| Code: 133562 |

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Nav Canada, a company that owns and operates the country’s civil air navigation system, has proposed to reduce service charges by an average of 3.9% compared to existing base rates.

The proposal effectively continues a temporary rate reduction implemented last year.

However, rates will be further decreased by an across-the-board, one-time refund totalling around $60m.

Nav Canada president and CEO Neil Wilson said: “Service charges were set to rise on 1 September when an existing temporary one-year rate reduction expired, which would have increased costs for customers.

“Not only does this rate proposal supersede that increase, it also returns $60m to our customers.”

"Traffic growth over the past year has been higher than expected, considering the actual gross domestic product (GDP) growth rates of major world economies."

The changes proposed by Nav Canada are a result of the strong passenger traffic records in the current fiscal year and expected growth for the fiscal year 2018.

If implemented, this would be the second year in a row to see a reduction in base service rates.

Wilson further added: “Traffic growth over the past year has been higher than expected, considering the actual gross domestic product (GDP) growth rates of major world economies.

“This growth has been driven primarily by the expansion of low-cost carrier operations, particularly on the North Atlantic.”

The proposed rate changes comprise three elements, including a base rate reduction of 3.5%, a temporary one-year decrease of 0.4% that would return nearly $5.7m to customers, and a 4.6% one-time refund that would return approximately $60m to customers.

Both the reduced base rate and the temporary reduction will be effective from 1 September, while the reduction in general aviation charges would be implemented on 1 March next year.

 

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