cair issue no. 30 - june 2005

InterVISTAS’CANADIAN AVIATIONINTELLIGENCE REPORT

In this issue…

Feature Columns: Regular Reports:• SCoT Interim Report (p.1) • Airport & Airline Data (p.4)• Crude Oil Prices (p.3) • Industry News (p.8)• Airport Terminal Planning (p.15) • Airport Best Practices (p.19)• Cargo Capers (p.17) • The Ottawa Report (p.21)• Tourism & the End to World Poverty (p.20) • Washington Report (p.22)

• InterVISTAS’ News (p.23)

InterVISTAS’ Canadian Aviation Intelligence ReportJune 2005 Copyright ©2005 InterVISTAS Consulting Inc., all rights reserved.Page 1

Josh Drury

Transportation Specialist

THE STANDING COMMITTEE’SINTERIM REPORTJune 2005

In May, the House of Commons Standing Committee on Transportation (SCoT) released its report, AirLiberalisation and the Canadian Airports System. The report followed a series of hearings acrossCanada on both airport issues and issues regarding liberalising commercial aviation policies. Thereport is only an interim report, as the Committee has indicated a need for further study andconsultation prior to finalising recommendations on certain issues. However, the Committee’s viewson airports and charges for security and customs were quite well defined.

• Airport Rent. SCoT recommends that the federal government immediately reduce airport rentsby at least 75% and for airports with less than 2 million passengers no rent be paid. This goesbeyond the rent relief announced earlier in the month by Minister of Transport in terms of themagnitude of the reduction, although the Minister should be credited with having made a largefirst step toward the SCoT recommendations. SCoT’s recommended relief is more extensive andimmediate, and limits rent payments to a smaller set of airports.

• SCoT goes on to recommend that airport rental revenues received by Transport Canada be usedto increase funding for the Airport Capital Assistance Program (ACAP), that the funding belong term and stable and that the process for applying for this program be simplified and madeless costly. While ACAP is a useful program, SCoT said it is too limited in scope and funding tofully meet the needs of Canada’s airports. Expanded, stable funding through airport rents asrecommended would address this issue.

• Security Charges. SCoT recommended that the government eliminate the Air TransportSecurity Charge (ATSC). SCoT correctly noted that the ATSC is unique in levying security feeson air transport users (unlike other modes), and that aviation security is a national security issue,not a transportation issue, and thus should be paid for from general revenues.

• Customs Services. SCoT recommended that the government pay for CBSA services at airportsthat can demonstrate that they have regular transborder and/or international services. SCoTnoted that the current system is applied in an inequitable and arbitrary manner, since someairports pay for Customs services while others have services fully funded by the government.This recommendation would have funding applied in a uniform and fair manner.

• Regulatory Burden. SCoT recommended that the government ensure that where regulations onsmall and regional airports result in a significant increase in costs to these airports, such costs beborne by the government. These additional recommendations (particularly those requiringfirefighting and emergency response services) have in many cases greatly increased costs atsmaller airports, and have represented a threat to their long-term viability.

• Government exemptions. SCoT also recommended that within 5 years, governmentdepartments and agencies should pay for all services they receive from airport authorities. Undercurrent rules, many receive services such as office and other space at no charge, representinglost revenue to authorities.


THE STANDING COMMITTEE’SINTERIM REPORT – CON’TAir Policy Liberalisation. After SCoT had started its work on airport issues, the Minister ofTransport asked the Committee to address a set of questions regarding the desirability and extent ofliberalising Canadian international air transport policy. SCoT received numerous submissions whichit discussed in the interim report, but indicated it was not yet in a position to make specificrecommendations. SCoT noted that “we must now seek input from stakeholders in other countries astheir actions have a critical impact on Canada’s aviation policies”. Following such consultation,recommendations can be expected to follow in the final report. Some of the observations made in thereport include:

• Liberal Bilaterals. With respect to bilateral agreements outside of the U.S., many stakeholders –particularly airports – felt that bilaterals should be much less restrictive. A few stakeholdersfavoured a more cautious approach. However, SCoT noted that “it would seem fair to say thatthe status quo is not serving the needs of the travelling public and the present agreements aretoo restrictive in nature.” This suggests that the recommendations on international bilaterals inthe final report may be supportive of further liberalisation.

• Canada-U.S. Open Skies. The 1995 Canada-U.S. transborder agreement falls short of true‘open skies’ and many submissions noted Canada should be moving towards this. Manystakeholders called for the expansion of the agreement to include fifth freedom rights, and someadvocated a more extensively liberalised agreement to create a single aviation market, along thelines of that existing in the EU.

• Cargo. Special rights for cargo were also discussed in a Canada-U.S. context. A central issuewas that of co-terminalisation. If this were allowed, U.S. carriers would be allowed to carry cargoto multiple Canadian stops on the same flight (though not to carry Canadian cargo between thesepoints). Some stakeholders have expressed concern that this could result in loss of jobs andrevenue by Canadian carriers that currently distribute U.S. cargo beyond gateways; however,while there might be changes in certain areas, others noted that the overall impact on Canadiancarriers and airports would likely be small. SCoT acknowledged that the concept seemsattractive from the perspective of airports and shippers, but indicated the need for more study onthe impact on carriers, and perspective from the U.S. on the issue, before making arecommendation.

