The 2009 Canadian airport conference drew its best-ever attendance. Carroll McCormick and Jasmine Lacoste-McCormick report.
Under the subtitle ‘Leadership for Challenging Times’, the Airports Canada 2009 conference, organised by the Canadian Airports Council (CAC) and held April 28-30 in Gatineau, Quebec, drew over 260 delegates and a record 28 exhibitors. Six panels featured speakers from airport CEOs to architects and security specialists to discuss topics ranging from Canadian competitiveness, security challenges, passenger and freight facilitation and the future of aviation. Here is some of what was said.
Derek Burney, Senior Strategic Advisor, Ogilvy Renault, LLP, delivered the keynote address over supper the evening before the first full day of the conference. He touched on the relative effectiveness of institutions such as the United Nations, the North Atlantic Treaty Organisation and the G-20. His core theme was Canada’s relationship with the United States, and he detailed the challenges and finesse required to manage this relationship. He said Canada must be on guard against US protectionism in terms of the environment and border controls, stating: “Constantly changing and increasingly onerous procedures, inspection fees, more rigorous but often nonsensical differences and labeling requirements on health and product standards threaten to erode the benefits of free trade.” Nurturing a relationship with the Obama government is important, and Canada must maintain its role as instigator in reinvigorating its bilateral relationship with the US.
Barry Rempel, CAC Chairman and President and CEO of the Winnipeg Airports Authority, opened the first full day of the conference, introducing Perrin Beatty, the President and CEO of the Canadian Chamber of Commerce.
Beatty began by mentioning Canada’s relative strength as it enters the world-wide recession and the likelihood that it will emerge from it more quickly than many other countries. He spoke of the United States’ extraordinarily-huge debt and that China, the United States’ largest creditor, is very concerned about the safety of its assets.
Beatty discussed countries’ interdependence, made especially evident when the US subprime housing market debacle caused banks around the world to collapse and even led to the implosion of Iceland’s economy.
Building a skilled and competitive workforce, supporting education and science, developing wise ‘energy use’ policies and making sound infrastructure investments is important; transportation infrastructure is at a critical stage, with nearly 80% of it in Canada past its service life.
Beatty said that the Doha Development Round talks at the World Trade Organisation have been a failure and G-20 members are better at giving advice than taking it. The Washington Summit rejected protectionism, yet 17 G-20 member countries, among others, have implemented 47 trade restrictions since last November. Protectionism will make matters worse; eg, it contributed to a two-thirds drop in global trade between 1929 and 1934. Yet the US government is promoting it again.
Canada, Beatty admonished, has a chance to take a leadership role in restoring hope and opportunity.
In the first panel, CEOs spoke about leadership. Food and beverage operator SSP CEO Andrew Lynch spoke of the need to have a partner relationship rather than just a supplier relationship. When asked by panel moderator Allan Gregg, founder of Allan Gregg Strategies and founder and chairman of Harris/Decima, what decisions he has made that he regretted, Lynch replied that he regretted not doing things he should have done; eg, missing business opportunities. “Never say no in the first five minutes of the conversation.” Lynch advised. Lynch also commented that qualities – such as integrity, honesty and respectfulness – are better in a leader than charisma.
Greater Toronto Airports Authority (GTAA) president and CEO Lloyd McCoomb said that leaders must adapt during times of crisis; for example to champion global access.
InterVISTAS Consulting Group CEO Gerry Bruno said of people in leadership roles: “We need people that inspire our confidence.” In answer to the question of how leaders should deal with mistakes they make, he said: “’Fess up to it,” and take corrective action, no matter what.
The second panel was titled ‘Economic Outlook and Canadian Competitiveness in the World’. Tina Kremmidas, Chief Economist, Canadian Chamber of Commerce, launched into a review of the drop in several countries’ Gross Domestic Product (GDP), and estimated that the global economy is projected to contract 1.7% in 2009. East Asia will be hardest hit. There will be modest recovery in 2010. “Much hinges on how consumers behave,” Ms Kremmidas said. She also noted that the total stimulus injected in Canada is 3.2% of GDP and that it is vital to remove the stimulus out of the system by 2012 or face massive inflation. Kremmidas noted: “Recovery will not happen until the global financial system stabilises, and confidence is restored.”
Ms Kremmidas reviewed the crisis and the response to it within the US. She noted that the net worth of Canadian households declined 7.5% in the second half of 2008. The value of Canadian exports over imports had vanished by the end of 2008, Canadian business investments are down and housing starts will plummet this year. The GDP should recover 4% by the end of 2011. On the bright side, the Consumer Price Index will drop below zero this year and inflation could be less than 1%.
Catherine Harmel-Tourneur, director of the research, forecast and analysis company DKMA, noted that signs of the USA’s recession began as early as December 2007. To reduce costs, airlines will cut back on marginal flying; ie, axe routes with low strategic value and drop services to small airports. By June 2009, 4% of non-stop routes will be withdrawn. She predicted that there would not be a full air traffic recovery until 2011, though in aviation terms, Canada is expected to see the fastest growth of G-7 members. Africa and the Middle East have the largest growth potential but the smallest markets.
Bruce Okabe, Senior Vice President, Business Strategy, InterVISTAS, explained that economic contraction has a high impact on air travel; eg, a 2% contraction will reduce it by 4-9%. Notable Canadian statistics last year include over 100,000 fewer trans-border passengers in September and nearly 200,000 fewer domestic travellers in December, offset somewhat by 75,000 more overseas flyers that month.
