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As the air travel industry suffers massive losses in the face of the COVID-19 pandemic, Nav Canada announced a proposal on May 20 to increase fees by nearly 30 per cent, effective Sept. 1.
Included in the proposal — which faces a 60-day consultation period — are provisions designed to ease the impact of the fee increase on Nav Canada’s customers, according to the company.
In a statement, Nav Canada said the COVID-19 pandemic has “significantly reduced” the company’s liquidity, and that it has pursued all opportunities to reduce operating and capital spending costs.
“Nav Canada is proposing this rate action only after having actively pursued all available alternatives, including government assistance,” said Neil Wilson, president and CEO. “All available alternatives, including further government assistance, will continue to be explored and utilized in order to minimize or avoid the proposed rate increase.”
While the proposed fee increase is quite steep at 29.5 per cent, the company acknowledged that its customers are also in “exceptionally difficult circumstances” due to the economic fall-out of COVID-19. In order to offset the financial burden of increased fees on users of the national air navigation system, Nav Canada said that payment of the hiked fees for 2021 could be deferred over a five-year period.
In an interview with the Toronto Star, Wilson said that due to the sharp decrease in air travel, revenue during the pandemic is down roughly 75 per cent and is costing the company around $3 million a day.
While the company has looked to Ottawa’s wage subsidy program, which Wilson said has been helpful, further discussions with the federal government have offered no additional relief.
“We have exhausted all options, including all available government programs and all available alternatives,” Wilson told the Star.