Transcript COPA BC Pilots Meeting

Canadian Owners and Pilots Association
Aviation Issues in Ontario
Kevin Psutka
President & CEO
COPA’s Mission
The Canadian Owners and Pilots
Association promotes and
protects Personal Aviation as a
valued, integral and sustainable
part of the Canadian community.
Some Definitions
Personal Aviation is that sector of General
Aviation where aircraft are flown for
personal transportation and recreation,
and where aircraft operation does not
require a commercial or higher pilot
license.
General Aviation is that sector of aviation
where aircraft are not used for airline or
military activities.
Current sources of funding for
smaller airports
Federal: Airport Capital Assistance Program
(ACAP) - Available only to airports with
scheduled airline service.
Provincial: none in southern Ontario that we are
aware of.
Municipal: a variety of arrangements from none
to partial support.
User fees: landing, parking, fuel fee, tie-downs
and hangar rent, municipal taxes.
Quotes from Study
“There are currently 18 Airports Capital
Assistance Program (ACAP) eligible municipal
airports within the 85 …”
ACAP serves the needs of very few.
“…the impact of the federal government’s
withdrawal from airports has had a neutral to
negative impact on municipal airports in
Ontario.”
The National Airports Policy abandoned
smaller airports.
Quotes from Study
“The Province of Ontario became involved
in airports in the late 1960s (Municipal
Airports Program) when it was felt that
federal policies were not supporting the
development of local
community/municipal airports to support
social service needs or for economic
development purposes.”
Quotes from Study
“the Province no longer has a role in
funding of municipal airports or the
coordination of airport development
in Ontario.”
As a result of federal actions in the past
ten years, a Municipal Airports Program is
again needed.
Quotes from Study
“Many studies have been completed in
the past five years, dealing with small
airports issues... All of these reports came
to similar conclusions – that small airports
have exhausted the opportunities for
efficiencies and are in need of external
financial support if they are to continue to
operate.”
How much more proof is needed?
Do we need key airports to fail before
politicians will take notice?
Quotes from Study
“Ontario differs from several other provinces in
support for airports, particularly British
Columbia, Alberta and Quebec which have
programs specifically for airports and/or
transportation. Similar to airports in Northern
Ontario, airports in other provinces also have
access to various federal funding through
several geographically focused agencies (e.g.,
Western Economic Diversification, and Atlantic
Canada Opportunities Agency).”
Ontario airports are distant poor cousins to
airports in other provinces and yet Ontario
has the most aviation activity.
Quotes from Study
“The (aviation fuel tax) revenue ($58.5 million)
is credited to Ontario’s Consolidated Revenue
Fund and helps contribute to other needs such
as health care and education. It is not reinvested in the provincial airports system in the
same way that a portion of the vehicle fuel tax is
reinvested in the roads system.”
This is a classic cash cow scenario – you
milk a cash cow dry, with expectations that
it will eventually die, in favour of a rising
star.
Quotes from Study
“Transport Canada predicts that carriers
will transfer non-profitable routes to small
independent operators operating smaller
aircraft, and that the number of markets
with direct air service will increase.”
This is a rising star scenario that
should be supported.
Quotes from Study
“74% of the responding airports consider
themselves financially not self-sustaining (i.e.
insufficient cash flows to cover operating
costs).”
“The operating requirement for all 85 municipal
airports is estimated to be in the range of $5.1
to $5.9 million a year… the annual estimated
airside capital requirements for the non-ACAP
eligible airports are in the order of $5.5 million.”
This is only a small percentage of the funds
that are taken out of aviation ($58M in fuel
tax)
Quotes from Study
“total output (from employment)… is
estimated to be $1.7 billion.”
“This wage income translates into $10.7
million in provincial income tax revenue
from direct employment activities at the
airport, and $23.4 million from total
employment activities.”
Quotes from Study
“airports generate in the order of $6.3
million in direct property tax revenue for
Ontario communities.”
These statistics prove that airports and
those who work there contribute to the
community far in excess of the cost of
running the airports. This has been proven
in all other studies across Canada.
Ontario is starving a major economic
generator.
Who should pay?
Should users pay more to cover the
deficit?
GA’s Ability to Pay More
As highlighted in COPA’s Guide to Public
Airports, pilots consider fees as a
disincentive especially when they spend
hundreds of dollars at each stop on
services such as fuel, which many times
includes fuel concession fees, and in the
local economy for taxis, rental cars food,
hotels and other purchases.
COPA Guide to Public Airports
“Capital infrastructure investments are often
difficult to justify to local Council who may not
recognize the importance of airports in the
economic value chain.”
The focus is too often on airport tenants
and users’ ability to pay rather than on
what economic benefits the airport brings
to the community as a transportation mode
and hence worthy of the community’s
financial support.
This is a recipe for disaster
Some More Statistics
Perhaps General Aviation is in decline in
Ontario and therefore does not need as
much infrastructure.
There are 31,000 aircraft in Canada and
over 9,000 are in Ontario.
Ontario-based Aircraft
This weighs 12,500 pounds
The role of small airports is
changing
Demand is shifting, due in part to the security
delays and rising costs at large airports.
Very Light Jets (VLJs) are coming - aimed at
personal travel and air taxi charters to avoid
large airports and increasing security delays
and costs.
Ontario is perfectly positioned, geographically,
to take advantage of this emerging mode of
transportation.
VLJs
Eclipse 500
Cessna Mustang
VLJs
There are over 2000 on order, with first
deliveries planned for early 2007.
It remains to be seen how VLJs will be
used but it is already clear that the
demand will be for smaller airports, closer
to final destinations such as branch
plants, head offices, business meetings
etc.
Conclusions
The number of small aircraft is increasing.
Demand for small airports is increasing from
new markets such as VLJs.
Ontario remains the lead province for GA.
Ontario stands out from other major GA
provinces for its lack of support for its airports.
The feds have backed away from smaller
airports.
Ontario airports are in decline just at a time
when there is increasing demand.
GA in the GTA
A conservative estimate from Transport
Canada statistics indicates that there are
1,600 small aircraft in the GTA.
How does Toronto compare with other
Canadian cities?
Villeneuve
Cooking Lake
Pitt Meadows
A General Aviation
policy is needed for
the GTA, Ontario and
across Canada to
ensure that airports
are available to serve
the public.
Recommendations
At the Federal level:
Review National Airports Policy.
Air Policy to include GA.
ACAP funding expansion to include
relaxed qualification criteria and increased
size of fund.
At the Provincial level:
Allocate fuel tax to aviation.
Restore previous support through
Municipal Airports Program.
Get involved in the Pickering due diligence
exercise.
Kevin Psutka
613-236-4901 (ext 102)
[email protected]
www.copanational.org