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Establishing an appropriate landing fee schedule at Vancouver International Airport Shanks, Andrew David

Abstract

The last twenty years has seen a tremendous increase in aviation activity within Canada. Air links have been established and improved and safety standards upgraded to the point where the air can now be regarded as the optimum environment in which to travel. Because of its tremendous popularity, flying has also placed demands on the public purse. Every year more money is allocated to the aviation sector. Until recently, this outflow of funds continued virtually unchecked. With an increasing awareness of ecological balance and the impending depletion of non-renewable resources, public opinion has begun to question the viability of increased aviation investment. In consideration of these factors, this work has investigated the economic theory upon which rational pricing is based. Given the current level of investment, the first chapter examines the relationship between the present level of demand for aviation services, and the appropriate level of price to be assessed against this demand. Demand is also used to formulate a decision framework for future investment in airports. Succeeding chapters introduce research conducted in the United States which attempts to relate the economic theory presented above to a practical pricing schedule. The final chapter incorporates all of the work described above. Using the Airborne Instrument Laboratory, Airport Capacity Handbook, the practical capacity of Vancouver International Airport (movements per hour) is calculated. Consideration is given to prevailing weather patterns as well as the configuration and characteristics of the runways to arrive at the annual capacity of the airport. This capacity figure is then used to determine how appropriate the current levels of landing fees are at Vancouver International Airport. Ratios of processing time are determined for Air Carrier and General Aviation aircraft. These ratios, which reflect the time required for an aircraft of one class to land relative to the time required for an aircraft of the other class to land, are calculated for various mixes of the aircraft population. Using these ratios and weighting them with the frequency with which each ratio could be expected to occur, a schedule of opportunity cost (General Aviation - Air Carrier) is prepared. By applying the latter schedule to the current level of landing fees, an alternate schedule of landing fees at Vancouver International Airport has been calculated. By observing how the level of charges at Vancouver International Airport has been, to some degree, responsible for the pattern of investment there, it is evident that considerable improvement in the allocation of resources can be effected by revising this schedule. Application of the resultant fee schedule will not guarantee an improvement in the economy but utilization of the principles inherent in its derivation, will certainly clarify the direction change must take.

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