• Right of establishment was the final major international issue discussed in the report.Establishment, as it is being considered, would allow U.S. carriers (or other investors) to set updomestic Canadian subsidiaries and vice versa for Canadian carriers. While many stronglysupport such an initiative, the concept is being met with mixed views in Canada, as somestakeholders fear U.S. carriers would cherry-pick main markets and threaten the viability ofCanadian carriers. Unlike other international issues where the interim report hints at supportingliberalisation, there is no indication as to what the recommendation on this issue will be. SCoTnotes only that “the Committee is of the view that it requires more information on this subject andintends to examine the experience in other countries before making a recommendation.”

The timing of the final report is difficult to predict. The committee has not yet scheduled its nextphase of investigation, and parliament seems focused on other issues at the present.


Doris Mak

Senior Project Manager

CRUDE OIL PRICES SURGE HIGHER15 June 2005

Continued high crude oil prices of $55 in June 2005…

After hitting a record high of US$57 per barrel, crude oil prices then cooled to below US$50 in Maybefore surging to US$55 in June. It does not appear that the sustained upward trend in prices willsoften in the near future. Futures contracts for December 2011 are priced at $54.70 today, the sameprice level for near term deliveries. The indication is that crude oil prices will continue at these highlevels for the foreseeable future. Concerns over refining capacity and OPEC are contributing to thecontinued high prices.

Lack of Refining Capacity. Recently, there have been concerns over the lack of refining capacityavailable to handle the increased global demand for distillate fuels such as diesel, heating oil and jetfuel. The strong demand for diesel fuel is increasing in China, Europe and the U.S.

OPEC. Today, OPEC raised its quotas for oil production by 500,000 barrels per day; however, thequota increase is not expected to cool high prices as several OPEC countries are already operating atnear maximum capacity. Iran, OPEC’s second largest oil producer, indicated that they are currentlyoperating very close to capacity and that in 2006, they will have no spare capacity available. OPEC’srecent actions have not significantly impacted global crude oil price levels.

…. The level of futures prices continue upward

Futures prices have continued to climb through the first half of 2005, as displayed in the graph below.The price of a barrel of crude oil contracted in the current month for delivery in January 2006 isUS$58. Contract prices for delivery in future years are above the US$55 level.

Impact on the Airline Industry. The International Air Transport Association (IATA) estimates thatthe global airline industry will lose up to US$6 billion in 2005. Fuel costs were cited as the mainreason for airline woes. The loss estimate is based on an average price of US$47 per barrel. RobertMilton, CEO of ACE Aviation, stated that for each dollar per barrel increase, the company’s costswould rise US$28 million per year. Many airlines are attempting to reduce non-fuel costs as a meansto cope with increasing fuel prices.

Crude Oil Spot & Futures Prices

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

$55.00

$60.00

Jan-03

Apr-0

3Jul

-03Oct-0

3Jan

-04Ap

r-04 Jul-04

Oct-04

Jan-05

Apr-05 Jul

-05Oct-0

5Jan

-06Ap

r-06

Jul-06

Oct-06

Jan-07

Apr-07 Jul

-07Oct-0

7Jan

-08Ap

r-08

Jul-08

Oct-08

Month of Delivery

US

$ P

er B

arre

l

May 2003 August 2003 December 2003 April 2004 June 2004

January 2005

September 2004

FuturesPrices - - - - - Spot

PricesFebruary 2005

April 2005

June 2005


-15%-10%-5%0%5%

10%15%

May-04

Jun July Aug Sep Oct Nov Dec Jan-05

Feb Mar Apr May

Dom RPK Dom ASK

Air Canada Domestic Mainline Air Canada Domestic Mainline

Jazz data is not includedin this graph

AIRLINE DATA – CANADATraffic and Load Factors on Canada’s Major Air CarriersMay 2005

Passenger TrafficRevenue Passenger Kilometres

CapacityAvailable Seat Kilometres Load Factor

Air Carrier % Changeover 2004

% Changefrom 2003

% Changeover 2004

% Changefrom 2003

Changeover 2004

Changefrom 2003

Air Canada1 +6.7% +33.7% +4.7% +19.8% +1.4 pts(to 79.9%)

+8.3 pts(71.6%)

Domestic(Mainline)

+4.1% +16.8% +1.7% -0.3% +1.9 pts +12.0 pts

Jazz +32.1% +38.1% +12.4% +14.9% +10.9 pts +12.2 pts

International& Charter

+7.8% +42.9% +6.1% +31.4% +1.2 pts +6.4 pts

WestJet +32.2% +56.3% +21.8% +59.8% +5.5 pts(to 70.6%)

-1.6pts(72.2%)

Analysis:

• Air Canada and WestJet continue to poststrong domestic traffic gains, in part as a resultof Jetsgo ceasing operations in March 2005.

• Air Canada reported its fourteenth consecutivemonth of record system and domestic loadfactors in May 2005 as the growth in thecarrier’s traffic outpaced the addition ofcapacity.

• U.S. transborder traffic increased by over 11%during the month. International traffic wasstrong for Air Canada during May 2005compared to the same time period in both 2004and 2003, reflecting the continued strength indemand for international travel. The stronggrowth relative to 2003 is attributable to therecovery from SARS.

• Continuing an earlier trend, WestJet’s trafficgrowth continues to outpace the addition ofcapacity, resulting in an improved load factor.This is the sixth consecutive month in whichWestJet’s traffic growth outpaced capacitygrowth.

