My column in September 2006 explained the implications of the Canadian Transportation Agency’s decision against our arguments concerning the new $10 daily fee (to a maximum of $1,200 per year) Nav Canada will apply at seven airports starting in March of 2008.
Besides safety and fairness arguments, I explained my fear that the introduction of a pay-as-you-go fee to our sector would be the tip of the iceberg for more to come. Well, that time has come with yet another proposed pay-as-you-go fee for certain aircraft weighing less than three tonnes.
The proposal involves extending the charging formula that applies to commercial and business aircraft weighing more than three tonnes to jet powered aircraft weighing less than three tonnes.
The formula is a complicated combination of a terminal fee on each end of the trip (if the airport is served by NavCan) and an en route charge involving the weight of the aircraft and the distance flown.
The calculation is explained on Nav Canada's website.
The proposal is specifically aimed at the new Very Light Jet (VLJ) market that is just taking off, but by definition it also captures aircraft such as the amateur-built BD5-J aircraft.
I believe that in part the desire to charge these aircraft is due to the perceived impact that some will have on the air nav system; flying in the stratosphere at slower speeds, and also in part because of the airlines’ concerns that this “competition” will have an unfair advantage if they are not charged on the same basis.
We can debate whether or not this is competition, but the main concern is for the private sector who has no ability to pass costs on to passengers as the airlines do and for the safety and reasonableness concerns when pay-as-you-go is applied to our sector.
The proposal and supporting documentation is on NavCan’s website. It is relatively buried in an announcement of a fee reduction, which for our sector will involve a reduction of the annual fee from $71 to $69 plus tax in March 2008.
For most of us, this is a reduction. However, if you are located at one of the seven airports where the new daily fee will be in place, your costs could increase by as much as $1,200. And if you own a jet powered aircraft, the sky is the limit, starting with a minimum annual fee of $229 to replace the current annual fee for our sector and the complicated pay-as-you-go fee.
Here is an example of the new fee. For a BD5-J flight from London, Ont. to Ottawa and return, there is a terminal fee on each end plus an en route charge for a total of $35.88 plus tax. For a D-Jet it would be $122.52 plus tax and for an Eclipse Jet it would be $137.72 plus tax. There is a daily maximum for these aircraft of $140 plus tax. So, if you use the system a lot or go a long distance in any one day, the limit would be $140 plus tax.
The Details and Principles document on Nav Can’s website addresses each of the charging principles and asserts the proposal does not violate any of them. I take issue with some of NavCan’s assertions.
35 (1) (b) Charges must not be structured in such a way that a user would be encouraged to engage in practices that diminish safety for the purpose of avoiding a charge;
For some smaller jets, owners will avoid the use of the system in order to avoid the fee. They will fly VFR instead of IFR, they will not file flight plans so as not to trigger the daily charge, they will fly around the fringes of terminal airspace and not request flight following en route, all of which contributes to collision hazards and will in some cases involve flight in marginal weather conditions rather than flying over it.
Furthermore, the new charging structure will cause some owners to choose an aircraft less capable of avoiding the weather in order to avoid this charge.
The original charging methodology for the private sector provided a balance and recognized the cost sensitivity of this sector but it is being upset by the application of commercial and business methodologies to the private sector. The original charging methodology did not differentiate between IFR and VFR for our sector because it was recognized that putting a charging structure in place that would discourage IFR flight by our sector would discourage safety.
The proposal specifically mentions that small jet powered aircraft “typically operate IFR” and therefore should pay more than VFR aircraft. Our sector can make choices that other sectors cannot, including flying VFR to avoid fees. Whether it is for a Cessna 150 or a Diamond D-Jet, pay-as-you-go for our sector is unsafe and inappropriate.
35 (1) (f) Charges in respect of recreational and private aircraft must not be unreasonable or undue;
The choice of the term VLJ and the definition that it includes all jet powered aircraft unreasonably captures small recreational aircraft, many of which are purely flown for recreational purposes, at lower altitudes and do not use much of the air navigation system or services. One example is the amateur-built BD5-J.
While it can be argued that some VLJs will use the system extensively, many (especially the single-engine aircraft) will be limited by performance to lower underutilized airspace.
Again, when the original charges were developed for our sector, we negotiated a methodology that was relatively simple and applied to all non-commercial, non-business aircraft, so it would be reasonable and not undue.
It was our understanding that any differentiation within our sector would be undue. Introduction of any charge that differentiates aircraft within our sector would be undue, especially one that is as complicated as this new charge would be.
“Unreasonable or undue” is not defined in the Act, so it is up to the Canadian Transportation Agency to decide. Small, recreational aircraft will be subject to a complicated costing structure and a minimum annual fee that is indeed unreasonable.
Even if the calculator on the Nav Canada website will be revised so that it is useful for smaller aircraft, it is incumbent upon recreational pilots to work these additional costs into their flight planning. Keeping track of all of these charges is undue.
It is unreasonable to expect foreign non-commercial aircraft owners to understand all of the charges that may apply to them. A pricing structure involving quarterly charges, daily departure charges and now terminal and en route charges is far too complicated.
Recreationally flown aircraft to this point have been treated differently from other aircraft in recognition of the nature of their operation and the inability of their owners to pass on costs to paying passengers. Some of the smaller aircraft captured by this new fee will be single-engine and fly for purely recreational purposes. It is unreasonable to treat these owners and operators like commercial operators.
Performance limitations of some of these aircraft, especially those that are single-engine, will result in cruising altitudes below FL300; airspace that is underutilized. These aircraft will not interfere with other higher cruising aircraft and yet they will be, in effect, penalized for using this underutilized airspace. This is unreasonable.
35 (2) The charging methodology may recognize that the value of the services differs among users.
Regardless of the type of aircraft flown, the value of the services is the same for private, non-business users, whether they fly piston or turbine powered aircraft.
35 (3) Where the Corporation’s charging methodology recognizes the value of the services and aircraft weight is used as a measure of the value of the services, the principle referred to in paragraph (1)(a) is deemed not to have been observed if aircraft weight is taken into account either directly proportionally or greater than directly proportionally.
COPA remains opposed to the new daily charge and disagrees with an assertion that a daily fee would be considered a flat fee. Any charge that is incurred on a per use basis cannot possibly be a flat fee. The Canadian Transportation Agency’s assertion that an annual cap on any fee makes it a flat fee simply does not make sense.
If you wish to comment on this new fee, you have until June 22, to do so. I will be contacting each manufacturer in hopes that they too will protest this fee.
What’s next for our sector? As I watch with interest the debate in the U.S. over user fees, I wish them luck in holding off what is apparently death by a thousand knives here in Canada.