Canada's air navigation services provider, NAV Canada, said it will reduce the weight factor used in calculating its terminal services charge from 0.9 to 0.85 beginning May 1.Although the change is revenue neutral for the ANSP, the charge for heavier aircraft will decline while smaller aircraft experience an increase. NAV Canada noted that its terminal fee for larger aircraft currently is among the highest charged by any ANSP while the charge for smaller aircraft is among the lowest. The result of the change "will be a more equitable balance...and a methodology more in line with international practice."

The industry impact will be that the cost of operating some domestic and transborder flights will rise while intercontinental airlines pay less. A second reduction in the weight factor will occur Sept. 1, 2008, when it will fall to 0.8.

Under the new fee schedule, the terminal charge for a 747-400 will decline 8.4% from C$3,627 ($3,165.42) to C$3,323, while cost per passenger per flight will drop from C$12.12 to C$11.10. Rates will decrease on a sliding scale down to about 70 tonnes. An A320 will see an average decline of 0.5% from C$821 today to C$817, while the terminal charge for a 737-700 will be the same as under the old system. The charge for a CRJ200 will climb 5.6% to C$296 from C$280, an increase of C42 cents on a per-passenger basis.

NAV Canada also announced an increase in the target balance of its Rate Stabilization Account--effectively a rainy day fund--from C$50 million to C$75 million. Once the target balance has been reached, it then will be set at 7.5% of total annual expenses excluding one-time nonrecurring items. The account will be built up through operating results, "rather than through any increase in charges."