1 Air Canada Mainline consists of all Air Canada operations with the exception of Jazz.

OTHER CARRIERS:

LOAD FACTORS

CanJet: not reported

-10%

0%

10%

20%

30%

40%

May-04


Feb Mar Apr May

Int'l RPK Int'l ASK

Air Canada InternationalAir Canada International

0%

10%

20%

30%

40%

50%

60%

May-04


Feb Mar Apr May

RPK ASK

WestJetWestJet


AIRLINE DATA – U.S.U.S. Airlines Release May 2005 Traffic Figures

Traffic Data – May 2005

Airline Load FactorTraffic

(RPMs – millions)Capacity

(ASMs – millions)

78.1%

á5.0 pts

11,806

á10.0%

15,107

á3.0%

71.4%

á2.9 pts

701

á32.5%

984

á27.1%

65.8%

â4.3 pts

509

â49.8%

773

â46.5%

181.2%

á6.1 pts

3,360

á7.9%

4,137

â0.3%

76.3%

á2.5 pts

10,532

á9.4%

13,798

á5.7%

86.6%

á4.8 pts

1,704

á32.9%

1,968

á25.6%

83.6%

á2.9 pts

6,573

á6.3%

7,859

á2.5%

72.4%

â1.5 pts

5,241

á12.0%

7,244

á14.3%

281.8%

á1.7 pts

9,720

á0.9 %

11,876

â1.2%

275.9%

á0.4pts

3,527

á2.0%

4,650

á1.4%

Notes: 1. Mainline2. Load factor includes scheduled service only

Sources: Carrier traffic reports.

InterVISTAS’ Canadian Aviation Intelligence ReportJune 2005 Copyright ©2005 InterVISTAS Consulting Inc., all rights reserved.

Page 6

Toronto Vancouver Montréal-Trudeau

Calgary Edmonton Ottawa Winnipeg Halifax Victoria Kelowna Saskatoon Regina St.John’s

April +30.6% +20.5% +31.7% +11.5% +8.6% +20.8% +11.2% +16.9% +12.7% -0.3% +10.9% +2.6% +20.1%

May +30.8% +20.4% +26.3% +5.5% +7.5% +7.6% +9.0% +19.4% +8.0% -1.3% -0.3% -5.5% +15.2%

June +18.5% +16.1% +18.1% +8.0% +2.8% +12.1% +9.2% +7.8% +8.6% +3.0% +1.7% -4.3% +15.9%

2nd Quarter +26.2% +18.8% +24.9% +8.3% +6.2% +13.2% +9.7% +14.5% +9.7% +0.5% +3.8% -2.5% +16.9%

July +17.1% +10.4% +18.7% +5.0% +0.8% +5.7% +8.6% +10.5% +4.7% -0.5% +5.5% +1.4% +10.6%

August +16.0% +4.9% +18.1% +1.9% +2.2% +6.2% +7.4% +6.9% -2.0% -5.9% +5.4% +1.5% +10.1%

September +16.1% +11.5% +13.2% +13.0% +6.3% +7.9% +8.8% +8.6% +8.3% +12.1% +5.3% -0.6% +13.4%

3rd Quarter +16.4% +8.7% +16.7% +6.2% +2.9% +6.6% +8.2% +8.6% +3.3% +1.1% +5.4% +0.8% +11.2%

October +14.3% +7.0% +10.7% +10.7% -4.0% +11.9% +1.1% +3.7% -1.4% +9.1% +7.9% +1.9% +18.2%

November +13.3% +6.2% +17.6% +9.6 +4.7% +11.4% +4.4% +8.3% +0.3 +5.1% +8.0% -11.1% +9.9%

December +14.2% +6.8% +20.9% +8.9% +8.4% +11.0% +5.1% +8.0% +2.1% +3.9% +8.1% +3.6% +6.8%

4th Quarter +14.0% +6.7% +16.1% +9.7% +3.1% +11.4% +3.5% +6.4% +0.3% +5.9% +8.0% -2.1% +11.9%

2004

Full Year +15.7% +9.6% +18.6% +7.0% +5.1% +10.2% +7.7% +9.1% +5.7% +3.6% +5.6% +0.3% +14.0%

January +15.0% +9.8% +14.4% +13.2% +9.6% +12.9% +13.6% +6.6% +4.7% +12.4% +17.7% +9.7% +11.9%

February +8.7% +4.5% +4.0% +10.2% +7.8% +5.5% +7.0% +4.5% +7.1% +15.8% +10.4% +8.5% +1.5%

March +10.9% +8.2% +5.1% +17.5% +12.5% +7.3% +9.7% +6.6% +15.4% +19.5% +19.1% +22.2% +19.6%

2005

1st Quarter +11.5% +7.5% +7.6% +13.7% +10.0% +8.4% +10.0% +5.9% +9.3% +16.0% +15.6% +13.3% +11.5%

April +4.4% +3.9% +5.8% +3.5% +5.5% +0.1% +4.3% -0.2% +2.6% +18.8% +5.9% +3.8% +9.8%Source: Transport Canada and individual airports’ traffic reports.

If your airport is interested in providing InterVISTAS Consulting Inc. with its monthly passenger statistics, please email Doris Mak at [email protected]

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports

Expanded Origin & DestinationMarket Data for all Top Markets

Inbound & outbound travel agencydata is now available for Canadiandomestic and top international airmarkets.

InterVISTAS’ market data is supportedby a number of sources including IATAtravel agency ticket sales. Travelagency sales represent approximately80% scheduled international air ticketsissued worldwide. The databaseincludes more than 7 million air ticketsissued in Canada and several milliontickets destined to Canada annually.

