05 March 2012

Ottawa International Drastically Raises Landing Fees on GA Aircraft

In late 2011 the Ottawa International Airport Authority proposed changing landing fees for light aircraft in an attempt to recover money spent on the north field, the general aviation part of the airport.

A meeting was held between the airport authority and the two flying schools, Ottawa Flying Club and Ottawa Aviation Services, with Kevin Psutka from COPA representing itinerant aircraft. The current fee structure has seen visiting aircraft charged a $30 landing fee, while private and school aircraft are charged a $30 per month and $100 per month flat-rate basing fee respectively. The airport authority claims that the non-capital operations and maintenance costs for the the north field are $59 per landing and that the airline operations at Ottawa are subsidizing GA. Airport authority CEO Paul Benoit explains, "The increase, the first in 10 years is not related to the 2 million plus cost of resurfacing 04/22, that was paid thru our AIF which the North Field does not in any way contribute to. Rent and PILT which the Government assesses one entire campus is not charged to North Field, the increase does not cover full O & M cost of the North Field, the commercial operation subsidizes all of those costs."

The airport authority proposed a flat $20 landing fee for all aircraft landings, (with touch-and-goes exempted) to replace the monthly school and private aircraft basing fees and visiting aircraft landing fee. On 9 November 2011 the airport authority asked the schools and COPA to provide alternate proposals to the airport authority's concept by the end of January 2012.

The airport authority's proposal would lower the cost for visiting aircraft, but dramatically raise it for Ottawa-based private and school aircraft. By COPA's estimates under the airport authority's proposal school costs would rise about 15% per flight. According to COPA this "will significantly affect their business". While the lowering of the visiting aircraft fee from $30 to $20 sounds attractive, in fact visiting aircraft have largely already abandoned CYOW due to the high fees and this reduced fee is still too high to lure their business back. Psutka explains, "for the transient private aircraft owner, the combination of landing fees and NAVCAN departure fee was already keeping most away from the airport so increasing landing fees from their current levels would only further discourage private transient aircraft from using the airport...it is a proven fact that most private aircraft owners will make decisions to avoid an airport when the landing fee is more than $10."

Airport Authority CEO Benoit stated on 23 February 2012, "We have reached out several times to work with the North Field tenants to get input on how to mitigate the costs of the North Field, we have had no response, we are still ready the receive any and all concrete proposals that would mitigate or eliminate this increase." In response to the request for alternatives COPA responded, but neither of the two schools did before the airport authority's final fee announcement deadline of 1 March 2012 and so, given the lack of input by those most affected, the airport authority has announced it will implement the $20 landing fee on 1 May 2012, having given the required 60 day notice.

Psutka's response to the airport authority underlines the key issues:

"Regarding private aircraft that are parked at the north field, most are doing so under arrangements at either OAS or OFC, so I said that I would leave it to OAS and OFC to develop a proposal for fees that would minimize the impact on those users."

"I also stated at the meeting that the key to increasing revenue from the north field, rather than focusing on landing fees, is to encourage aviation businesses to locate and thrive there so that income from rents and other income sources could reduce the need to increase landing fees. This has been COPA's long-standing position."

"Finally, I mentioned that there should be some accounting for the income that the airport realizes from the sale and or lease of property at the north field for non-aviation uses. If this income was taken into account, the costs attributed to the north field could to a large extent be countered by what I can only imagine is a significant source of revenue for the airport, thereby reducing the perceived need to increase landing fees."

"I trust that this summary of COPA's key points will serve as our proposal for dealing with your cost issues and help you conclude that if you want private aircraft to use the facility, increasing landing fees will not accomplish this goal."

With this fee now a "done-deal" for implementation on 1 May 2012, Psutka indicated that he believes that this new fee will result in reduced overall income to the airport authority, not increased income as aircraft and business leave the airport. He stated "The market will now decide whether or not the fee is acceptable."


Michael Shaw said...

I guess it is official, in May Ottawa's landing fee will be $20 / landing, based or itinerant aircraft. No monthly fees for based aircraft.

