AlO - the Terrace Standard, Wednesday, August 4, 1999

Airport user fee masks 9

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hike in airline revenues

By ROD LINK and MALCOLM BAXTER
THE TWO AERLINES flying into the airport here appear
to have quictly engineered a revenue increase of more than
$280,000 a year,

They’ve done so through a new fee being charged for
passengers using the airport.

That fee amounts to an extra $13 per return ticket as of
Aug, 15 — more than four times the amount predicted by
the Terrace-Kitimat Airport Socicty when it announced the
new fee structure last month.

And more than half of that difference comes from what*
amounts to an iavisible fare hike and extra revenue airlines
are going to grab when the new fce comes into effect.

Here’s how, ;

When the airport society announced ihe new fee last
month, it said it needed $16 per round trip to ensure it hit
traditional revenues from the airlines plus about $150,000
extra to build up a capital expense pool.

Airlines now pay based on the size and weight of the air-
craft they use and the number of passenger seats on each
plane. The socicly based its budget on those waditional
revenue figures,

But reaching that Figure became a problem right away.
Canadian Airlines pulled its 737s from the route last fall in
favour of wholly-owned subsidiary Canadian Regional
Airlines. It flies smatler F-28s so the amount of money the
airport collected began to drop.

The situation worsened when AirBC cut the number of
its daily fights. And in July, AirBC replaced its Bae-146
jet with the smaller Dash 8, cutting the revenue even fur-
ther, The socicty estimated the (otal revenue loss at
$280,000 a year,

So the $16 fee was needed to avoid a budgetary crash
landing. The airlines say they'll break out the new per-
passenger fee as a separate charge and reduce its base tick-
et price by the amount it had built into the old price to
cover what it had been paying under the old system.

So far, so good.

But (hen both airlines announced the separate charge
would be $19 per return flight, $3 more than the amount
they were to be charged by the society.

Why?

They say the $16 figure doesn’t include GST plus they
are going to pay travel agents a 9 per cent commission on
the fee for its collection.

Slide
fault
found

BOTH THE forest service
and Skeena Cellulose have
been found at fault because
of a small 1996 landslide, a
portion of which flowed into
a small stream northeast of
here, says the Forest Prac-
tices Board.

The slide occurred after a
logging road was cut too far
into unstable terrain.

The board found that
while the Kalum forest dis-
trict office had information
the terrain was unstable, it
didn’t make Skeena Cel-
lulose aware of the problem

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But that doesn’t quite cover the discrepancy, Add ihe
commission ($1.44) and the GST ($1.12) to the airport
socicty’s fee and you arrive at a figure of $18.56.

In other words the airline pockets the extra 44 cents on
every return flight

Granted, that’s a drop in the bucket on a normal alefare
out of here, but that’s only the beginning.

When it comes to the amount that Canadian Regional,
for instanee, pays under the current system now, the figure
is $6.65 per passenger per return trip, It intends to recog-
nize that by dropping the base ticket price by another
rounded figure — $6.00.

Which means it will puil in an extra 65 cents in revenue
there for a total gain of $1.09 per return ticket.

But here’s the kicker: Canadian Regional says its per
passenger Teturn cost under the old fee system was only
$6.65, not the $12.76 claimed by the airport society when
il suggested flyers would not feel much of a bite.

Both airlines announced the new and
separate charge passenger charge would
be $19 per return flight, $3 more than the
amount they were to be charged by the
airport society.

Why?

So who’s wrong? Interestingly, it appears neither. The
society was basing its figure on the revenue it received
when Canadian Airlines and AirBC were flying in their big
jets.

Canadian Regional is basing its figure on the charges it
has paid since it has started flying its smaller craft into the
airport in October of last year.

In other words, the cost io the Canadian operation —
whatever name it was flying under — in servicing our air-
port dropped $6,11 per passenger per round trip as of Oc-
tober,

However, ticket prices did not drop by that amount.

Which translates to an overall extra revenve total for the
airline since last October of $7.20 per return trip passenger
— the invisible fare increase which acts as a revenue gain.

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ina timely fashion.
As well, the board found

1999 PONTIAC SUNFIRE COUPE

Down Payment Monthiy Payment Total Obligation

Skeena Cellulose did not $0 $242/month $8,737
comply with the Forest - : $1,000 $214/month $8,709

Practices Code by leaving
the cut in an unstable condi-
tion for several weeks.

After the slump occurred,
the board found a resulting
investigation by the Kalum

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districl forest manager was
too narrow in its scope and
didn’t consider all the issues
brought up by the person
who first brought the slide
to the district's attention.
“The district investigation
did not consider all relevant

issues, so that the district ©

manager's determination of

no contravention [of the |

Forest Practices Code] and

no penalty was flawed,’” -

said the board in its find-
ings.

The board also found there
was poor communication
within the district office.

A small portion of the
slide enlered a creek called
No-name Creek, which is
habitat for 4 protected
species of tailed frog.

li wasn’t on the protected
list of species when the slide
did occur, but is now.

No penalties were as-
sessed by the review board
but it did issue a number of
recommendations centering
on the need for better com-
munication between the dis-
trict, forest companies and
people who make com-
plaints.

Richard Overstall, who
works for the Gitxsan
Lax’skiik (Hagle) clan,
which filed the complaint,
said its generally pleased
with the findings

But he said the clan is dis-
appointed that while the
review board found the
Forest Practices Code was
contravened, no further
penalties were assessed.

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