Monopoly Shouldn't Make Millions from Floatplane Passengers

British Columbia's floatplane industry is one of the most competitive, entrepreneurial businesses in this province.

We compete with each other to offer the best prices possible and we don't seek taxpayer subsidies to run our business. The result is a service that minimizes unnecessary overhead, ensuring affordable airfares for more than 300,000 British Columbians who fly floatplanes every year.

But that highly successful model is under siege in Vancouver Harbour. PAVCO, the government agency that runs the Vancouver Convention Centre, has awarded the rights to Vancouver's new floatplane terminal to a private consortium known as the Vancouver Harbour Flight Centre.

Built by Graham Clarke, former chair at the Vancouver International Airport Authority, and the construction giant Ledcor, this $22-million terminal seeks to make a profit off the flying public. It intends to begin charging airport fees that will add up to millions of dollars annually leaving the pockets of the public and going to a private developer.

To some degree, this standoff in the harbour has seemed like a quibble over whether the VHFC is going to charge $24-per-head to each passenger going in or out of Vancouver Harbour (as we believe the charges are) or perhaps $9.50 one-way (as the VHFC is suggesting) to the public.

New fees set far too high

However, there is a bigger principle at stake here. We are seeing a government agency hand a monopoly to a private developer. And that developer is setting passenger fees that the floatplane industry believes are much higher than they should be.

It's a great business model for the VHFC and its private shareholders. With more than 300,000 passengers flying in and out of Vancouver Harbour every year, we estimate the revenue stream will be somewhere between $3-million to $4-million annually.

This is the highest passenger fee ever charged in the history of the B.C. floatplane industry. In fact, it's a radical departure for our industry, which has traditionally kept airport costs rock bottom by operating such passenger terminals on a not-for-profit basis.

It's not only floatplane users who stand to be charged for this terminal, either. Taxpayers will be paying for the new floatplane terminal, too, whether they fly or not. That's because the developers who have built the $22-million facility are expecting more than $3 million in taxpayer subsidies from PAVCO in the form of rent rebates and rent deferrals.

If they don't get those public subsidies, the VHFC plans to pass on that business cost to passengers, too. That means the VHFC passenger fees could soar even higher.

Poor take-off for Convention Centre terminal

What it boils down to is this: PAVCO, an agency supposedly working in the interest of the taxpayer and the floatplane industry, has struck a deal allowing a private developer to extract millions of dollars in airport fees from the travelling public.

Given that the floatplane industry wants to keep the price of tickets low, it's no wonder the VHFC has been unable to attract the major floatplane operators to their facility.

When their Convention Centre floatplane terminal opens later this month, it will actually have only two operators, both of which are just now starting up a Vancouver Harbour service. The airlines that now transport more than 95 per cent of the 300,000 people who fly in and out of Vancouver Harbour each year aren't moving in to the new terminal.

Why don't we move in? First, we don't believe a $24 or higher airport fee is justifiable or necessary. We also don't like handing a private developer the power to increase those fees with each passing year for services we have traditionally delivered at a much lower, or even zero cost to our customers.

A non-profit terminal instead

We believe there is a simple way to avoid these hefty and unnecessary passenger fee hikes.

Floatplane operators have proposed to the provincial government and PAVCO that we establish a not-for-profit floatplane terminal in the harbour, either at the Convention Centre or east of Canada Place, which we believe is a preferable location. That not-for-profit-model would eliminate the need for exorbitant and unnecessary airport fees, keep costs down to help our tourism industry and passengers who shouldn't be forced to send their money to an unnecessary monopoly.