Thursday, June 14, 2012

An interesting story on the economics of air travel

From NPR's The World:

Canadian airports don’t like the trend either. They say Canada’s losing $2 billion a year to “passenger leakage.” Daniel-Robert Gooch, president of the Canadian Airports Council, said the problem is that Canada’s air travelers are expected to pay for airport improvements through taxes and fees.
“We have taken an approach in Canada to aviation that’s different from the U.S. and other parts of the world,” Gooch said. “We don’t subsidize airports in the way that takes place in the U.S. and other parts of the world, so we see the users paying 100 percent of the costs.”
A June 5th report from the Canadian Senate echoed those concerns, arguing that Canada’s airports need tax breaks to compete with their subsidized neighbors to the south.
Airline passengers in the U.S. do pay fees to support airport infrastructure. But U.S. taxpayers pick up the tab for other improvements — like a $30 million dollar upgrade to the Bellingham airport runway.

1 comment:

  1. First the nit - PRI is Public Radio International, and is not part of the Corporation for Public Broadcasting family.
    This is not an uncommon event in border areas. Think Massachusetts and New Hampshire and the tax differences between the two states. Just because it is a service and not a good that is being purchased is not surprising. Moreover this occurs locally too, many fly from Newark airport instead of LGA or JFK (or Pasadena/Ontario instead of LAX) to avoid $100 fare penalties.