages of airports in their quest to attract more passengers. According to a Viewpoint on Canada's High Airfares and Passenger Leakage published today by the Montreal Economic Institute, taxes and surcharges are to blame for the cost difference between Canada and the U.S.

The MEI illustrates this phenomenon by comparing two typical flights for a passenger leaving from Montreal with one leaving from just across the border. When breaking down the prices of flights from Montreal to Fort Lauderdale or New York City and their equivalents from nearby U.S. airports, it's impressive to observe that Canadian base fares are actually lower or of equal value, even if Montreal is farther away from both destinations. In opposition, Canadian taxes and fees are more than twice as high as U.S. taxes and fees for equivalent flights from Plattsburgh and Burlington. These additional charges account for roughly a quarter of the Canadian airfares.

"On the same day, a passenger flying from Montreal to Fort Lauderdale will pay 36% more than if he had left from Plattsburgh. Similarly, the flight to New York City is 10% more expensive from Montreal than from Burlington," says Michel Kelly-Gagnon, President and CEO of the MEI and author of the study.

Estimates show that Canada's airline industry is losing approximately five million travellers annually who choose to cross the border into the United States to begin their journeys from an American airport largely due to the high prices of airline tickets at their local Canadian airport. The trend is more present than ever and is costing Canada nearly 9,000 jobs and $2.4 billion a year in economic output.

Many studies have demonstrated that the higher costs in Canada's aviation supply chain are mainly the result of government policies, through the form of taxes, fees and other charges. Eliminating airport Improvement fees is one of the changes that should be made to help reduce passenger leakage. "An alternative solution could be to eliminate airport rent to increase passenger traffic. Even if such a measure would deprive Ottawa of the $280 million it collects each year from rents, this would be mitigated by an extra $50 million in revenue from increased passenger traffic. To recover these losses in revenue and much more, the federal government could sell airports off to private investors," concludes Michel Kelly-Gagnon.

The Viewpoint titled "Canada's High Airfares and Passenger Leakage" is written by Michel Kelly-Gagnon, President and CEO of the Montreal Economic Institute. This publication is available on our website.

* * *

The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

SOURCE Montreal Economic Institute

Image with caption: "Airline ticket price differences between Montreal-Trudeau Airport and its regional American competitors for two typical North American destinations (CNW Group/Montreal Economic Institute)". Image available at: http://photos.newswire.ca/images/download/20140327_C7340_PHOTO_EN_38387.jpg

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In addition to all the benefits, IoT is also bringing new kind of customer experience challenges - cars that unlock themselves, thermostats turning houses into saunas and baby video monitors broadcasting over the internet. This list can only increase because while IoT services should be intuitive and simple to use, the delivery ecosystem is a myriad of potential problems as IoT explodes complexity. So finding a performance issue is like finding the proverbial needle in the haystack.
"We host and fully manage cloud data services, whether we store, the data, move the data, or run analytics on the data," stated Kamal Shannak, Senior Development Manager, Cloud Data Services, IBM, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to imp...
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
With over 720 million Internet users and 40–50% CAGR, the Chinese Cloud Computing market has been booming. When talking about cloud computing, what are the Chinese users of cloud thinking about? What is the most powerful force that can push them to make the buying decision? How to tap into them? In his session at 18th Cloud Expo, Yu Hao, CEO and co-founder of SpeedyCloud, answered these questions and discussed the results of SpeedyCloud’s survey.
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
"This week we're really focusing on scalability, asset preservation and how do you back up to the cloud and in the cloud with object storage, which is really a new way of attacking dealing with your file, your blocked data, where you put it and how you access it," stated Jeff Greenwald, Senior Director of Market Development at HGST, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develo...
“We're a global managed hosting provider. Our core customer set is a U.S.-based customer that is looking to go global,” explained Adam Rogers, Managing Director at ANEXIA, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Basho Technologies has announced the latest release of Basho Riak TS, version 1.3. Riak TS is an enterprise-grade NoSQL database optimized for Internet of Things (IoT). The open source version enables developers to download the software for free and use it in production as well as make contributions to the code and develop applications around Riak TS. Enhancements to Riak TS make it quick, easy and cost-effective to spin up an instance to test new ideas and build IoT applications. In addition to...
Predictive analytics tools monitor, report, and troubleshoot in order to make proactive decisions about the health, performance, and utilization of storage. Most enterprises combine cloud and on-premise storage, resulting in blended environments of physical, virtual, cloud, and other platforms, which justifies more sophisticated storage analytics. In his session at 18th Cloud Expo, Peter McCallum, Vice President of Datacenter Solutions at FalconStor, discussed using predictive analytics to mon...
IoT is rapidly changing the way enterprises are using data to improve business decision-making. In order to derive business value, organizations must unlock insights from the data gathered and then act on these. In their session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, and Peter Shashkin, Head of Development Department at EastBanc Technologies, discussed how one organization leveraged IoT, cloud technology and data analysis to improve customer experiences and effi...