Nav Canada To Reduce Service Charges by Almost 8% Starting September

The air traffic control responsible for charging airlines for taking off, landing and using Canadian air space will from September charge airlines less for the services they offer them. This will in effect save airlines close to $100 million in the upcoming year.

Nav Canada said it will reduce the charges on services by an average of 7.6% effective on September 1^st 2016, in a press release on Monday. Nav Canada is a non-profit organization responsible for coordinating the movement of over 12 million planes that land or take off in Canada, it was founded 20 years ago. It is also responsible or the aircraft that pass through Canadian airspace.

Generally, the fees that Nav Canada charges for its services is dependent on the weight of the plane and the distance traveled. According to a calculator on Nav Canada’s website, an aircraft of the size of an Airbus A320, fully loaded with passengers and traveling from Toronto to Vancouver will have to pay a fee of $1,764.15.

The money received will be used to pay for services like air control, flight information, weather briefings and other in-flight communication between the cockpit and the ground.

As Nav Canada is a not for profit making organization, it is urged to only charge enough to pay for its costs and also maintain a level of safety and efficiency in its operations. The organization has recently reduced the fees it charges its customers due to efficiencies.

“Strong traffic growth, coupled with cost controls and targeted strategic investments in the air navigation system, have put us in a position to deliver savings to customers while increasing our planned investments in people, technology, and facilities,” CEO Neil Wilson said.

“These changes enable us to meet our cost recovery mandate by aligning our revenues with our costs going forward.”

After years of charging high fees, Nav Canada has significantly cut down on its fee structure three times since 2006.

Air Canada shares increased by 16 cents to move to $9.64 in early Trading Monday. WestJet stock gained 32 cents to $22.87.