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(Photo by Etienne Ranger)

A senior executive says a federal decision forcing airports to fully fund policing costs means airlines will face a 27-per-cent increase in security fees at the Ottawa Airport.

In addition to the $1.1 million escalation in security charges, the airport is increasing all other carrier fees by two per cent, effective Jan. 1, 2010. Despite these increases, officials say Ottawa's airline fees will remain among the lowest in Canada.

John Weerdenburg, the chief financial officer at the Ottawa International Airport Authority, says the federal government scrapped its Airport Policing Contribution Program, which applied to airports across the country, in this year's budget. The program helped offset costs of the increased policing and security mandated by the government in the aftermath of the 9-11 terrorist attacks.

"We still have the requirement to provide all the policing and security – which we do – (but) we now have to bear the full cost," says Mr. Weerdenburg.

Ottawa Police Service Staff-Sgt. Shaun Brabazon confirmed the airport authority pays the full cost of Ottawa police resources at the airport.

Mr. Weerdenburg says the airport pays the Ottawa Police Service approximately $2.5 million annually. The airport's total bill for policing and security, which also includes the cost of commissionaires and administration, runs between $5 million and $6 million each year, he adds.

In a "perverse" twist, the federal government will actually collect more money from the airport as a result of its decision to stop funding policing. That's because the added security fees charged to airlines is treated as additional revenue in calculations that determine how much rent the airport has to pay the federal government, explains Mr. Weerdenburg.

As a result, the airport must increase its security fees by $1.1 million to make up for the lost $1 million federal contribution.

Separately, the airport is also increasing all other fees it charges airlines by two per cent. These include charges such as landing fees and general terminal fees.

Mr. Weerdenburg says the airport has traditionally relied on growing passenger volumes to cover inflationary cost increases. The airport has seen strong and steady growth in the number of passengers flying in and out of the airport in recent years, including a 6.1 per cent increase in 2008. A record 4,339,225 passengers passed through Ottawa that year, well over a million more than a decade earlier.

Higher-than-expected passenger volumes allowed the airport to cut its terminal fees by five per cent during the summer of 2008.

However, the Ottawa airport has not been immune to the global economic slowdown and is experiencing a four to five-per-cent decrease compared to last year, prompting the general fee increase.

Officials at Air Canada and WestJet did not immediately respond to inquiries about the effect of the fee increases on their operations or whether it would mean higher fares or surcharges for passengers.

However, Mr. Weerdenburg says airport officials met with airline representatives last month to present the proposal and that it did not prompt "any reaction one way or the other." He says airport and navigation fees typically represent three per cent of an airline's total cost structure.

Using an average of airline charges, including landing, terminal, pre-clearance and security fees, across several types of aircrafts, Ottawa was the least-expensive Canadian airport for carriers in 2009, according to Mr. Weerdenburg.

Even with the fee increases that will take effect next year, Ottawa will still be "among the very lowest," he adds.