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Canadian Air Traffic: A Sad Marketplace  
User currently offlineFLYYUL From Italy, joined Jun 2000, 4980 posts, RR: 51
Posted (9 years 10 months 6 days 7 hours ago) and read 3673 times:

A simple law of economics has it that price affects demand, and supply affects demand as well. With high prices, and low supply, no wonder why people are not travelling to the USA from Canada...

Here is why....

Example no1. Montreal-Fort Lauderdale Air Canada

Departing airfare (Tango) Rules** 169.00
Returning airfare (Tango) Rules** 169.00
Airfare 338.00
Navcan and Surcharges 55.00
Canada Airport Improvement Fee 15.00
Taxes
Canada Goods and Services Tax (GST/HST #10009-2287) 29.20
U.S.A Transportation Tax 35.84
U.S Passenger Facility Charge 3.92
Canada Quebec Sales Tax (QST #1000-043-172) 1.20
Canada Security Charge 9.35
September 11 Security Fee 3.27
U.S.A Immigration User Fee 9.16
Number of Passengers 1
Total 499.94
Grand Total (Canadian Dollars) 499.94

So you the consumer are a 33% tax rate on an airplane ticket!!!!!!

Example no.2 AA JFK-MIA-JFK

Base Fare 187.90 USD
Taxes: 32.80 USD
Total: 220.70 USD

Your Total Price 220.70 USD

So the tax rate on this ticket is 14.8%... which is our Quebec/Ontario Sales TAX rate

Example no.3

Toronto-LaGuardia WestJet!

base Fare: $142
taxes: $149
After Tax: $291

Tax rate: 51.2% for a 250Nautical Mile flight?

Example no.4

Boston-LaGuardia

base fare $108
taxes $26
after tax $134

tax rate: 19.4%

Members of the board..

The Canadian govt is asleep at the wheel. Despite the fact that passenger traffic is soaring from 09/11 and the Iraq war depressions, taxation rates on commercial aviation are UNSUSTAINBLE.

Imagine if you are a business owner, and you had to tax people 50% on the product of which they consumed? How would the consumer react? He would go to the competition right?.... but what happens if there is no competition? Is it not fair to assume that the general industry would have a sudden decrease in total demand?

It truly amazes me just how incompetant politicians are when it comes to Air Travel.

Why isnt there a bigger outcry to this problem? Where are the Canadian voters in this matter? After all, are they not the people that are being ripped off?

If taxation on airplane ticket were to be sustainable, our airports would be even more vibrant than they are today. We have seen in the last 3-4 years an increase in RJ flying from the USA, draw your conclusions. From Toronto, USAirways has decreased mainline flying to pretty much all RJ. From Montreal, American Airlines has dropped many of its mainline ORD flights to AEagle. In Montreal, Continental has dropped off Montreal-Newark in favor of ExpressJet.

101 Economics says that unsustainable taxation will create a surplus of supply due to reduced demand. That surplus will adjust to the new demand after taxation.... and today we are seeing it first hand in Montreal, Toronto, Vancouver and Canada as a whole. Due to constrained demand, Canadian transborder traffic is becoming a literal transborder RJ heaven.... not because the market potential isnt there, because the people who govern the market really need to go back to school (or pay better attention, which ever is more necessary).

There was a day when Air Canada was expanding to all sorts of American destinations. There was a day when NW/AA and US were flying 757s to YYZ.. that day wasnt so long ago, and there is no reason why it couldnt come back.

This year, the Liberal government of Canada (a party that I support via my vote) will declare a large budgetary surplus. Meanwhile, many of Canada's airlines are hanging by a thread (Canjet/Air Canada/JetsGo etc) in the transborder markets.

Please free to reply.



46 replies: All unread, showing first 25:
 
User currently offlineSquigee From Canada, joined May 2001, 652 posts, RR: 4
Reply 1, posted (9 years 10 months 6 days 6 hours ago) and read 3603 times:

I think you are right on the money.

