High cost of flying damaging Canadian economy: study

You may want to fasten your seatbelt when you hear how much Canada may be losing because of the high cost to fly.

According to the Montreal Economic Institute, the country’s airline industry loses about five million passengers a year because they choose to cross the U.S. border and fly from there to their destination.

The study cites multiple estimates and claims that loss translates to $2.4 billion in lost economic output, as well as 9,000 jobs.

The Institute’s president, Michel Kelly-Gagnon said it’s not actually the base fares that are the problem, it’s the added fees and surcharges.

“What the airline really charges is often not that different between Canadian and American airlines,” he said, pushing past recommendations for the federal government to eliminate airport improvement fees and open up private investors into airports.

“Air travel is really part of our economic infrastructure and they should treat it in those terms,” he said.

The study cites the comparison of a flight from Montreal to Fort Lauderdale, compared to from Plattsburgh, NY and the Montreal flight was 36 per cent higher.

The study says eliminating the feeds would cost Ottawa about $280 million, but $50 million would be recouped because of increased passenger traffic and the private investment would also make a major difference, which is being regularly done in airports around the world.

“Canadian investment funds, such as teachers and La Caisse de Depot in Quebec and surely others are investing in airports around the world, so we could have partnership,” he said. “The whole point in the end is an issue of competition and it’s an issue of responding to the needs of the consumers.”