The International Air Transport Association (IATA) called on the Canadian government to improve its global competitiveness in air transport, travel and tourism by working with industry to address issues of taxation and regulation, security and the environment.
“Air transport is key to Canada’s economy. Canada is a great place to visit and to do business, but the country is losing its competitive edge. Canada needs a comprehensive strategy to keep it competitive in the world market,” said Giovanni Bisignani, IATA’s Director General and CEO. Bisignani outlined short and long-term opportunities for Canada in a speech to the Montreal Council on Foreign Relations.
Bisignani noted that Canada fell from the eighth most visited country in the world in 2002 to the 15th in 2009. He cited the World Economic Forum’s Travel and Tourism Competitiveness report ranking of Canada at 106 in terms of cost competitiveness, behind Japan (86), the United Arab Emirates (50), India (46) and China (20).
“Aviation is the engine for tourism, which accounted for 650,000 Canadian jobs and $71 billion in spending in 2009. But instead of having policies to welcome more visitors, Canada’s excessive taxes turn them away. Compared to the United States, a visit to Canada is $160 more expensive,” said Bisignani.
Bisignani also took aim at Canada’s unique system of Crown rents as one of the root causes of weak cost competitiveness. “Canada has good airports, but the $257 million annual Crown rent bill is an unnecessary competitive disadvantage. No other country in the world has such a system. It discourages visitors and encourages Canadians to start their air travels from the United States. It’s time to abolish it,” said Bisignani.
The IATA executive also said that governments around the world are too involved in the industry and are preventing airlines from operating like other industries. “Airlines need the freedom to consolidate wherever it makes business sense. Airlines that facilitate globalization are stunted national businesses because of government protection. The industry is structurally sick and traditional leaders like Canada will be challenged to improve competitiveness with change and innovation,” Bisignani said.
“Too often governments try to live off past glory by protecting the status quo and avoiding change. The challenge for Canada and governments around the world is to improve competitiveness on a level playing field that allows airlines to compete profitably like any other business,” said Bisignani.
“Canada and other governments must also take a global approach to security. With today’s terror threat, we need to find bad people, not the bad objects that airport checkpoints were designed to detect. We need to deploy airport checkpoints that use intelligence from government and airline sources to match checks with a passenger’s risk level,” said Bisignani.
Bisignani also outlined a long-term vision using technology to allow passengers to be screened without time wasted in queues. “My vision is for hassle-free tunnels of technology. Passengers would identify themselves with their fingerprint, biometric passport and bar-coded boarding pass on a mobile device. After a risk-level assessment, most passengers would stroll through a tunnel of technology that checks for all forms of terrorist elements without unpacking or undressing. It’s in everybody’s interest to use the billions being spent on security to make it more effective and more efficient,”