This is the exact reason why airlines like Westjet and Jetsgo have their '$1' fares: they want to illustrate to the flying public just how much money is going into taxes.

Personally, I think it's outrageous that along with these fees, airports force you to pay ~$10-$20 for airport fees, as well. It seems to me that since Canada is such a large and dispersed country, road and rail travel are not feasible alternatives to air travel. Thus, it is an essential service. Now, my question is, how long would a government last in office if they proposed a 50% tax on perscription medicines? Or such a tax on educational spending?

Simply put, this is an outrageous situation, and I am surprised by the lack of effort on the parts of the airlines to combat this. Many retailers in Canada formed the Canadian Coalition for Fair Digital Access to combat levies imposed by the government on recordable media. http://www.ccfda.ca/ While it hasn't been an overwhelming success, it has been very effective at informing consumers as to where there money goes and how they can fight the levies.

The airline industry needs to overlook their differences and band together to initiate a large scale campaign to inform the public about this situation and try to find ways to stop it. If they don't, it spells an uncertain future for their growth...


Our posts seem too long and thoughtful for A.net... maybe this will help: I sure do like NWA's DC-9's, but I heard from a friend of an aircraft cleaner that they are getting rid of them tommorow!  Big grin

-Mike



Someday, we'll look back at this, laugh nervously, and then change the subject.
User currently offlineSlawko From Canada, joined May 1999, 3799 posts, RR: 9
Reply 2, posted (9 years 10 months 6 days 5 hours ago) and read 3557 times:

100% agreement, but this isnt anything new, its beeen discussed here on a number of occasions... Why bring it up again? This country just elected the same bunch of rejects that are the cause of all those taxes and they have no plans of changing things anytime soon. We have no one to blame but the people who voted for these bafoons in the first place.


"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
User currently offlineFLYYUL From Italy, joined Jun 2000, 4980 posts, RR: 51
Reply 3, posted (9 years 10 months 6 days 5 hours ago) and read 3534 times:

Slawko,

Well because the liberals are the lesser of two evils. Vote the conservatives, and well get the George W Bush round about from Harper and his fellows.

But the Liberals need to be held accountable.



User currently offlineVio From Canada, joined Feb 2004, 1424 posts, RR: 10
Reply 4, posted (9 years 10 months 6 days 5 hours ago) and read 3477 times:

To add to this:

WESTJET

Thu, 02 Dec 04
Flight WS 706 14:50 Depart Calgary, AB (YYC)
20:15 Arrive Windsor, ON (YQG)

Regular Fare $176.00 CAD (this is actually a sale)


Departing total cost:

Airfare per /Guest $ 176.00 CAD
Taxes, Fees and Surcharges/Guest (details) $ 58.98 CAD
Subtotal/Guest $ 234.98 CAD
Multiplied by 1 Guest $ 234.98 CAD


Taxes, fees, and surcharges

All guest travel will be subject to the following taxes, fees and surcharges as applicable:
Passenger Facility Charge (PFCs) of up to $4.50 USD
Airport Improvement Fees of up to $15.00 CAD
September 11 Security Fees of up to $5.00 USD
US Arrival/Departure Tax of up to $27.40 USD
US Immigration Fee of up to $7.00 USD
Air Travellers Security Charge of up to $11.22 CAD
NAV of up to $40.00 CAD
Insurance Surcharge of up to $6.00 CAD
Fuel surcharge of up to $40.00 CAD for transborder flights
Applicable Goods and Services Tax, Harmonized Sales Tax,
Quebec Sales Tax
A tax breakdown will appear on your itinerary. Rates are subject to change.




---------------------------------------------------------
The airline is to blame here as well when it comes to price advertising. They leave every tax and surcharge out, to make the fare seem great. What'll be next?

Fare: $90.00
Captain pay: $X.XX amount
F/O pay: $X.XX amount
Ramp agents: $X.XX amount/5 people...

etc...






