WestJet’s Frozen-themed Boeing 737-800 seen parked beside a Bombardier Dash 8 Q400 at Vancouver International Airport. The federal government is considering selling off Canada’s major airports. (NICHOLAS PESCOD/NEWS BULLETIN)

Selling off airports would be short-sighted

Increased competition needed, not a change in airport ownership

It’s been a pretty solid year for Vancouver International Airport.

Passenger numbers are up and new airlines are flying in and out at its terminals and it was just named Best Airport in North America by Skytrax World Airport Awards for the eighth year in row. That’s a big deal considering the awards are based on responses from 13 million passengers from 550 airports worldwide.

Despite this success, Vancouver International Airport and every other major airport in this country could be sold off to private investors.

Since 1994, most airports in Canada, including the Nanaimo Airport, are operated by non-profit, non-share corporations or authorities. Those authorities, such as the Vancouver Airport Authority, have leased the airport land from the federal government over a 60-year period.

But over the last year or so, the Trudeau government has toyed with the idea of eliminating the non-profit model and selling off Canada’s major airports in an effort to raise billions of dollars. A CBC report last month revealed that the government secretly hired PricewaterhouseCoopers to examine various options for raising billions of dollars from the major airports. One of those options includes the creation of for-profit corporations that would purchase the airport lands and operate the airports.

Indeed, the feds could make billions by selling off such vital assets. A recent report from C.D. Howe Institute suggests that the federal government could make between $6 and $42 billion by selling off Canada’s eight largest airports. It suggests that the transaction could make Canadian travellers, airlines, taxpayers, investors, and the federal government financially better off and that privatization would reduce the cost of air travel for travellers.

Australia, which privatized its airports in the 1990s, is often cited as an example of how privatization has worked to some degree. The Howe Institute report points out that Canadian airports have far less non-aeronautical revenues – that’s stuff like retail and food sales – per passenger than Australian airports.

It’s worth mentioning that the Australian Competition and Consumer Commission released a report earlier this year stating that airlines and passengers have paid $1.6 billion more than necessary for airport access in Australia over the last decade. So much for cost savings.

What the C.D. Howe Institute doesn’t mention is that aviation regulation in Australia is different than it is here in Canada. The Australian government allows foreign carriers to operate on major routes. For example: United Arab Emirates-based Emirates is allowed to sell tickets for flights between Melbourne and Auckland, New Zealand, despite it being an airline from neither of those two countries. While this is allowed in Canada, it is rare. You won’t see Emirates flying a New York-Vancouver route anytime soon.

Canada’s airport ownership model isn’t broken. Is there room for improvement? Absolutely. Some have raised concerns about governance of these non-profit authorities and their lack of accountability. But selling off Canadian airports for a quick dollar is incredibly short-sighted and won’t benefit the consumer in the long run. What will benefit consumers is more airlines competing for Canadian passengers.

But that makes sense, not the billions of dollars that the feds are looking for.

nicholas.pescod@nanaimobulletin.com

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