Identify True Origin & DestinationFlows

• Quantify city-pair market sizes for airservice development initiatives

Analyse Hub Activity & Routings

• Identify key routing patterns to supportair service proposals

Understand Competition withinAirport Catchment Areas

• Quantify traffic leakage to determinetrue market sizes

For more information, contact:

Nancy KeenTel: 1-604-717-1822Email: [email protected]

Passenger Market Data for AirportsAccurate and Timely Marketing Data:A Key to Air Service Development

InterVISTAS Consulting,

in conjunction with the

International Air Transport

Association and other

suppliers, is offering a

unique, and newly enhanced

data product that provides

passenger market sizes,

travel routings and fare

profile data

for domestic, transborder and

international markets.

InterVISTAS Consulting Inc.550-1200 West 73rd Avenue,

Vancouver, BC, V6P 6G5Canada

Telephone: 1-604-717-1800Facsimile: 1-604-717-1818

E-mail: [email protected]

New!

New!


NEWS ARTICLESAIR CANADA UPDATEACE AVIATION PLANS TO INVEST INMERGED US AIRWAYS-AMERICA WESTENTITY

ACE AviationHoldings,

parent company of Air Canada, announced thatit plans to invest CDN$95 million forapproximately 7% in equity of the merged USAirways-America West entity. As part of theproposed investment, ACE has obtainedcommitments from the planned US Airways-America West merged entity for a five-yearmaintenance and ground-handling contractworth CDN$1.5 billion in revenue, through AirCanada Technical Services.

AIR CANADA RANKED BEST AIRLINE INNORTH AMERICA BY SKYTRAX IN 2005Air Canada has been ranked Best Airline inNorth America in a global passenger survey of12 million air travellers conducted by U.K. basedSkytrax. The annual survey was conductedbetween June 2004 and May 2005, andincluded 35 different measures of passengersatisfaction.

AIR CANADA TO INTRODUCETORONTO-SANTO DOMINGO SERVICESBeginning 3 November 2005, Air Canada willoperate three flights per week between Torontoand Santo Domingo using A319 aircraft.Including this new service, Air Canada will beoperating 21 flights per week to the DominicanRepublic.

AIR CANADA TO LAUNCH VANCOUVER-LAS VEGAS, CALGARY-LAS VEGASSERVICES, INCREASES MONTREAL-LASVEGAS FREQUENCYBeginning 30 October 2005, Air Canada willoperate non-stop Vancouver-Las Vegas andCalgary-Las Vegas services using 120-seatA319 aircraft. Air Canada will also increase itsMontreal-Las Vegas services from two times perweek to daily services effective 30 October2005.

AIR CANADA JAZZ BEGINS TO TAKEDELIVERY OF CRJ-705 AIRCRAFT

Air Canada Jazz has takendelivery of its first CRJ-705,and will be taking delivery of

three aircraft per month for a fleet total of 15 byDecember 2005.

AIR CANADA JAZZ INCREASESCALGARY-HOUSTON SERVICESEffective 1 July 2005, Air Canada Jazz willincrease services between Calgary and Houstonto three per day using CRJ-705 aircraft.

AIR CANADA JAZZ TO LAUNCHEDMONTON-REGINA, EDMONTON-SASKATOON SERVICESAir Canada Jazz will launch twice daily non-stop services between Edmonton-Regina andEdmonton-Saskatoon starting 1 August 2005.The service to Regina will be operated using 37-seat Dash 8-100 aircraft, while the service toSaskatoon will be operated using 50-seat Dash-8 aircraft.

AIR CANADA JAZZ LAUNCHES SERVICETO HAMILTON FROM MONTREAL ANDOTTAWAStarting 18 September 2005, Air Canada Jazzwill introduce non-stop Hamilton-Montreal andHamilton-Ottawa services, four and three timesdaily respectively. The services will be operatedwith 50-seat Canadair Regional Jet aircraft.

AIR CANADA INCREASES TORONTO-SHANGHAI CARGO SERVICES, LINKSCALGARY TO CHINA SERVICE

Air Canada plansto increase itscargo flights

between Toronto and Shanghai from three perweek to five times weekly using a MD-11freighter wet-leased from World Airways. Fourof the weekly flights will operate via Calgary,linking Alberta to the Chinese cargo market.The expansion is subject to Air Canadareceiving the necessary approvals fromTransport Canada.


NEWS ARTICLESAIR CANADA UPDATE – CON’T

AIR CANADA CANCELS B777/B787ORDER FOLLOWING PILOT’S VOTEAir Canada has cancelled the Boeing orderannounced on 25 April, after being informed bythe Air Canada Pilots Association (ACPA) thatthe union membership has rejected the tentativeagreement on costs and working conditionsrelated to the order. The order with Boeing hadincluded firm orders for 18 B777s, includingpurchase rights for 18 more, along with firmorders for 14 B787 Dreamliners.

AIR CANADA INCREASES DOMESTICFARES DUE TO HIGH FUEL PRICESAir Canada is adjusting all domestic fares dueto high fuel prices. Fares for short-hauldomestic flights (up to 483 km) will be increasedby CDN$8, while fares for domestic medium-haul (484-1609 km) and long-haul flights (over1609 km) will be increased by CDN$10 andCDN$15 respectively. The increase is effectiveon all tickets issued starting 23 June 2005.

OTHER CANADIAN AIRLINENEWSWESTJET BOOSTS TORONTO-CALGARY, TORONTO-HALIFAX,HALIFAX-ST. JOHN’S AND CALGARY-LONDON SERVICES

Effective 14August 2005,WestJet will add

seven flights per week to its Toronto-Calgaryservices, for a total of 45 per week (includesreturn flights). From 6 September 2005, sevenflights per week will also be added to thecarrier’s Toronto-Halifax and Halifax-St. John’sservices, for a total of 21 and 14 flights per weekrespectively (includes return flights). Calgary-London services will be increased to three timesper week starting 31 October 2005.

