The $2 billion expansion of the Calgary Airport, expected to start this spring, will open the region to tourists from more parts of the world than ever before.
Vice-President and Chief Commercial Officer for the Calgary International Airport Authority Stephan Poirier was in front of the most recent Bow Valley Builders and Developers Association luncheon to provide an overview of the facility’s future.
Poirier said the major expansion, which would double the airport’s size by 2015, is meant to bring the infrastructure up to speed so it can compete globally as a destination.
“We are building a new runway and a new terminal and that is a $2 billion injection into your airport,” he said, adding close to $150 million has been spent so far. “It means a lot to us and to you because it will provide more non-stop destinations.”
In 2009, the airport added KLM, giving it more European service than Vancouver, and last year saw Air Canada add five weekly non-stop flights to Tokyo. This year it is working on adding direct flights to Miami and Boston.
Even though both are good news for bringing in tourists to the region, including the Bow Valley, without the infrastructure improvements and especially the addition of the 14,000-foot long runway, further expansion into long-haul markets is not possible.
“For non-stop flights to Asia and the Middle East, the current runway is too short,” Poirier said. “The economic impact of this is huge.”
In addition to tourist numbers increasing for the region, it also represents the single biggest construction project in the history of Calgary.
In 2009, he said, total passenger activity reached 12.2 million or 33,000 passengers a day, which was a 2.7 per cent decline from the year before.
But in 2010 those number rose by 3.7 per cent for a total passenger count of 12.6 million or 33,500 per day.
Air carrier movements were also on the upswing in 2010 for a total of 173,000 movements, or in other words, landings and takeoffs, an increase of 3.5 per cent.
Poirier said at that amount the airport is already over capacity.
“It is unfortunate and that is the reason we need the runway… that is why we are building it,” he said, adding it is one of the few things Air Canada and WestJet agree on.
Dealing with an at capacity airport has been a long-term strategy. Poirier said in 1997 the organization purchased the Springbank airport and flight school to handle all slow approach aircraft landings to keep it separate from the larger commercial airliners.
The Calgary Airport Authority is a non-profit private corporation that manages a publicly-held asset. It leases the 5,000 acres of land it occupies from the federal government.
In 2010, it had total revenues of $261 million with total operating expenses of $95 million.
Poirier pointed out none of the revenues include government funding, even though the airport paid the federal government $25 million in rent for 2010 and $4.7 million in property taxes to the City of Calgary in 2009.
“We are outraged the federal government does this because we are non-profit,” he said. “If you don’t charge us for (rent) it will be reflected in operating costs and the travelling public will benefit.
“They don’t want to get rid of that revenue and we are fighting hard to eliminate that so we can decrease our fees.”
All net profits, he added, go towards airport expansion and improvements. Since 1992, the airport has spent $1.2 billion in leasehold improvements.
Poirier said the cost of operating per passenger for the Calgary airport is the lowest in the country and it gets top marks in international passenger satisfaction surveys.
As for the media storm surrounding Barlow Trail, he said the road is private and it is the property of the government of Canada and not the City of Calgary.
As part of the airport’s leasehold, Poirier said, in 2003 the City was informed the process of expansion and a new runway would be undertaken.
“It is under our lease and our control,” he said, adding the airport is willing to work with the City if it wants a tunnel.
However, he said, the challenge is not only integrating the two massive projects but the fact that the airport expansion is much farther along in terms of planning and implementation.
“The bigger problem is to integrate these two schedules together,” he said.