Superior decisions reduce the need for superior skills.
User currently offlineSlawko From Canada, joined May 1999, 3799 posts, RR: 9
Reply 5, posted (9 years 10 months 6 days 4 hours ago) and read 3444 times:

I dunno if they are the lesser of two evils when it comes to government - private enterprise policy but none the less they had nothing to do with the fees and taxes we pay, save for teh GST, and they are not responsible for the lack of control over the AIF fees that airports all over the country are imposing at will...

Good book though ah?? I just finished!  Smile



"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
User currently offlineNoise From United States of America, joined Dec 1999, 1777 posts, RR: 4
Reply 6, posted (9 years 10 months 6 days 4 hours ago) and read 3407 times:

Time to vote out the Liberals...

User currently offlineDavidyyc From Canada, joined Sep 2004, 238 posts, RR: 0
Reply 7, posted (9 years 10 months 6 days 4 hours ago) and read 3386 times:

I could not agree more, and have always thought to myself why no-one else feels about this the same way. The main problems I think is that when any surcharge or levy is initially tacked onto an air ticket, ON ITS OWN, it does not look like too much, but it is never looked at with all the other many levies and taxes that have been added over the years. Secondly, many people wrongly think that air travel is a luxury reserved for the wealthy and elite 'they can afford to pay the extra' would be the refrain. Thirdly, many politicians who make these decisions have not bought themselves an air-ticket for years, and so are unaware of the problem.

Lastly, I do blame the Liberals for this mess, taxation is always a favourite with them. 'Tax and Waste', should be their new public slogan, I can't believe taht any Conservative Govt would be any worse!


User currently offlineOlympus69 From Canada, joined Jun 2002, 1737 posts, RR: 7
Reply 8, posted (9 years 10 months 6 days 4 hours ago) and read 3382 times:

FlyYUL,

I agree with most of what you say but your math is way off. The true "tax" rates are:

Example 1 47.91%
Example 2 17.46%
Example 3 104.93%
Example 4 24.07%

Tax rates are a percentage of the cost before taxes, not the price including tax, the way you did it.

The reason I don't agree completely with your analysis is that the trans-border costs include taxes to 2 countries, whereas your US domestic fares have only one set of taxes. Admittedly this makes very little difference to the overall picture, which is a disgrace.


User currently offlineAirbus Lover From Malaysia, joined Apr 2000, 3248 posts, RR: 9
Reply 9, posted (9 years 10 months 6 days 4 hours ago) and read 3360 times:

Can't agree more! Not only to airfares but many services or goods bought are heavily taxed. BTW, is this a Canadian only thread or what?  Big grin

User currently offlineMdsh00 From United States of America, joined May 2004, 4124 posts, RR: 8
Reply 10, posted (9 years 10 months 6 days 4 hours ago) and read 3351 times:

I'm not good with my understanding of taxes and the like, but would it be cheaper for someone in Canada to fly an American carrier into the US?


"Look Lois, the two symbols of the Republican Party: an elephant, and a big fat white guy who is threatened by change."
User currently offlineSlawko From Canada, joined May 1999, 3799 posts, RR: 9
Reply 11, posted (9 years 10 months 6 days 3 hours ago) and read 3323 times:

No, butit would be cheaper to drive to the US and get on an American carrier as many people do...


"Clive Beddoe says he favours competition, but his actions do not support that idea." Robert Milton - CEO Air Canada
User currently offlineVio From Canada, joined Feb 2004, 1424 posts, RR: 10
Reply 12, posted (9 years 10 months 6 days 3 hours ago) and read 3321 times:

Mdsh00,

I dont' think so. My parents live in Windsor Ontario,which is right across the river from Detroit. It would make much more sense for me to fly to Detroit Metro than to fly to Toronto (then drive 4 hours to Windsor)

These prices are outrageous. North West or American Airlines are out of the question. Their prices out of Calgary are insane. True I could fly to London or even Windsor (with Westjet) but usually a ticket to Windsor is like 350 dollars one way... and they have crappy departure times etc.