Global carriers fell back into the red last year after their first profitable year (2007) since 2000, and will bleed red ink this year. Outbound air travel to the Middle East and Africa was up, but down to other global destinations; eg, down by 6.7% to Canada. This has resulted in a loss of airport revenues and staff. Vacations are becoming shorter in both duration and distance travelled.
Good news includes the 2010 Winter Olympic and Paralympic games being held in Vancouver and a prediction that 74% of Canadians intend to travel this year. Overall though, IATA forecasts a 3% decline in air travel in 2009. Mr Okabe recommended partnering with tourism and hotel marketing groups and forming an alliance with the Canadian Tourism Commission’s Welcome to Canada programme. He also recommended customising airports to make them more attractive to passengers from specific countries; eg, China and Great Britain. “Airports are the brand tourism in Canada – they’re the first thing you see coming in, and the last thing you see going out,” Okabe said.
Panel Three presented discussion of security challenges. Andy Blackwell, Head of Aviation Security, Virgin Atlantic Airways, discussed risk-based approaches to his task and the passenger perspective on the value of extra security: “It is a good thing provided it is proportionate, efficient, well-communicated and consistent.” Gilles Charette, Senior Director, Air Canada Security, raised the issue of whether passengers should pay the cost of policing airports instead of the facilities themselves.
Corporal Jacques Brunelle, Royal Canadian Mounted Police Airport Watch liaison reviewer, National Security Criminal Operations Branch, discussed the Canada Airport Watch Program. Initiated at Ottawa’s airport, it comprises groups of volunteers who, in addition to indulging their hobby of aircraft spotting, act as independent eyes for airports. By co-operating with airport authorities and, for example, reporting suspicious activities or vehicles, the presence of debris on runways, wildlife, problems with aircraft/landing systems and even cleaning up litter, they can enhance security and safety.
Toronto Pearson’s Airport Watch Program is about five years old. GTAA Public Safety Director Jim Bertram, who also spoke during panel three, told Airports International: “I thought it was a good idea. I feel personally that the extra eyes increase our level of security.”
The Airport Watch Program is currently active at five Canadian and one US airport, and will soon be extended to Vancouver and Seattle-Tacoma. The UK’s Gatwick and Heathrow have similar set-ups, and the Australian Federal Police is working on one at Sydney. The future of Airport Watch could include its expansion to all Class 1 airports.
‘Passenger and Freight Facilitation’ was the topic for the fourth and final panel of the first day. Joram Bobash, Executive VP, ICTS, discussed problems for pilots and the aviation sector in general in the European Union, because of its many countries and the variety of languages spoken. To make things less complicated, it has been necessary/is necessary to harmonise measurements by standard operational procedures, audits and training and by applying flexible solutions. Benefits of harmonisation include code sharing.
Keith Spinks, Secretary General, European Travel Retail Council, spoke of a proposed World Health Organisation ban on duty-free tobacco purchases and the possibility that within three years there will be no more tax-free sales. He warned that airports, airlines and retailers must lobby governments since they are not aware of the proposed ban.
Stanis Smith, Senior VP, Stantec, which provides design and consulting services, spoke about facilitated airport design for security, concessions, sustainability, inter-modality and inter-sector transfers. He also discussed facilitated way-finding and orientation, lighting and other aspects of airport design that enhance the passenger experience.
Panel Five, on the future of aviation in a changing world, launched day two of the conference. Jeffrey Shane, partner, Hogan & Hartson LLP, said that the US Government is not interested in foreign investment because it believes all airlines should stay American. However, he said, this sense of pride should not be hindering the chance of surviving the recession. Shane introduced a tool for testing new policies, called the: ‘reverse flip’. To take an old example, if an airline is wondering if it should ban smoking, it should pretend that smoking is already banned and then debate whether that ban should be removed.
The sixth and final panel tackled aviation and the environment. “Airports can, and do, manage their carbon footprints,” said Richard Paquette, President and CEO of the Victoria Airport Authority. Guylaine Roy, Associate Assistant Deputy Minister, Policy, Transport Canada, discussed aviation and climate change.
Roy briefly reviewed the Kyoto Protocol, global negotiations under way to establish a post-Kyoto regime and that the aviation and maritime sectors are under pressure to show results. He discussed emissions trading and key drivers of emissions reductions such as technological development and air traffic management improvements. In Canada air transportation accounts for 4% of greenhouse gas (GHG) emissions and Transport Canada has several initiatives ongoing to reduce GHG emissions, engage airports in reducing pollution and fund cleaner technologies. Anne McGinley of the ACI Liaison Bureau, continued the environmental theme with a discussion of several ACI initiatives, best practices, Sea-Tac’s environmental achievements and various awards.
Michelle de Leo, director, Flying Matters (FM), introduced the audience to this coalition of organisations that support sustainable growth in air transport. Established in May, 2007, FM uses the media to present balanced responses to anti-aviation press. Topics of concern to which FM has responded include aviation and climate change, sustained pressure on government aviation policies and the contribution of aviation to economic growth and social mobility. In one example of FM’s fight against anti-aviation activities, de Leo presented a celebrity flying watch campaign designed to highlight the “do as I say, not as I do” hypocrisy of jet-setting celebrities who oppose air travel.