News that Air Canada was cutting about 7% of its systemwide capacity came on June 17 -- the same morning that the CAC was slated to present to the House of Commons Standing Committee on Industry, Science and Technology on the subject of tourism competitiveness.

Citing fuel prices as the main impetus for the capacity cuts, Air Canada also noted that "In addition to record high fuel prices, Canadian carriers are forced to contend with federal and provincial fuel excise taxes, security fees and airport charges that are amongst the most expensive in the world today."

CAC President Jim Facette echoed these comments in his remarks before the committee.

"In order to operate in a cost competitive business climate and provide a competitive product, we need the federal government to view aviation as an economic generator and not an industry to be taxed at will," said Jim.

The impetus for the standing committee's investigation of tourism competitiveness was a recent report from the Tourism Industry Association of Canada, which also addressed the standing committee on June 17.  According to the report, Canada's travel deficit has ballooned to $10.3 billion in 2007 and the latest quarterly numbers for 2008 show a continued deterioration.

 

Air carrier lobby groups in the U.S. and internationally (IATA) have come out publicly against the latest EU proposal to incorporate aviation into emissions trading.
 
According to press reports, the European Parliament has approved a plan that would incorporate aviation emissions into the EU emissions trading scheme starting in 2012. The measure includes all flights to or within Europe. 85% of allowances will be provided for free with the remaining 15% being auctioned off.
 
Reduction targets reportedly would be calculated examining airlines' average annual emissions between 2004 and 2006: these are to be reduced by 3% for the 2012 cap and 5% for 2013, with further reductions agreed following a review. Permit auction revenues are supposed to be spent on climate-change mitigation; research on clean aircraft; developing anti-deforestation measures; and low-emission transport technology.  
 
IATA calls the move the "wrong answer," charging it is unilateral, extra-territorial and violates the Kyoto Protocol. It says the move will add EUR 3.5 billion in costs to the airline industry.
 
The Air Transport Association of America (ATA), the industry trade organization for carriers in the U.S. airlines, voiced "harsh opposition" to the legislation, saying that the proposal violates the Chicago Convention, the treaty governing international aviation, as well as other international laws. 

The Greater Toronto Airports Authority (GTAA) announced recently that cargo landing fees at Toronto Pearson will be reduced by 25% effective Jan. 1, 2009.

By reducing cargo landing fees, the GTAA says it aims to enhance the economic competitiveness of the Greater Toronto Area. It says that additional cargo business from carriers taking advantage of this reduction may remove as many as 40,000 trucks per year off Ontario roads - trucks that now travel from the GTA to airports in New York and Chicago.

The new fee reduction initiative also includes provisions that will encourage air carriers to modernize their fleets to newer, quieter and more fuel-efficient aircraft.

"Maintaining Toronto Pearson's competitiveness is important to our region and ultimately for Canada's economy," said Lloyd McCoombm GTAA president and CEO, in a statement. "It also signals that we are responsive to the needs of our cargo carriers."

"Moving products to market quickly and cost effectively is imperative for a strong economy here in the GTA and across Canada," added Jim Flaherty, Canada's Minister of Finance and Minister Responsible for the Greater Toronto Area. "I applaud the Greater Toronto Airports Authority for taking steps to reduce their fees at a time when transportation costs are increasing at an unprecedented rate."

Toronto Pearson processes more than 45% per cent of Canada's air cargo, serves a population of more than 5 million, processes $31.7 billion of goods per year, and moves more than 500,000 tonnes of cargo annually.

The Ottawa International Airport Authority recently announced that effective July 1, 2008, it has reduced its general terminal fees by 5%.
 
Ottawa says it recognizes that the aviation sector is an industry in crisis, given the skyrocketing cost of fuel and the weakened economies in Canada and the U.S.  The fee reduction is aimed at helping strengthen the industry and the airport says it is looking at other ways to further reduce rates and charges.
 
"This is not just an airline crisis, but one that impacts the entire industry and ultimately our communities" said Paul Benoit, president and CEO of the Ottawa International Airport Authority.  "We recognize the importance of doing our part and will be looking at ways to further reduce our fees over the next several months."

"Air Canada salutes the Ottawa International Airport Authority and its president and CEO, Paul Benoit, for demonstrating leadership and foresight by voluntarily reducing its fees," said Duncan Dee, executive vice president customer experience and chief administrative officer at Air Canada.

"We thank the Ottawa Airport Authority for this reduction in fees," said Ken McKenzie, executive vice president, operations for WestJet. "With record fuel prices now having a significant impact on airlines around the world, the Ottawa Airport Authority has clearly taken a leadership position in recognizing a need to drive costs out of the system in light of record fuel prices."

The airport authority operates Ottawa International Airport without government subsidies under a 60-year lease transfer agreement with Transport Canada. Its mandate is to manage, operate and develop airport facilities and lands in support of the economic growth of the National Capital Region.

The Canadian Air Transport Security Authority (CATSA) has  launched a pilot project at Kelowna International Airport to test whole body imaging technology on a voluntary basis. Also called millimetre wave (mmWave), the new equipment is integrated with existing screening capabilities at the Kelowna International Airport test site.
 
Millimetre wave technology generates detailed images of the body without physical contact between the screening officer and the passenger. The technology works by projecting low-level radio frequency (RF) energy over and around the passenger's body producing a three-dimensional image of the passenger. The images reveal objects, including weapons and explosives, which may be concealed under clothing. The image is monitored by a screening officer in a separate room, with no view of the actual passenger.
 
Passengers departing from Kelowna and travelling within Canada will be offered the opportunity to volunteer for the pilot project until January 30, 2009. Following the trial period, CATSA will examine the data and present its recommendations to Transport Canada.

In the United States, the Transportation Security Administration is piloting the millimetre wave technology at serveral airports. Other airports in the world are also using the technology.