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News Release

Release #02.106
December 6, 2002

OTTAWA---The union that represents more than 2,000 airline pilots in Canada is asking its members to convey to Ottawa their concerns over excessive government taxes and mandated costs that threaten to smother the nation’s already reeling airline system.

"I am calling on all of our members to write to their MP and to the ministers of transport and finance, expressing their grave concern over government policies that are squeezing the life out of this important sector of our economy," said Capt. Kent Hardisty, head of the Canada Board unit of the Air Line Pilots Association.

"In part, the doldrums of the North American aviation marketplace are the legacy of the September 11 attacks, questionable airline management practices, and the sagging economy. However, a great portion of the industry’s woes are being caused directly by the federal government, which has created a significant and negative impact upon the viability of Canadian airlines by its imposition of a myriad of taxes, charges and additional costs that eat away any potential profit," Hardisty said.

"These costs generally add 7% to 40% to ticket prices, and even more in some cases. For example, Moncton-Halifax on a super-low fare is $138.00. Add the NavCanada fee of $20.00, the Security Charge of $22.44, airport improvement fees at Moncton and Halifax of $20.00, and the Harmonized Sales Tax of $28.56, and you get a total tax burden of $91.00, a shocking 66% premium," Hardisty said.

"Higher ticket prices due in large part to these fees, taxes and charges, together with the ‘hassle factor’ perception of travelling by air, has resulted in significant reductions in passenger traffic. In particular, the Air Travellers Security Charge, in which passengers finance national security, is perverse and unfair. Clearly, the status quo is not sustainable within the airline industry itself, or in the many industries that support it," Hardisty said.

"The airline industry in Canada and the U.S. is in crisis. So far this year, our passenger traffic has declined 10.2% as compared to 9.9% in the U.S., even though Canada’s economy has been stronger. Air Canada lost close to $1.3B in 2001 but is not expected to make a profit in 2002. Air Canada Jazz recently announced a 30% decrease in traffic. Canada 3000, which was to be Air Canada’s principal competitor, declared bankruptcy last year. We cannot afford to treat air transport as a cash cow by milking passengers and airlines. It is a crucial segment of our economy, both in its own right and to the extent that other industries rely on it. The airlines employ tens of thousands of highly skilled workers who live in hundreds of communities across Canada paying taxes and spending their hard-earned income," Hardisty said.

"Our pilots realize that these policies are misplaced and unfair. In a letter being sent today to the ALPA airline pilots in Canada, I am asking them now to communicate with their ministers and MPs encouraging them to, first of all, kill the Security Tax and, secondly, re-think the policy of escalating charges that passengers and airlines are being required to shoulder," Hardisty said.

ALPA, the world’s oldest and largest airline pilot union, represents 66,000 pilots at 43 carriers in Canada and the U.S. Its Web site is at http://www.alpa.org.

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ALPA CONTACT: Art LaFlamme (613) 569-5668