Canadian Airlines Cheer Push to Lower Security Tax

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Canadian Airlines Cheer Push to Lower Security Tax
By Robert Melnbardis

MONTREAL (Reuters) - Canadian airlines cheered a parliamentary committee's
recommendation on Thursday to substantially reduce the C$24 ($15) airport
security tax on all round-trip tickets.  "The reduction of the air
traveler's security tax is of critical importance to this industry," said
Joseph Randell, president and chief executive of Air Canada Jazz, Canada's
largest regional airline.  "The security charge has, without doubt,
contributed to the dramatic reduction in short-haul passenger traffic in
this country," he said in a statement.  On Wednesday, Ottawa's standing
committee on transport passed a motion put forward by James Moore,
transport critic for the opposition Canadian Alliance party, calling on the
government to immediately reduce the tax, which weighs proportionally
heaviest against cheaper, short-haul fares.  The committee, made up of nine
members of the ruling Liberal Party and eight from opposition parties,
unanimously adopted the motion.

Canada imposed the surcharge following the Sept. 11, 2001, hijacked
airliner attacks against the United States. The tax was aimed at paying for
improvements in airport security, but Moore said Ottawa has not provided
enough information about how the funds are actually being used.  Airlines
such as Air Canada, the country's dominant carrier and world No. 10, and
Calgary-based no-frills carrier WestJet Airlines Ltd. have complained that
the security tax is onerous and has contributed to a steep falloff in
short-haul flights this year.  Moore said the tax has contributed to a 10.2
percent decline in passenger traffic across Canada since the beginning of
the year. On some short routes, such as between Saskatoon and Regina,
Saskatchewan, traffic has plunged 50 percent, he added.  "It's having a
devastating impact. It's the highest security tax in the world," he told
Reuters.
In the House of Commons on Thursday, Deputy Prime Minister John Manley said
the tax will be reviewed, but he said the charge would be continued to pay
for security expenditures.

"We believe in running a balanced budget.... Furthermore there's absolutely
no evidence, no evidence, that the fee has reduced air travel," he
said.  Both Air Canada Jazz and WestJet have been cutting back on
short-haul routes, affecting service to smaller communities.  The transport
committee's decision is not legally binding on the government, but sends a
strong message about how both industry and the traveling public are opposed
to the tax, Moore said.  "We had everybody before the committee -- Air
Canada Jazz, WestJet, travel agents -- we couldn't fine one single person
who supported the status quo," he said.


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