WESTJET INCREASES SERVICESBETWEEN TORONTO AND ORLANDO,TAMPA AND FORT LAUDERDALE, ADDSCALGARY-ORLANDO FLIGHTSBeginning 6 September 2005, WestJet willincrease services between Toronto-Orlando andToronto-Fort Lauderdale to four per week andthree per week respectively. Services betweenToronto and Tampa will be increased to sevenper week (includes return flights). Effective 13October 2005, the carrier will double servicesbetween Calgary and Orlando, to two per week.

WESTJET WITHDRAWS WINDSORSERVICEWestJet announced that it will withdrawservices from Windsor, Ontario, effective 30October 2005. The carrier began services toWindsor in April 2003. The capacity fromWindsor will be redeployed to London, whereWestJet will increase Calgary-London services.

WESTJET LAUNCHES NEW SERVICESFROM LAS VEGAS TO TORONTO,KELOWNA, WINNIPEG, CALGARY ANDEDMONTONBeginning 8 September 2005, WestJet willintroduce new services between Toronto andLas Vegas. Services between Kelowna-LasVegas and Winnipeg-Las Vegas will belaunched starting 6 October 2005. In addition,Calgary-Las Vegas and Edmonton-Las Vegasservices will begin 3 November 2005. Allservices will be operated twice per week.

WESTJET EXPANDS SERVICES TOPHOENIX WITH FLIGHTS FROMTORONTO, WINNIPEG AND VANCOUVERWestJet will launch two times per week servicesbetween Toronto and Phoenix starting 5September 2005. In addition, Winnipeg-Phoenixservices will be launched once per weekbeginning 14 October 2005, while Vancouver-Phoenix services will be operated three timesper week (includes return flight) starting 15October 2005.


NEWS ARTICLESOTHER CANADIAN AIRLINENEWS – CON’T

WESTJET LAUNCHES FLIGHTSBETWEEN FORT LAUDERDALE ANDCALGARY, MONTREAL, BEGINSTORONTO-FORT MYERS, VANCOUVER-PALM SPRINGS, WINNIPEG-LOSANGELES SERVICES

Beginning 5September 2005,WestJet will

launch three flights per week between Montrealand Fort Lauderdale. From 6 September 2005,services between Toronto and Fort Myers will beoperated two times per week. Once per weekWinnipeg-Los Angeles services will be launchedfrom 12 October 2005. Flights between Calgaryand Fort Lauderdale will begin 14 October 2005,three times per week (includes return flight),while two times per week Vancouver-PalmSprings services will start 16 October 2005.

WESTJET TO MOVE TORONTOOPERATIONS TO TERMINAL 3Effective 22 June 2005, WestJet will move itsoperations at Toronto Pearson InternationalAirport from Terminal 2 to Terminal 3. WestJetstated that Terminal 3 is a lower cost terminalfrom which to operate, and also has more roomto accommodate the carrier’s growingoperations.

WESTJET COMPLETES INSTALLATIONOF LIVE IN-FLIGHT T.V. ON ALL B737-700 SERVICESWestJet has completed installation of livesatellite television services on its entire fleet of39 B737-700 aircraft in partnership with BellExpressVu and LiveTV. The service iscomplimentary and individually controlled byeach passenger.

WESTJET AND TRANSAT A.T. EXTENDCHARTER PARTNERSHIP

WestJet and Transat A.T. havereached a 30-month agreementthat allows Transat A.T.

subsidiaries Transat Holidays and World ofVacations to charter WestJet’s Boeing 737aircraft between Canada and internationaldestinations. The contract is in effect from 1May 2005 to 31 October 2007, with a value ofover CDN$80 million in the first winter season(mid-December-end of April).

WESTJET CONVERTS TWO B737-600PURCHASE OPTIONS INTO FIRMORDERSWestJet has converted purchase options fortwo B737-600 aircraft into firm orders fordelivery in August 2006. The carrier isscheduled to receive 10 B737-600s and oneB737-700 aircraft in 2006.

TRANSAT A.T. REPORTS CDN$38MILLION NET INCOME IN SECONDQUARTER 2005Transat A.T., parent company of Air Transatreported a net income of CDN$38 million in thesecond quarter of 2005, a decrease of 15% fromthe same period last year. The tour operatorattributed the lower net income to increasedcompetition in the Ontario market and higherfuel prices. The number of travellers bookingwith the operator increased by 9.6% during thequarter.

HARMONY ACQUIRES FOURTH B757-200, PLANS TO START CALGARY-HAWAII AND KELOWNA-HAWAIISERVICES

Harmony Airways hasacquired its fourth B757-200 aircraft and plans to

expand services to Hawaii. This will include twoflights per week between Calgary and Honolulu,and once per week between Calgary and Maui.Service between Kelowna and Honolulu will alsobe launched once per week. Exact start datesto be announced later.


NEWS ARTICLESOTHER CANADIAN AIRLINENEWS – CON’T

HARMONY AIRWAYS RECEIVESDESIGNATION FOR CHINA SERVICES

Harmony Airways hasreceived designation from

Transport Canada to operate scheduled airservices between Canada and China. Allowabledestinations include Beijing, Shanghai,Huangzhou, Xian, Chengdu, Kunming, Qingdao,Chongqing, Harbin and Dalian. Harmony is innegotiations to acquire long range aircraft forservice to China in 2006, but has not yetannounced which destinations it will serve.