It's clear now, CYOW management want private aircraft out of Ottawa. What is strange is how they are going about it, they spend a couple million on new pavement in the north field. Which relieves capacity of the main runways for airliners by providing an alternative for light aircraft, then they want to charge private aircraft the full cost of the north field. Hey, the north field is a big advantage to all airport users (airlines, passengers, cargo ops, hotels, taxis, limos, restaurants, car rentals...not just itinerant and based light aircraft. Let's share the cost and invigorate the north field.

Sure it's now a little cheaper for visiting private flyers ($20 vs. $30 per landing), but they have all but disappeared already, and it is unlikely any more will come to CYOW especially once the services provided by OFC and OAS are gone? How long will avgas be available at Ottawa? And how long will it take to develop non-aviation activities on the north field lands once the anchors, OAS and OFC are gone?

In spite of COPA's analysis that clearly shows the impact of landing fees on an airport's use by private aircraft, and suggestions to pursue a business model that attracts activity to the airport, the airport Authority could not see any marketing solutions beyond raising prices. It also appears that OFC and OAS were ignored as well, if indeed they made constructive suggestions.

And you ask where are the City, the Provinces, the Federal Government when it comes to airport services. Well over the last 50 or more years Transport Canada and the federal government taught cities and provinces that airports were a federal responsibility. Then in the mid-1990s the feds pulled out of airport operations. It apparently is taking a while for local folks to realize the short sightedness of abdicating their roles to the feds.

Terry Cooper said...

I'd already stopped going to CYOW for any reason. I did however use the field once for an emergency landing for which I of course got a bill.
I don't think I'll even use the field again for an emergency, unless I really can't make it to another field.
It's too bad. I used to participate in the annual OFC fly day to support charity. However the fees and the OFC belief that if you haven't flown into CYOW recently you can't safely do so for their charity event has meant that I haven't participated for a while. I'm sure I'm not alone.

Adam Hunt said...

There seems to be a great deal of suspicion that the airport authority really wants to remove all the aviation uses along the north end of the airport so they can expand their strip mall business. The fact that they have recently torn down old hangars and the old terminal building adds to this feeling. Only the flying club and the building OAS is in now lies between all that newly vacant land and the strip mall that T&T is now in. These landing fees will certainly help vacate that land quite quickly and the airport authority has people smart enough to know that.

Adam Hunt said...

In many ways this fee proposal represents a clash of philosophies. The airport authority is saying that they run a business and it has to cover costs and they have divided the business into "units" that have to be self-supporting and the north field (excluding the strip mall and other north field derived rents) is one of those units.

Opponents are indicating that you can't divide the business into units like that as it is arbitrary and destined to show some units up as money-losers. For instance why isn’t the grass infield a business unit that has to make money?

Adam Hunt said...

I have been curious as to how this new proposal will affect CYOW-based aircraft and some quick math shows some telling results. Of course this assumes that locally based aircraft remain locally based and don't depart or fly less to save money.

Right now a private aircraft is paying a basing fee to the airport authority of $30/mo (that is in addition to parking, etc). If a typical private aircraft does ten landings per month then the new fee would be $200/mo, which is an increase of 666%.

For a school aircraft that was paying $100/mo and does six full stop landings a day at CYOW the new fee would add up to $3600/mo, which would be a 3600% increase.

I think those numbers have to give operators pause to think.

The airport authority seems to believe they will get more money from this model but COPA believes that the number of aircraft landing at CYOW will diminish. Only time will tell, but I think we will have an answer to that by the end of summer.

Adam Hunt said...

Update on this issue from Kevin Psutka today:

"For the Flight and your web site, you can let everyone know that the minimum landing fee for itinerant aircraft of $20 (up from $15) goes into effect on 1 May. Touch and goes are 20% of the landing fee. OAS and OFC have completed a negotiation with the airport and achieved a lower rate than was announced recently. The landing fee for their aircraft will increase by 33% We will see how much a $20 landing fee brings the airport in revenue from small itinerant aircraft."