Overview of the New Service Charge Adjustments
In a notable decision shared from Ottawa, ON, on December 19, 2024, NAV CANADA revealed its intention to modify customer service charges. This move aligns with the notification issued on September 20, 2024, and will come into effect on January 1, 2025.
Background and Context
The modifications stem from an initial service charge reduction introduced on January 1, 2024. NAV CANADA executed an average net charge decrease of 5.57%, featuring a Base Rate cut averaging 9.33% and a new Temporary Rate averaging 3.76%. This adjustment was planned to address the Rate Stabilization Account (RSA) shortfall over five years. However, unforeseen circumstances in the aviation industry compelled the organization to revise their air traffic forecasts downwards. Consequently, the projected budget growth for fiscal 2025 — driven by necessary investments in operational training and staffing — is expected to surpass revenue from air traffic volume.
Details of the Revised Charges
The new service charges will integrate two components:
- Base Rate Adjustment: This targets recovery of NAV CANADA’s anticipated fiscal 2025 costs, which is tempered by a part of the RSA surplus from fiscal 2024.
- Temporary Rate Decrease: Averaging a decrease of 26.73%, this rate is aimed at reducing the RSA shortfall amount to be recovered in fiscal 2025.
Overall, service charges will experience an average net increase of 3.73%, which includes a Base Rate rise of 4.99%. The specific rate adjustments vary according to service categories, driven by the deviations in revenue generation from predicted levels following the higher-than-anticipated RSA recovery in fiscal 2024.
Stakeholder Engagement and Feedback
The proposal for revising charges was disseminated on September 20, 2024, after which NAV CANADA allocated a sixty-day period to acquire feedback from users. In response to the feedback, opportunities to enhance engagement activities with stakeholders have been recognized, aiming to foster improved dialogue regarding NAV CANADA’s strategies, benefits, and cost structures.
About NAV CANADA
Established in 1996, NAV CANADA is a private, not-for-profit entity entrusted with overseeing air traffic control, airport advisory services, weather briefings, and aeronautical information services over more than 18 million square kilometers of Canadian domestic and international airspace. The organization is esteemed globally for its remarkable safety record and technological advancements.
For more information on the revised service charges, interested parties can refer to NAV CANADA’s official documents available in both English and French.
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