Airports around the world may be struggling with the impact of the recession and a fall in demand for flights, but this isn’t a problem for Edmonton International Airport (EIA), which is in the happy position of serving a booming economy.
This prosperity is based largely on the energy industry, in particular the huge oil sands deposits that make Canada’s Alberta province the world’s largest oil reserve after Saudi Arabia and Venezuela.
These riches benefit the airport in three ways: links with the international centres of the oil industry are essential; people need to travel on small aircraft to remote destinations where oil exploitation occurs; and the people who work in this industry are wealthy enough to afford vacation flights, mainly to the Caribbean and Florida.
As flights are dropped elsewhere, they are being added at EIA, which is undergoing an extensive C$1 billion expansion programme to attract more carriers (see box opposite).
Peter McCart, EIA’s vice president for strategy and development, explains: “Economic growth is driven by the energy sector. The oil sands region has really powered up.
“They need to get a lot of people to remote regions and they almost all connect through Edmonton. People are coming to Edmonton for jobs, and they are good paying ones.”
This results in a lot of high yield charter flights carrying some one million people a year from fixed base operations in their own holding area and departure lounge.
“Over the last seven years we have added 25 destinations, which I think is pretty impressive for any airport.
“Las Vegas is strong, as are Mexico and the Caribbean, and many people in Canada have bought property there and in places like Palm Springs.”
McCart has also strengthened his network team with the appointment in September of Todd Doherty as a route development director to work with Carol Hutchins to develop air service from Europe and the Americas.
EIA wants to add more destinations and McCart says it helps airlines by doing all it can to remove risk from their decisions.
“I spent 18 years in the airline industry before switching to work in airports and I know that airlines hate to take risks, so we provide information and intelligence to the airlines to mitigate risk,” he says.
“For the market intelligence side, we subscribe to the aviation planning database Diio. We also collect travel demand information directly from our business community to identify high yield travel patterns and trends of growing corporate travel.
“Additionally, for new routes, we offer traditional incentives that are usually a combination of waiving fees and marketing support, and in some cases when it is a key target destination we may work with the carrier to develop a customised scheme that shares the risk.”
New York is the destination McCart would most like to add, as “it is such a great jumping off point for flights to Europe and Africa and is our largest unserved market”.
Air Canada serves London Heathrow from EIA and McCart also wants direct flights to Frankfurt or Amsterdam to better link with the European market.
His other big objective may be less easy to realise. Oil gives Edmonton strong business links with the Middle East, but existing service limits restrict new route launches. “Etihad and Emirates – I would love to have them,” he says.
EIA must go up against Toronto to do this. Under the terms of the Canada-UAE air transport agreement, UAE airlines may operate to any city in Canada, but are limited to six flights a week, all of which Emirates and Etihad Airways currently operate from Toronto.
Unfortunately for EIA, negotiations between the UAE and the Canadian government to up the limit broke down last summer and according to Transport Canada there are “no plans to resume air negotiations at present”.
But, elsewhere, EIA has seen a number of successes, with United announcing it would add another daily Boeing 373 flight to Houston, Texas, the birthplace of the US oil industry, supplementing its existing daily service. Continental had already increased capacity on this route by upgrading to a B737-800.
“We are pleased to be able to increase flights between Edmonton and our Houston hub,” said Jim Ferea, managing director of domestic planning for United.
“In addition to increasing schedule options for business travellers between these two major oil-industry centres, these new flights will decrease travel times for Edmontonians while opening up one-stop services to 11 new destinations in Mexico and Central America through Houston, including Cozumel, Mexico and Roatan, Honduras. The new flights are booking well, with Liberia, Costa Rica and Belize as popular international destinations as well as the major Florida destinations.”
Westjet, an important user of EIA with 44 daily flights, will “continue to look for opportunities to expand service there”, but has no specific plans, a spokesman says.
He adds: “Our more moderate growth plan for 2012 is a combination of many factors, including the global economic outlook, but also a desire to ‘digest’ some of the explosive growth the company has experienced in recent years.”
Westjet added a winter seasonal flight to Orlando and Montego Bay this year and increased its service to Maui, while Sunwing Vacations added Montego Bay, Huatulco, Los Cabos and Mazatlán.
Air Transat serves holiday destinations in the Caribbean and Central America from EIA and will offer a weekly flight to London in the summer.
EIA is also a significant cargo base and expects this to increase with the proposed development of Port Alberta, a hub for air, rail and road cargo, for which some 81 hectares adjacent to the runway is reserved.
At present some 37.5 tons of cargo is processed annually at EIA, with 95% carried on passenger aircraft, and air cargo volumes are expected to increase 4.6% year-on-year.
The Alberta government believes the oil sands have 400 years of capacity, which should provide plenty of time to secure the long-term fortunes of EIA.
This article features in Routes News 2012 Issue 1
