Cross-border flights, reversed: With low loonie, more Americans flying out of Canadia
Thread Starter
Cross-border flights, reversed: With low loonie, more Americans flying out of Canadia
Good Afternoon All:
On a happier and more surprising note for Canadian Air Carriers taken from today's Financial Post.
Cross-border flights, reversed: With low loonie, more Americans flying out of Canadian airports | Financial Post
Kristine Owram | February 5, 2016 | Last Updated: Feb 6 12:26 PM ET
More from Kristine Owram | @KristineOwram
Many hands have been wrung in recent years about the millions of Canadians who choose to save money by flying out of U.S. border airports. Senate committees have been struck to examine the issue, while stakeholders point fingers at each other over who’s to blame. It turns out the solution was breathtakingly simple: a lower loonie.
Examination of passenger statistics indicates fewer Canadians are choosing to fly out of U.S. border airports as the weak dollar erodes their cost advantage. And anecdotal evidence from Canadian airports suggests the trend may be reversing, with more Americans coming north to take advantage of flights priced in Canadian dollars.
WestJet CEO Gregg Saretsky suggested this in the company’s earnings call this week, when he pointed out that Vancouver International Airport’s traffic increased five per cent in 2015, while Bellingham International Airport, across the border in Washington State, saw its traffic fall 14 per cent.
“There is less leakage, mostly a function of the bargains having gone away with the weakening of the Canadian dollar,” Saretsky said. “It’s great to see Canadians flying from home and WestJet is benefitting from that.”
Later in the call, chief financial officer Harry Taylor added that he’s been told “we have licence plates coming the other way now to fly out of Canadian airports, which is quite ironic.”
Data from the U.S. Bureau of Transportation Statistics shows that four out of five border airports popular with Canadians saw their passenger traffic decline in the first 10 months of 2015 (the latest time period for which numbers are available). The average exchange rate for the Canadian dollar was US78 cents in 2015, down from US91 cents in 2014.
At Bellingham, passenger traffic plunged 18.9 per cent in the first 10 months of 2015 compared to the same period in 2014. Other declines were more modest: two per cent at Buffalo Niagara International Airport in New York, 3.7 per cent at Burlington International Airport in Vermont and 3.5 per cent at Plattsburgh International Airport in New York (slogan: “Montreal’s U.S. airport”). The only border airport that bucked the trend was Niagara Falls International Airport in New York, which saw its traffic jump 17 per cent.
Although the airports don’t track the country of origin of their passengers, they do have other ways of measuring how many Canadians are using their services.
“We actually count licence plates in our parking lot,” said Nick Longo, director of planning and development at the Burlington airport. “We’ve seen anywhere from a 10 to 15 per cent drop in Canadian licence plates.”
Other border airports report similar findings.
“We track the customers that come through our various parking lots by asking them their postal code,” said C. Douglas Hartmayer, a spokesman for the Niagara Frontier Transportation Authority, which owns and operates both the Buffalo and Niagara Falls airports.
“For December, 37 per cent of people that parked in our long-term lot (in Buffalo) were from Canada. That number is usually in the low 40s, so we’ve seen a little bit of a shift, at least in that metric anyway.”
The appeal of U.S. border airports can mostly be attributed to their lower taxes and fees, which significantly reduce the cost of travel when the dollar is close to par.
In 2015, the World Economic Forum ranked Canada 124th out of 141 countries for its travel cost competitiveness, and a 2012 Senate committee was told that Toronto’s Pearson International Airport is the most expensive in the world at which to land a plane. The high costs are the result of a combination of ground rents paid to the federal government, Ontario’s rising jet-fuel taxes and security charges.
The cost advantage that U.S. airports offer shrinks along with the value of the Canadian dollar, although Hartmayer said it’s still cheaper to fly out of Buffalo or Niagara Falls, N.Y., than out of Pearson. Information provided by the Niagara Falls airport (slogan: “You can fly U.S.”) shows that, as of Dec. 23, a family of four flying roundtrip to Myrtle Beach, S.C., in July 2016 would save US$354.36 if they flew out of Niagara Falls instead of Pearson.
Those savings apparently haven’t stopped Americans from coming the other way, according to observations from Canadian airports.
“We do have U.S. vehicles coming up this way. It’s a good news story,” said Parm Sidhu, general manager of the Abbotsford International Airport near Vancouver. “We’re recording about 12 (U.S.) vehicles overnighting daily here.”
Daniel-Robert Gooch, president of the Canadian Airports Council, said he has been hearing the same thing from several of his members, although it may not be enough to compensate for the effects of a weakening Canadian economy.
“We have heard anecdotally that there may be greater numbers of Americans travelling north to Canada to fly out of Canadian airports, but probably not enough to offset the impact of the Canadian dollar and the souring of the economy that is hitting Canadians’ propensity to travel — particularly to the U.S.,” Gooch said.
http://wpmedia.business.financialpos...if?w=450&h=601
On a happier and more surprising note for Canadian Air Carriers taken from today's Financial Post.
