Looking to the Future: Opportunities and Challenges for Atlantic Canada airports

1
(No Transcript)
2
Background

• 1994 National Airports Policy (NAP)
• Created National Airports System (NAS) Airports
• (26 Airports, 21 Airport Authorities)
• Launched program to transfer regional/local
  airports to regional/local interests (128 of 136
  transferred as of 2005)
• Designated 13 remote airports
• Key principles underpinning NAP
• Shift to greater market based orientation
• communities better placed to support and respond
  to the needs of their constituents
• - Recognition of need for matching local service
  levels to demand

3
Federal Role

• Under the NAP, the federal role is increasingly
  limited
• To ensure an appropriate policy framework
• e.g., new rent policy for NAS airports announced
  May 2005,
• e.g., international bilateral air agreements
• To monitor Airport Authority leases and
  performance to ensure the continued availability
  of NAS airports
• To continue divestiture of remaining few
  small/regional airports still under federal
  responsibility while maintaining core safety
  obligations
• To provide limited safety related support to
  small and regional airports not owned or operated
  by the federal Government for capital investments
  

4
Federal Assistance to Air Industry

• Airports Capital Assistance Program (ACAP)
• Assists eligible airports in financing capital
  projects related to safety, asset protection and
  operating cost reduction
• Available to airports with year round scheduled
  passenger services, certified, and not federally
  owned or operated
• From April 1995, when the program started, to
  the end of 2005 over 350M has been provided to
  150 airports (of which over 30M to 9 Atlantic
  airports)
• Labrador Coast Airstrips Restoration Program 5M
  (2003/4 to 2007/8) for restoration work at 13
  airstrips.
• Federal economic development departments (e.g.,
  Atlantic Canada Opportunities Agency) have
  assisted some airports with business plans,
  limited capital investments (total of 11.6M
  between 1996 and 2005)

5
Small Airport Viability F/P/T Task Force

• Mandate from 2004 Council of Ministers.
• Two streams of work undertaken simultaneously
• to assess the missions of airports and
• to identify options for future actions.
• Scope of work 362 airports (39 in Atlantic
  Canada) all certified airports plus NAP
  airports that changed status from certified to
  registered
• Key findings - The analysis shows that the key
  drivers of the financial state of small airports
  appear to be largely socio-economic
• Trends in population, income, industry within
  catchment area
• Competitive forces from improvements to the
  highway/road network and overlapping catchment
  areas

6
National trends in the air industry

• High and growing traffic volumes
• Competition on most routes
• Rightsizing aircraft to suit market and maximize
  revenues. Strong focus on cost management
  profits remain fragile
• How does Atlantic Canada compare to rest of
  Canada regarding these trends?

7
Air Activity in Atlantic Canada a Dynamic
Environment

• Over the period 1992-2004
• The 7 NAS Airports in Atlantic Canada experienced
  passenger growth of 25 - somewhat lower than the
  national average which was 41
• Atlantic NAS airports invested 212M in new
  capital
• Traffic at small and regional airports in
  Atlantic Canada declined by 21, a rate that
  exceeded the national average which showed a 10
  decline

8
Air Activity in Atlantic Canada (contd)

• Substantial carrier reconfiguration
• Canadian Airlines acquired by Air Canada
  (2000/2001)
• emergence of Canjet as a low cost airline based
  in Atlantic Canada (Halifax)
• rise of WestJet throughout Canada (Atlantic
  expansion includes Charlottetown, Halifax,
  Moncton, St. Johns)
• transfer of most North America/Regional
  operations from Air Canada to Jazz
• Some communities are taking the initiative to
  attract or maintain air services e.g., Delta
  service to Fredericton, second Jazz frequency at
  Bathurst, WestJet service at Charlottetown

9
Challenges Looking Forward

• Success of most NAS airports partly at expense of
  non NAS airports
• Highway access influences
• Attraction of low cost carriers
• Halifax pre-clearance facility will further
  enhance attractiveness of this hub
• Passenger traffic declines reflect population
  shifts

Carriers choice of airports driven by
commercial considerations
10
Challenges looking forward (contd)

• Concentration of airports with commercial
  services in a relatively small catchment area.
  Related to this infrastructure appropriate to
  airport operations
• Success of community initiatives is mixed.
• The underlying facts affecting air travel choices
  mean that there are no quick fix solutions re
  smaller airports

11
So where do we go from here?

• F/P/T Task Force work ongoing next steps
  include small airports workshop to explore best
  practices and options going forward
• Gateway concept an opportunity for the region
  to think strategically about its future (re
  trade links and people flows)
• An integrated approach
• Where does air fit into this concept?
• A practical approach that balances investment
  with policy and cooperation

12

• Thank you.
• Brigita Gravitis-Beck
• Director General Air Policy
• Transport Canada
• Tel [phone]
• gravitb_at_tc.gc.ca