Cheers,

Vio



Superior decisions reduce the need for superior skills.
User currently offlineAC7E7 From Canada, joined Oct 2004, 646 posts, RR: 22
Reply 13, posted (9 years 10 months 6 days 3 hours ago) and read 3309 times:

But the Liberals need to be held accountable

So let's reward them by putting them back in power! I think I may be the only Conservative supporter in Quebec. I hate the Liberals with a passion. They have ruined the airline industry in Canada and will continue to do so. Lapierre is a separatist pig who saw his movement going nowhere (for the moment), and will go right back to the Bloc as soon as the separatist movement is strong again.

A vote for Harper is not a vote for Bush. That's ridiculous. What's crazy is people like Caroline Parrish calling Americans bastards. If Martin was a strong leader he would have kicked her out of the Liberal caucus long ago. He signed her nomination papers! Martin et al are the same old crooks as before. This country needs a change, not more of the same.

As for your analysis FLYYUL, you are right on the money. You might as well drive down to the U.S. and take a flight from there.

-Brandon




User currently offlineCaptainGomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 14, posted (9 years 10 months 6 days 3 hours ago) and read 3289 times:

I didn't see anything in the Conservative's campaign that even hinted at lowering all these outrageous fees and taxes, so as far as I'm concerned, those clowns (sorry  Big grin ) who think things would suddenly change if the government changed, are off the wall.

But I'm in agreement with Mark. The Liberals are the lesser of two (or more) evils, although a change at the helm would be nice in this country.



"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
User currently offlineFLYYUL From Italy, joined Jun 2000, 4980 posts, RR: 51
Reply 15, posted (9 years 10 months 6 days 2 hours ago) and read 3240 times:

Yes the conservatives who want to

-ban same-sex marriage
-ban abortion
-institute right-wing christian policies for all
-join troops in Iraq

Point being is that somebody should wake up the TRANSPORT MINISTER (yes Monsieur Lapierre revoiles-toi mon gars) and make him aware of this problem.

Wait.. he never books his tickets, only his secretaries and co-ordinators  Smile



User currently offlineQblue From Canada, joined Jun 2004, 157 posts, RR: 0
Reply 16, posted (9 years 10 months 6 days 2 hours ago) and read 3232 times:

To my friends in the U.S. Canada is not a rich a you are. We have a very small population base with many social programs to pay for. The government policy for many years now have been USER PAY. You use you pay. The government been getting out of the airport business. They are letting local authorities control and run many of the larger airports. The government does not have the money to improve many of these airport to the level to compete many of our transborder neighbor. By the way the local authorities not use the airport improvement tax for airport improvement but have to pay the federal government rent for the right to run the airport. In YVR case it is over 60 million a year. Yes the taxes are high but I think we are getting a pretty good product like YVR. In Canada enjoy the beauty of the country and the triple taxation the fed legalized robbery. They tax the ticket, they make you pay for the use customs, you pay for security, you pay for Nav Can and the passport I think cost close to $80.00. You might not get mugged or robbed on the street of Canada because the Fed have already done so.




User currently offlineAC7E7 From Canada, joined Oct 2004, 646 posts, RR: 22
Reply 17, posted (9 years 10 months 6 days 2 hours ago) and read 3223 times:

I never said that things would change overnight, however the Conservatives would allow the market to decide rather than regulating a deregulated industry.

Our military is in shambles, healthcare is broken to the point where thowing money at it won't do any good, Air Canada is regulated in a deregulated industry, Martin continues to allow MPs like Parrish to voice their racist opinion of our neighbours (what if she was calling Jews or Mulims "bastards"? We would be calling for her execution! This reflects badly on us as Canadians for allowing this to happen. Shame.

Voting the Liberals back into power was a mistake. Pushing this country even more left than it was before (thanks to the NDP balance of power) will only weaken Canada's voice on the international stage.