CANADIAN AIRPORTSRESURFACING OF SECONDARYRUNWAY AT EDMONTONINTERNATIONAL AIRPORT

From 13 June to 25 July 2005, aresurfacing of the secondaryrunway will take place at

Edmonton International Airport. TheCDN$2.6 million project is not expected tocause any carrier delays. The airport’s mainrunway will remain fully operational.

OTHERSTANTEC ARCHITECTURE RECEIVESAANB LIEUTENANT GOVERNOR’SAWARD OF EXCELLENCE INARCHITECTURE FOR MONCTONINTERNATIONAL AIRPORT TERMINALDESIGNVancouver based StantecArchitecture has beenawarded the AANBLieutenant Governor’sAward of Excellence in Architecture for theirdesign of the Moncton International AirportTerminal. Stantec has completed over 30airport terminal design projects to date.

ELECTRONIC TICKETING SAVES US$9.Ralph Thompson, Director ofInfrastructure Strategy at IATA,indicated that electronic

ticketing saves US$9 per passenger. Mr.Thompson was speaking at the joint conferenceof ICAO/World Bank/ATAG in Montreal on 7June 2005.

EU PROPOSES TICKET TAXThe European Commission isconsidering adding a tax to airline

tickets to pay for humanitarian aid. Currentplans for the tax call for it to be non-mandatory.The Association of European Airlines opposesthe plan.

U.S. AND MEXICO CONSIDERS ADDINGCANCUN TO U.S. AIR PRE-CLEARANCE

PROGRAMThe U.S. and Mexicoare considering

adding Cancun International Airport to theU.S. Air Pre-Clearance program. The programallows immigration, customs, and agriculturechecks for all passengers on direct flights to theU.S. to be completed at approved airports byU.S. officers, saving time at destination airports.


NEWS ARTICLESCANADIAN NEWSCANADIAN PASSENGER LISTS COULDBE REQUIRED FOR U.S. FLY-THROUGHS

A U.S. proposal hasbeen put forward

that would require Canadian airlines flyingthrough, but not landing in, U.S. airspace tosubmit passenger lists. The passenger listswould be checked against the no-fly listsdeveloped after the September 11 attacks onthe United States. Currently, passenger lists areonly required for flights landing on U.S. soil.Canadian airlines often use shorter routings thatcross U.S. airspace when flying between twoCanadian cities, a tactic that saves fuel andshortens flight time. Seventy-five percent ofCanadian flights entering U.S. airspace eachyear are for domestic travel. Canada’s industrystakeholders are not keen on the proposalbecoming law, citing concerns on guarding thecountry’s sovereignty and increased wait timesat airports.

PEOPLETransport Minister JeanC. Lapierre proposed

the appointment of David Gardiner as chair ofthe board of directors of the Pacific PilotageAuthority.

Eleanor Humphries hasbeen named President ofthe Halifax InternationalAirport Authority. She hadpreviously been Presidentand CEO of Credit UnionAtlantic for the past fiveyears and was honoured among the Top 50CEOs in Atlantic Canada on three occasions.

Air Canada has announced the followingexecutive appointments:

Rob Reid, former Senior VicePresident, Operations, isappointed Executive VicePresident and COO of AirCanada with responsibility forFlight Operations, Flight

Safety, System Operations Control, andCustomer Service Strategy and Delivery.Chantal Baril, formerGeneral Manager ofAirport Operations –Eastern Canada, has beenappointed to President andCEO of Air CanadaGround Handling Services.

Sean Menke, former SeniorVice President and COO ofFrontier Airlines, has beenappointed Executive VicePresident and ChiefCommercial Officer.

Joshua Koshy, formerSenior Vice President ofInformation Technology atEmirates Group, joins AirCanada as the airline'sExecutive Vice Presidentand CFO.David Tait, former VicePresident of Virgin Atlantic’s North Americanoperations, has been appointed to Senior VicePresident, Customer Service.


NEWS ARTICLESPEOPLE – CON’T

Transport Minister Jean C.Lapierre announced theappointment of General Joseph

Maurice Gérard Baril as chair of the board ofdirectors of the Canadian Air Transport SecurityAuthority (CATSA). General Baril retired fromthe Canadian Forces in 2001 and has sinceserved as special advisor to the Ambassador forMine Action of the Department of ForeignAffairs, and inspector general in the Departmentof Peacekeeping Operations at the UnitedNations Secretariat.

Richard Smithies, Director ofPolicy Analysis at IATA,announced his retirement after

42 years service in the Aviation Industry. Manyin Canada will remember his stint as Economistat ICAO in Montreal as well as his time in TheEconomist Intelligence Unit. Richard will beretiring to Vancouver and will be succeeded atIATA by Simon Ralph.

Robert Barron, formerly vice president ofmaintenance and engineering, has beenappointed Vice President and COO of KittyHawk Aircargo Inc.

CARGOKITTY HAWK REPORTSGREATER Q1 LOSS OVER 2004

Kitty Hawk Cargo reporteda net loss of C$2.1 millionfor the first quarter of 2005.

The carrier reported that soft demand, causedby poor economic conditions among domesticmanufacturing sectors and a shift to lessexpensive transport modes due to higher fuelprices, widened its loss from C$1.8 million in Q12004. Scheduled freight revenue was down1.1% to $32.8 million. Yields were up 5.9% fromthe previous year, but chargeable weight carrieddropped 6.6%.

