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
Navcan and Surcharges 55.00
Canada Airport Improvement Fee 15.00
Canada Goods and Services Tax (GST/HST
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
Grand Total (Canadian Dollars) 499.94
So you the consumer are a 33% tax rate on an airplane ticket!!!!!!
Example no.2 AA 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
base Fare: $142
After Tax: $291
Tax rate: 51.2% for a 250Nautical Mile flight?
base fare $108
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.