Lower the fees and taxes in the airline industry and get the hell out of the industry. PAUL MARTIN, LEAVE THE INDUSTRY ALONE!! AUSTRALIA DID IT, SO CAN WE!!!

ok, I'm done  Big grin

-Brandon


User currently offlineAirbusCanada From Canada, joined Nov 2004, 327 posts, RR: 0
Reply 18, posted (9 years 10 months 6 days 2 hours ago) and read 3202 times:

With a healthy surplus in Ottawa, I think the Feds can afford a few things.

1. Reduce the airport rents across the country.
2. Reduce tax on Jet fuel.
3. Cancel the security fee for short-haul flights within Canada.
3. Negotiate with the US so the trans boarder passengers don’t' get double taxed.


User currently offlineAC7E7 From Canada, joined Oct 2004, 646 posts, RR: 22
Reply 19, posted (9 years 10 months 6 days 2 hours ago) and read 3194 times:

Yes the conservatives who want to

-ban same-sex marriage
-ban abortion
-institute right-wing christian policies for all
-join troops in Iraq


Left-wing propaganda. The Conservatives wouldn't dare try to implement a ban on abortion. Canada is too progressive to allow that. The Liberal propaganda campaign seems to have worked. They scared the public into voting Liberal over issues that fringe Conservative MPs have proposed (even though they would never be made into law).

Canada doesn't even have enough troops/equipment available to deploy in Iraq or anywhere else. I wouldn't worry about such things. It will take years to bring the military back up to standard.

Obviously, the Liberals will be the only party Canada will vote for since there is apparently no alternative. Too bad.


You might not get mugged or robbed on the street of Canada because the Fed have already done so.

This is true. All the money that was taken from us is now in the hands of Liberal-friendly advertising firms.

The airline industry needs to be COMPLETELY DEREGULATED. This won't happen under the Liberals. The Liberals are so backward, that they are proposing allowing U.S. carriers to fly point-to-point within Canada (I'm in favour of this) but they may not necessarily require the U.S. to give Canadian carriers reciprocal rights. What the hell are they thinking??? Only a separatist Liberal could think of something like this...  Big grin

-Brandon



User currently offlinePilotpip From United States of America, joined Sep 2003, 3150 posts, RR: 11
Reply 20, posted (9 years 10 months 6 days 2 hours ago) and read 3179 times:

Let those added fees be a lessson to all of you out there that ATC should never be privatized. NavCanada is killing the Canadian air carriers and if certain people have their way in the states, it will happen here too.


DMI
User currently offlineAirbusCanada From Canada, joined Nov 2004, 327 posts, RR: 0
Reply 21, posted (9 years 10 months 6 days 2 hours ago) and read 3159 times:

The airline industry needs to be COMPLETELY DEREGULATED

and what's our definition of "completer deregulation"?


User currently offlineDavidYYC From Canada, joined Sep 2004, 238 posts, RR: 0
Reply 22, posted (9 years 10 months 5 days 23 hours ago) and read 3058 times:


Mmm.. it is a pity this thread has been side-tracked by political bickering. The bottom line is there are TOO MANY TAXES on our air tickets, and we only have the current government to blame for this. Lets hope we can see some progressive thinking and abolish some of these ridiculous and punitive add-ons!


User currently offlineSebring From Canada, joined Jul 2004, 1663 posts, RR: 14
Reply 23, posted (9 years 10 months 5 days 23 hours ago) and read 3034 times:

You're wasting your time. The government knows how high the fees are. They have been promising to review the fees since 1999. They are addicted to the revenue pure and simple. It's not the transport minister calling the shots, it's the finance department mandarins.

User currently offlineAC7E7 From Canada, joined Oct 2004, 646 posts, RR: 22
Reply 24, posted (9 years 10 months 5 days 23 hours ago) and read 3037 times:

For one, allowing ALL the airlines in Canada to compete without the Competition Bureau accusing a company of undercutting their smaller competitors. WestJet, Jetsgo, Canjet are all able to compete against Air Canada now...well, at least Jetsgo and Canjet can...WestJet had to use corporate espionage.