AIR FRANCE CONVERTS B747SWHILE IT WAITING FOR B777FS

Air France will convertthree Boeing 747-400passenger aircraft from its

fleet into freighters as part of the B747-400Special Freighter (SF) programme offered byBoeing. The Air France B747-400s, which werepreviously in combi configuration, will have acapacity of 110 tonnes or 30 main-deck cargopalletts, and will be able to seat up to 19 people,a new option offered by Boeing. The firstconversion will be delivered in June 2007 andwill accelerate the phasing out of the airline’sB747-200 freighters in preparation for the arrivalof the B777 freighter in fall 2008.

DHL U.S. REPORTS LOSS WHILEDEUTSCHE POST SEES PROFITDeutsche Post reported a 2004 profit of €1.6billion, up 21.3% from 2003, on revenues of€43.2 billon. Its U.S. operations, however,reported a loss of US$623 million on revenuesof US$5.4 billion. John Mullen, joint CEO ofDHL Express, said the company does not planto pursue more market share until its hubnetwork is complete in 18-24 months. So far,DHL Express in the U.S. has opened seven newhubs, has 1.3 million customers, handles 389million shipments per year and has investedUS$1.2 billion.


NEWS ARTICLESCARGO – CON’TAIR CANADA TO FOCUS ONINTERNATIONAL CARGO EXPANSION

In a recent interview, ClaudeMorin, President and CEO ofAir Canada Cargo, said thatthe business unit’s focus is onexpanding its internationalcargo services and that it willnot return to the domestic all-

freighter market. While the airline will continueto offer bellyspace on its passenger flights itrecently started leasing a 727F from Cargojet,which has taken over the overnight cargomarket in Canada. Air Canada Cargo currentlyhas all-freighter service to Shanghai andFrankfurt and is looking at 15-20 otherdestinations, including Guangzhou, Tianjin,Hong Kong, Taipei, Japan, and Korea in Asia;Brazil, Santiago, Lima and Mexico in LatinAmerica; and Milan, Spain and the U.K. inEurope. The airline’s cargo business unit islooking to acquire more freighters, particularlythe MD-11F.

CARGOJET RECEIVES AWARDFOR EXCELLENCE

Cargojet was the recipient ofthe Air Cargo WorldExcellence Award for

achieving superior ratings from customers infour key areas of measurement: CustomerService, Performance, Value Added Servicesand Information Technology. The airline alsoachieved its highest on-time performance levelsin May 2005 of over 99.1%. Cargojet providesovernight air cargo service with 727-200 aircraftto 13 major city centres across Canada.

WORLD AIRWAYS, AIR CANADA SIGNMULTI-YEAR ACMI AGREEMENT

World Airways willoperate two MD-11Faircraft for Air Canada

from Toronto to points in China and NorthAmerica through August 2007. The first of theall-cargo flights began in May 2005 to Shanghai,operating five times per week, with intermediateservice to Calgary on four of those flights. Thesecond flight will start in June.


Marcel Champagne

Senior Planner

AIRPORT TERMINAL PLANNINGIN A NEW ENVIRONMENTPLANNING FOR THE PASSENGER PROCESSJune 2005

Considerable work has been done over the past few years to improve passenger processes and flowsto render existing facilities and services more efficient and user-friendly. However, many airportscontinue to struggle with frequent bottlenecks at key processing points. In part, this is a result of thenever ending introduction of new pre-board screening or border entry measures. With passengertraffic finally surpassing pre-9/11 levels, passenger terminal congestion will increasingly impactpassenger service levels and create new demand for facility reconfiguration and/or expansionprojects. This will ultimately require airport operators to revisit recently completed projects andexisting development plans – sometimes requiring relatively costly capital projects.

Passenger Processing ImprovementsAll is not gloomy though. Recent technological advancements have provided cost-efficient platformsto improve the efficiency and security of individual passenger processes. Major initiatives that haveemerged in these areas include:

• The expanded availability of check-in kiosks andrecent increased promotion of web-based check-inby air carriers to minimise passenger handlingcosts.

• The implementation of such programs asCANPASS, INSPASS and NEXUS AIR by Canadianand U.S. border agencies to expedite theprocessing of pre-approved low-risk travellers.

• The testing of a Registered Traveller program in theU.S. by Transportation Security Administration(TSA) to facilitate the screening of known low-risktravellers. (A similar program has been underconsideration in Canada by CATSA.)

From a technological standpoint, the increasing use ofthese passenger processing technologies is contributing to greatly improving passenger flows at aircarrier check-in counters and is facilitating the movement of those travellers that are participating inexpedited border crossing and other registered traveller programs. Technological integration betweenprograms still remains a challenge however and, as a result, these programs still have not reachedtheir full potential in terms of ultimately enabling a seamless passenger process.

Automated processes such askiosk check-in is greatly improvingpassenger flows and reducingqueue lengths in certain areas ofthe air terminal building.


AIRPORT TERMINAL PLANNINGIN A NEW ENVIRONMENT – CON’TMoving Beyond ‘One Size Fits All’ StandardsFrom a facility standpoint, much work remains to be done to fully incorporate the spatial requirementsthese initiatives create within existing terminals or intofuture facility designs. The 2004 IATA AirportDevelopment Reference Manual (ADRM) takes a step inthis direction by establishing updated recommendationsfor air terminal facility development, notably incorporatinga section on hold baggage screening systems. However,in an era when passenger processing is becomingincreasingly layered and based on risk managementmeasures, the ‘one size fits all’ approach to air terminaldevelopment is now difficult to adopt. While installation ofcheck-in kiosks are relatively easy to undertake at mostairports due to the smaller footprint involved, retrofittingexisting pre-board screening checkpoints to potentiallyaccommodate expedited screening lines or queuing areasfor registered travellers will be more difficult.

