Your Airfares May Get Cheaper This Year

Photo courtesy of Air Canada

Nav Canada, the nation’s civil air navigation service provider, has announced that it is lowering service charges on all air navigation services, effective Sept. 1, 2016.

This should come as welcome news to Canadian airlines and airline passengers, who pay a heavy price for air travel. In 2015, Canada ranked 130th on a list of 138 countries in terms of ticket taxes and service charges at its airports, according to a report by the Montreal Economic Institute (MEI). Only airports in Ghana, Mali, Guinea, Peru, Dominican Republic, Senegal, United Kingdom and Chad charged higher airport fees last year.

With the rate revisions, customer service charges will be lowered by an average of 7.6 per cent, reflecting a total customer savings of approximately $100 million during fiscal year 2017 (Sept. 1, 2016 - Aug. 31, 2017.)

"These changes enable us to meet our cost recovery mandate by aligning our revenues with our costs going forward," said Neil Wilson, President & CEO. "Strong traffic growth, coupled with cost controls and targeted strategic investments in the air navigation system, have put us in a position to deliver savings to customers while increasing our planned investments in people, technology and facilities."

Another $50 million in savings are expected to occur during fiscal year 2018.

The fee charges come just months after a lengthy review of Canada’s air transport system, completed by a federal committee late last year, recommended sweeping changes to the system including cuts to airport service charges.

It is worth noting that a 2012 report by the Conference Board of Canada estimates that some five million Canadians cross into the United States in order to save money by flying from U.S. airports. This year, however, with the weakened loonie, Canadians have had less ability to realize significant savings by flying from American airports. Slowly travellers are returning to Canadian airports, which are seeing  record breaking passenger levels this year.

According to Nav Canada’s third quarter report, passenger traffic across Canada increased by 3 per cent during the third quarter of fiscal year 2016 as compared to the same period last year. Accordingly, Nav Canada’s revenue for the same period was $337 million, compared to $329 million over last year, a number that is largely being attributed to the growth in air traffic volumes.

Nav Canada provides air traffic control, flight information, weather briefings, aeronautical information services, airport advisory services and electronic aids to navigation. The company levies fees on airlines and other owners and operators of aircraft in order to defray the costs of providing air navigation services.

This is Nav Canada's third reduction in fees since 2006.

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