Proposed airport privatization will drive up costs for travellers, say CEOs

[timel]

Anyone has thoughts about this?
My guess is it would be bad news for commuters, if plane tickets price really go up because of higher airport fees and it would not be good news for the Canadian industry.

http://www.cbc.ca/news/canada/british-c ... -1.3848696

[TheStig]

Its not surprising that the airport authorities don't want to see their golden tickets sold off to the private sector. They'd be unemployed before the ink on the sale dried, it's not entirely their fault but the current setup certainly isn't conducive to cost conscientious efficiency. The larger airport authorities in Canada act like monopolies without any restrictions on fees passed along to consumers, building whatever they wish without consulting the airlines as to what they actually require.

As somewhat of a stakeholders and a tax payer, I'd like to hear both sides of the equation. The article linked certainly doesn't provide much balance and perspective.

Would the government still collect 'rent' if the airports were privatized?

What oversight would be in place? Limits on fees, the number of airports one corporation can own, etc.

With airlines restricted to 49% foreign ownership why can Canadian airports and other national infrastructure (highways, ports, etc) be foreign owned?

What are some other examples of public/private investments that can be referenced, certainly Canada isn't the first county to do this.

[timel]

Air Canada CEO is opposed to the privatization of Canadian airports. He seems to be suggesting we point our attention more toward the actual governance of airports.

Our airport taxes are definitely too high, somehow I agree with this text and I am not sure how privatization would improve it in any way.

http://www.theglobeandmail.com/report-o ... e33359029/

[Rookie50]

Maybe these guys are just protecting their cushy status.

Only reinforces my view Canada has become a government sponsored country club:

From the YVR page:

"The salary range for the President & CEO is $360,000 to $540,000, with a midpoint of $450,000. The salary range for Senior Vice Presidents is $196,000 to $294,000, with a midpoint of $245,000. For Vice Presidents the salary range is $168,000 to $252,000, with a midpoint of $210,000."

Vp's? Senior Vp's? What do they think this is, DFW?

Governments are incapable of competently running any business.

[Rockie]

"I think it would be a mistake to sell it off to a private company for a one-time hit," he said. "Right now the airport is purpose-driven, not profit-driven."

Craig Richmond
CEO YVR Airport Authority

Airports are infrastructure and right now are run as nominally "non-profit". Sell them privately and they become a cash cow for private owners instead of the Canadian government, which is basically us as Canadians. Through government ownership airports are still essentially answerable to us, and I would no more want airports in private hands than any other infrastructure like water, power or roads. It would be like highway 407 only much, much worse because there would be no alternative route.

[rigpiggy]

because the parkland experiment is paying off so well. don't worry they will add poison pills to prevent anyone else building a competing station. Kind of like Navcanada's exclusive foreflight agreement. As soon as someone gives me canadian approach charts on android, apple will be banished, or given to my kids

[Rookie50]

". "Right now the airport is purpose-driven, not profit-driven."

Except for Mr. Richmond and his Nine -- count em' 9 -- six figure paid VP's for a modest airport on the world scale.

That is the fact. Everyone is just protecting their rice bowls.

Another BC company I glanced at, West Fraser, gets by with a exec. team of about 15. Ten Times the size, by revenue.

[Glasnost]

All chicken feed compared to the ROI a private company would want on top of that with more than a few six figure executives on the payroll as well.

Private companies are only efficient because they are motivated by profit. This means less services to the customer unless there is independent oversight and setting prices to whatever they have the guts to ask unless there is competition.

Competition is inefficient in this area because it would result in duplicated infrastructures that the public would still have to pay for one way or another. Oversight would be another government organization with its same associated costs and inefficiencies so you might as well make it a 100% government organization anyways.

Private companies should not be getting rich off of public dollars to provide an essential service, period.

[Rockie]

Except for Mr. Richmond and his Nine -- count em' 9 -- six figure paid VP's for a modest airport on the world scale.

I don't care, it's the big picture I'm looking at. If it takes 9 six figure VP's to run a publicly owned non-profit airport I'm all for it. Way better than the alternative.

[complexintentions]

I don't care, it's the big picture I'm looking at. If it takes 9 six figure VP's to run a publicly owned non-profit airport I'm all for it. Way better than the alternative.

Why things will never improve. Canadians are complacent. As long as there's room on the credit card for those Mexico vacation tickets, who cares about accountability? Complain about taxes, but take it up the rear cargo door as long as it sorta seems affordable.

I just bought a regular fare ticket, the taxes/fees were just over 40% on top of the base fare. Incredible. Well, at least we can see why. Those juicy salaries gotta get paid somehow. "All in favour of a salary increase, say aye!" Wow - it passed.

The question is, how do I get in on that kind of action?

[Rookie50]

All chicken feed compared to the ROI a private company would want on top of that with more than a few six figure executives on the payroll as well.

Private companies are only efficient because they are motivated by profit. This means less services to the customer unless there is independent oversight and setting prices to whatever they have the guts to ask unless there is competition.

Competition is inefficient in this area because it would result in duplicated infrastructures that the public would still have to pay for one way or another. Oversight would be another government organization with its same associated costs and inefficiencies so you might as well make it a 100% government organization anyways.

Private companies should not be getting rich off of public dollars to provide an essential service, period.

There is competition. Bellingham, Seattle, Buffalo.

I have zero problem with taking my business to the U.S. Air Canada takes their maintenance business away from Canada, why should I do any differently?