Cross-border flights, reversed: With low loonie, more Americans flying out of Canadian airports | Financial Post
Kristine Owram | February 5, 2016 | Last Updated: Feb 6 12:26 PM ET
More from Kristine Owram | @KristineOwram
Many hands have been wrung in recent years about the millions of Canadians who choose to save money by flying out of U.S. border airports. Senate committees have been struck to examine the issue, while stakeholders point fingers at each other over who’s to blame. It turns out the solution was breathtakingly simple: a lower loonie.
Examination of passenger statistics indicates fewer Canadians are choosing to fly out of U.S. border airports as the weak dollar erodes their cost advantage. And anecdotal evidence from Canadian airports suggests the trend may be reversing, with more Americans coming north to take advantage of flights priced in Canadian dollars.
WestJet CEO Gregg Saretsky suggested this in the company’s earnings call this week, when he pointed out that Vancouver International Airport’s traffic increased five per cent in 2015, while Bellingham International Airport, across the border in Washington State, saw its traffic fall 14 per cent.
“There is less leakage, mostly a function of the bargains having gone away with the weakening of the Canadian dollar,” Saretsky said. “It’s great to see Canadians flying from home and WestJet is benefitting from that.”
Later in the call, chief financial officer Harry Taylor added that he’s been told “we have licence plates coming the other way now to fly out of Canadian airports, which is quite ironic.”
Data from the U.S. Bureau of Transportation Statistics shows that four out of five border airports popular with Canadians saw their passenger traffic decline in the first 10 months of 2015 (the latest time period for which numbers are available). The average exchange rate for the Canadian dollar was US78 cents in 2015, down from US91 cents in 2014.
At Bellingham, passenger traffic plunged 18.9 per cent in the first 10 months of 2015 compared to the same period in 2014. Other declines were more modest: two per cent at Buffalo Niagara International Airport in New York, 3.7 per cent at Burlington International Airport in Vermont and 3.5 per cent at Plattsburgh International Airport in New York (slogan: “Montreal’s U.S. airport”). The only border airport that bucked the trend was Niagara Falls International Airport in New York, which saw its traffic jump 17 per cent.
Although the airports don’t track the country of origin of their passengers, they do have other ways of measuring how many Canadians are using their services.
“We actually count licence plates in our parking lot,” said Nick Longo, director of planning and development at the Burlington airport. “We’ve seen anywhere from a 10 to 15 per cent drop in Canadian licence plates.”
Other border airports report similar findings.
“We track the customers that come through our various parking lots by asking them their postal code,” said C. Douglas Hartmayer, a spokesman for the Niagara Frontier Transportation Authority, which owns and operates both the Buffalo and Niagara Falls airports.
“For December, 37 per cent of people that parked in our long-term lot (in Buffalo) were from Canada. That number is usually in the low 40s, so we’ve seen a little bit of a shift, at least in that metric anyway.”
The appeal of U.S. border airports can mostly be attributed to their lower taxes and fees, which significantly reduce the cost of travel when the dollar is close to par.
In 2015, the World Economic Forum ranked Canada 124th out of 141 countries for its travel cost competitiveness, and a 2012 Senate committee was told that Toronto’s Pearson International Airport is the most expensive in the world at which to land a plane. The high costs are the result of a combination of ground rents paid to the federal government, Ontario’s rising jet-fuel taxes and security charges.
The cost advantage that U.S. airports offer shrinks along with the value of the Canadian dollar, although Hartmayer said it’s still cheaper to fly out of Buffalo or Niagara Falls, N.Y., than out of Pearson. Information provided by the Niagara Falls airport (slogan: “You can fly U.S.”) shows that, as of Dec. 23, a family of four flying roundtrip to Myrtle Beach, S.C., in July 2016 would save US$354.36 if they flew out of Niagara Falls instead of Pearson.
Those savings apparently haven’t stopped Americans from coming the other way, according to observations from Canadian airports.
“We do have U.S. vehicles coming up this way. It’s a good news story,” said Parm Sidhu, general manager of the Abbotsford International Airport near Vancouver. “We’re recording about 12 (U.S.) vehicles overnighting daily here.”
Daniel-Robert Gooch, president of the Canadian Airports Council, said he has been hearing the same thing from several of his members, although it may not be enough to compensate for the effects of a weakening Canadian economy.
“We have heard anecdotally that there may be greater numbers of Americans travelling north to Canada to fly out of Canadian airports, but probably not enough to offset the impact of the Canadian dollar and the souring of the economy that is hitting Canadians’ propensity to travel — particularly to the U.S.,” Gooch said.
http://wpmedia.business.financialpos...if?w=450&h=601