How about forcing Air Canada to keep its headquarters in Montreal, keep maintenance bases open in Montreal, Toronto, and Winnipeg?

Regulations like these are outdated and make no sense unless the government is trying to keep their voter support happy by forcing Air Canada to keep the bases open and keeping jobs in those cities. If the bases are being used, fantastic, but the airline should have the option of closing a base if it needed to.

I'm glad that the Liberals are looking at a new airline policy, but I'm not holding my breath.

Let the Market decide.





25 Post contains images AC7E7 : I forgot what this thread was all about You are correct Sebring, the government knows how high the taxes are. Change takes years in Canada, and if the
26 Post contains links Planemaker : It is not just a Canadian "problem"... (courtesy of SWA) The "Plane" Truth About Your Fare The airline industry is subject to taxation at federal, sta
27 Post contains images FLYYUL : The USA is a great place to live
28 Marco : Why do Canadians always have an inferiority complex when it comes to the USA? Both countries have their positive sides and their negative sides. And a
29 EnviroTO : The only thing I really have a serious beef with is the two different security charges Canada puts on transborder flights, the ATSC specifically. Why
30 Airplane : How about charters, have anyone seen the taxes now on charters ? a $49 or $99 return to FLL has to be topped up with a $210 tax. This is just insane.
31 LH477 : The Bush Election could be the greatest gift the Liberal gov't can get. If Bush goes through his policies, it could scare the Canadians of the Conserv
32 Marco : Our boys in Canada are simply wolves in sheep's clothing. All a bunch of Neo-Fascists. Seems to me that you liberals are a bunch of dictators. Anyone
33 Post contains images FLYYUL : Because liberal policies generally dont favor the rich, and generall have humanistic social conscious. Not in the USA, were conservatives in their pas
34 LH477 : >Seems to me that you liberals are a bunch of dictators. Anyone who doesn't share your views is either racist or fascist or what have you. Get over yo
35 Post contains images FLYYUL : Worst of all, Repbulicans are exploiting the naive southern christian worldview... essentially, the raison d'etre for conservative philosophy. Urban A
36 Bmacleod : I thought this discussion was about the extra taxes paid by Canadians flying south to the US and other international destinations. I'm wondering how p
37 AC7E7 : Thanks Marco, at least I know I'm not the only one. Our boys in Canada are simply wolves in sheep's clothing. All a bunch of Neo-Fascists Conservative
38 Post contains images Marco : The Americans elect a conservative leader (the majority favored him and his policies) and that's unacceptable. However when Iran or Turkey (despite it
39 Post contains images FLYYUL : And life is based on not accepting gays and women? What moral values are you talking about when you illegally invade war... Marco your a christian (li
40 Post contains images AC7E7 : Illegal wars? What does this mean? Because the U.N. apparently did not sanction it (though it did through Resolution 1441)? Security Council members k
41 FLYYUL : AC7E7. There are hundreds of "Saddam Husseins" out there.. who are forgotten, because specific economic interest do not justify some type on invasion/
42 Post contains images AC7E7 : I can ask the same question about liberals. These are people that hold human rights, equality, etc etc. dear to their hearts, but they sit there wasti
43 Post contains images FLYYUL : Im not to the left.. though I think the USA can fix its social issues (which are severe) by making a small movement to the left (medicare, better publ
44 Post contains images AC7E7 : The U.S. is far from fixing their social problems, whether with right wing or left wing solutions. He may not have had chemical weapons at that point,
45 Yyz717 : But the Liberals need to be held accountable. By re-electing them? Ya right...that works. Mark, you got the Fed govt you deserve. Congrats. Anyone whi
46 Airplane : There are hundreds of "Saddam Husseins" out there.. who are forgotten, because specific economic interest do not justify some type on invasion/removal
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