What Hyprocrites, AC. They will tell people, fly Canadian, as will the airports, but they take their own dollars offshore.

[Rockie]

Why things will never improve. Canadians are complacent.

If there were an emoji thing depicting somebody playing an old worn out violin this is where it belongs. Socialism horrible bad blah blah blah.....

How would selling publicly owned infrastructure managed by non-profit organizations to for profit private corporations make airports better? What makes highway 407 better than any other highway other than it being quieter because few people want to pay to drive on a highway they've already paid for.

[timel]

There is competition. Bellingham, Seattle, Buffalo.

I have zero problem with taking my business to the U.S. Air Canada takes their maintenance business away from Canada, why should I do any differently?

What Hyprocrites, AC. They will tell people, fly Canadian, as will the airports, but they take their own dollars offshore.

US airlines also take their heavy maintenance offshore. It seems to have become to norm these days.

We can hardly compare to US airports, the privatization of our airport will only make airport taxes higher or lower the service we have today. Most people don't want to spend 4-5-6 hours on the roads and cross the border in order to save a few dollars on a 7 day vacation.

We would be speaking of competition if for example YUL was competing against YMX or YYZ against well.. lets say hypothetically YTZ.
The fact most of our airports don't have competition makes them an essential service, which should stay public.

[ahramin]

I wonder if anyone claiming that we would be better off with privatized airports would be willing to have their municipality sell me the public roads in exchange for a property tax break? Considering how much time we spend driving rather than flying you'd think they'd be concentrating on the roads near their houses.

[Rookie50]

The point is --

While the private sector is demonized in this country -- profit is evil in Canada, of course --

It's the public sector with the most outrageous examples of shoddy service, abuse and mismanagement.

I could name dozens of examples, I'll name one. Ontario power generation / Hydro One.

Look at what their people are paid, and the ongoing nightmare. Enough said.

[ahramin]

Actually, the point is that our airport infrastructure is completely unsuited to privatization.

[Rookie50]

Actually, the point is that our airport infrastructure is completely unsuited to privatization.

Great.

Who are they accountable to, then, for operating performance, salaries, anything?

Please don't say "the public". That means, "no one".

Let me give a more clear example.

Bombardier, being a political pet rock of both the Liberals, and Quebec, will never be allowed to fail. Never. What then, is the incentive of any of the executives there, to ever execute?

The sad thing is, most people think Bombardier IS a success.

Not in my world.

Ahramin, one small question -- you guys are in this industry -- what valid reason does YYZ have the highest landing fees in the world? (Please don't say rents)

[complexintentions]

Actually, the point is that our airport infrastructure is completely unsuited to privatization.

It does seem uniquely suited to corruption and lack of accountability to those it supposedly serves.

I do not believe socialism is inherently bad, Rockie. I am about as middle of the road as it gets - I despise extremism at both ends. Stick THAT in your worn-out violin cliche. I said Canadians are complacent - and you obliged with your comment nicely, stating you're quite happy to get bled like a pig by a bloated public entity. Somehow you twisted my objection to that into anti-socialism. We get it, that's your axe, grind away. But that debate is in another room. Surely even the thickest of the thick can realize that an article featuring the CEO's of companies that would stand to lose the most from privatization may be in conflict of interest?

I would be quite happy with the current system if it was run somewhat cost-effectively, but that would require a bit of integrity, I suppose. It's getting to be nearly impossible to find a public service that can resist sticking their nose in the trough. I'm quite aware that public-private partnerships have their own share of issues. But they certainly exist all over the world. Some are very successful, some are disasters. I'd just like to see an argument against privatization that was based on facts instead of emotion.

But I would hardly say the status quo is working, unless the goal is have the highest landing fees in the world like YYZ and ever-increasing airport fees to pay for Gucci facilities like YVR. If that's the case, carry on. I'll be down at SeaTac either way.

[complexintentions]

What are some other examples of public/private investments that can be referenced, certainly Canada isn't the first county to do this.

Here's some fun juxtaposition.

So, as all good Liberal voters know, privatization = bad. It will for sure lead to higher costs for consumers and reduced service. I mean, the CEO's of YVR and YOW wouldn't exaggerate to talk their book, would they?

Yet somehow, here's just one company that operates airports all over the world, including backwater places like Belfast and Stockholm, serving over 35 million passengers a year. It's too bad Ireland and Sweden aren't as smart as Canada, they could have like, jade statues and stuff if they were. Don't they know that airport infrastructure is "completely unsuitable for privatization"?

Airports Worldwide

Funniest part? This:

About Airports Worldwide
Airports Worldwide is a privately-held, multi-national company with a proven track record of successful investment in, development of and operation of world-class airports. Its operations span the globe, with headquarters in Houston and operations in the United States, the United Kingdom, the Netherlands, Sweden and Central America. It is majority-owned by Canada's OMERS pension plan, alongside co-shareholders and operating experts, HAS Development Corporation and Airport Development Corporation.

So, to recap: the Ontario municipal pension - an incredibly conservatively-managed fund - is the majority owner of a private company that successfully manages multiple airports around the world. But Ottawa (and Canada) should definitely run and hide from exploring the idea of privatization. You couldn't make this stuff up.

It's just too funny (or sad) how ideology has taken over from logic.

[Rookie50]

Complex,

The scary thing is they believe all the propaganda.

They believe governments create jobs, create wealth, economic growth.