High taxes and lack of competition make air travel for Canadians far more expensive than it should be.
Now, at last, people in the Ottawa area are about to get a huge break. Starting in early October, the cost of air travel to Florida will be slashed by more than half in some cases.
That is, for people in the Ottawa region who hop across the border to catch a flight from Ogdensburg in New York state. Ogdensburg is about a one-hour drive from Ottawa, just across the bridge over the St. Lawrence River at Prescott.
OBJ360 (Sponsored)
Investing in the next generation: Ottawa businesses encouraged to build futures through mentorship
Do you remember the mentor in your life who helped shape your career? In the business world, success often depends on the connections we build, fuelled by guidance and support
How the uOttawa faculty of engineering instills an ‘entrepreneurial mindset’ in students
A decade ago, Terrafixing chief operating officer Vida Gabriel was a chemistry-loving student in high school with little to no interest in business or entrepreneurship. “I didn’t like the sales
With the Canadian dollar languishing way below the value of the American greenback, I would not have believed it possible for Canadians to enjoy such savings.
Allegiant Air, a leading U.S. discount airline, will initially offer four non-stop flights a week from Ogdensburg to Florida. There will be two weekly flights each to Fort Lauderdale and Orlando, using a 177-seat Airbus A320 jetliner.
The cost of these flights is eye-popping. To start with, at least, an adult round-trip fare from Ogdensburg to Fort Lauderdale or Orlando will be the equivalent of about $153 in Canadian funds, all taxes and fees included.
You have to be extremely careful when comparing airfares. It’s not just the exchange rate on the Canadian dollar that must be factored in. There are all the taxes and surcharges levied by federal and lower governments, plus any hidden fees imposed by the airlines themselves.
I compared bottom-line fares for travel to Fort Lauderdale in mid-November, looking at what Air Canada would charge from Ottawa and what Allegiant Air would charge from Ogdensburg.
To get the lowest possible fare on Air Canada required a connection in Toronto. To get a quote from Allegiant Air, I had to extend my proposed one-week trip by a day, since the U.S. carrier operates only twice a week between Ogdensburg and Fort Lauderdale.
First, the bottom lines. Allegiant Air’s total fare was $114 in U.S. funds. Air Canada’s total fare was $387.49 in Canadian funds.
When I did my comparison, it required about $1.34 in Canadian funds to buy an American dollar. If you think that’s high, remember the money-changer always charges a fee in addition to the actual exchange rate. By multiplying Allegiant’s posted fare of $114 U.S by 1.34, I arrive at a cost in Canadian dollars of about $153.
On the face of it, I could save more than $200 in Canadian funds by making the trip to Ogdensburg to catch a flight to Fort Lauderdale or Orlando. But there you have to factor in the extra time it takes to get there and the fuel costs of that one-hour drive. There are two-way bridge tolls totalling about $7. And there is parking at Ogdensburg airport, which used to be free but which now costs $8 a day in U.S. funds.
Parking fees at the Ottawa airport are similar to those in Ogdensburg, but maybe you can get a relative or friend to drive you to and from the airport.
Why is air travel in the U.S. so much cheaper than in Canada? It’s not as if Americans don’t pay fees and taxes for air travel. More than half of Allegiant Air’s fare of $114 U.S. is “taxes, carrier charges and government fees.” That leaves $55.62 for the airline. But presumably some or all of those “carrier charges” also go to the airline’s bottom line.
It’s also unclear just how much of Air Canada’s fare goes to the airline and how much goes to taxes, airport fees, et cetera. The airline breaks down the Ottawa-Fort Lauderdale ticket price like this: air transportation charges are $246; taxes, fees and other charges are $141.49.
Tellingly, Allegiant Air now refers to the Ogdensburg airport as the Ogdensburg and Ottawa airport. The municipality of Ogdensburg is aggressively promoting its new Florida jet service to Ottawans.
I see two possible future scenarios: either the Canadian airline industry becomes a lot more competitive in the Ottawa market. Or Ottawans flock to Ogdensburg for flights to Florida, prompting more U.S. carriers to service this remote corner of New York state.
Remote, that is, unless you live in or near Ottawa.