Differentiating Passenger Flows

The new technologies and risk-based passenger processing measures ultimately differentiatebetween various categories of travellers – those that travel frequently, those that travel occasionallybut are familiar with the passenger process, and those that travel infrequently and are unfamiliar withthe processing requirements. As a result, air terminal buildings will increasingly need to account forthe different processing requirements and flows these diverging groups of travellers generate.

Existing planning standards and guidelines typically provide a basis for facility reconfiguration andexpansion projects. However, consideration must now also be given at early stages of the planningprocess to the characteristics of the travellers the projects intend to serve. This not only involvesunderstanding current passenger facilitation and security processes but also recognising that theseprocesses may change over the life-cycle of the facility. Keeping well informed of the trends that areshaping passenger processing and related technological advances in this area will help understandhow these will influence future facility requirements.

While planning for the unknown may prove to be a challenge, adopting a planning approach thatexpects changes to occur will be key in delivering facilities that are both flexible and cost-effective forairport operators and their stakeholders.

Retrofitting existing passengerprocessing spaces based onexisting facility standardscontinues to pose challenges interms of efficient passenger flowsand queuing spaces.


Robert Andriulaitis

Director, Transportation& Logistics Studies

CARGO CAPERS08 June 2005

Air Cargo Gateways to NAFTA. Oneof the key strengths of Canadian airports is theirlocation just to the north of the world’s largesteconomy. This advantage may not be so obviouswhen looking at the traditional Mercator map weare all familiar with, but our advantage really standsout when looking at an Azimuthal Equidistantprojection centred on the North Pole.

This style of map (or a globe) shows that trafficflowing along two of the world’s largest tradecorridors (EU-U.S. and Asia-U.S.) could be servedusing Canadian airports as gateways to/from theNAFTA marketplace. Benefits include increasedaircraft utilisation (by getting goods off aircraft andreloading them with additional revenue traffic sooner), increased payloads (the shorter flights requireless of a fuel/payload trade-off), and lower distribution costs (by minimising use of expensive aircraftand maximising use of inexpensive truck transport). Indeed, Canadian airports recognise thisadvantage – it has been a theme adopted by Canadian airports at the last TIACA International AirCargo Forum and Exposition under an initiative co-sponsored by the airports and the Department ofForeign Affairs and International Trade.

A Growing Threat to Canadian AirportGateways: Surface Border Congestion.The ability of Canadian airports to serve as effectivegateways between Eurasia and the U.S., however, isbeing undermined by growing congestion on the roads –particularly at border crossings between Canada and theU.S. The Ontario Chamber of Commerce recentlyreleased a study that estimates the cost of border delaysto the U.S. economy.1 The cost is staggering: US$4.13billion a year, or to put it in terms that might be easier tograsp, US$471,461 an hour! The impact on Ontario isalso massive. A study released by the same group backin May 2004 estimated the cost to Ontario as CDN$5.25billion per year.2

1Cost of Border Delays to the United States Economy, prepared by the Ontario Chamber of Commerce Bordersand Trade Development Committee, April 2005. A copy of the study is available on-line at:http://www.occ.on.ca/2policysubmissions/Microsoft%20Word%20-%20Cost%20of%20Border%20Delays%20to%20US%20Economy_04.2005(1).pdf2 Cost of Border Delays to Ontario, prepared by the Ontario Chamber of Commerce Borders and TradeDevelopment Committee, May 2004. A copy of the study is also available on-line at:http://www.occ.on.ca/2policysubmissions/OCC%20Borders%20Cost%20Study%20(ONTARIO).pdf


CARGO CAPERS – CON’TThis is not a new issue. While security concerns following the September 11, 2001 terrorist attackshave certainly exacerbated border delays, congestion was a concern even before then. Thecontinuing growth in Canada-U.S. trade, cross-border investment, and integration of manufacturing onboth sides of the border following the FTA and later NAFTA means that traffic is going to increase inthe future – unless congestion brings this flow to a grinding halt. Investment in infrastructure andtechnology certainly has been made, but efforts to date not only have failed to solve the problem, theyhave failed to stem the growth of the problem.

Public-Private Partnerships and Multimodal Approaches. Now while it maybe natural for airlines and airports to view trucks as competitors and problems, trucks are an integralpart of virtually all air cargo movements. If Canada’s airports are to maximise their potential andCanadian airlines grow beyond the scope of our relatively small market, they will have to rely onserving more than Canadian origin/destination traffic. Serving the U.S. marketplace will be key.Airports and airlines need to be participants in multimodal solutions to transportation impediments, bethey infrastructure, policy, or regulatory. Public-Private Partnerships such as the Gateway Councils incommunities such as Vancouver and Halifax are one means of working to resolve such issues.Whatever particular approach may work in your community, it is important for airports and airlines tobe ready, willing and able to work with federal, provincial and municipal governments, as well as theother modes of transport, to address impediments if they want to be players in the global airtransportation industry rather than be relegated to the minor leagues.


Rob Beynon

Director, Airport Marketing

AIRPORT BEST PRACTICES14 June 2005

New Kelowna P3 Aerospace Training FacilityCommon wisdom holds that airports cannot attract public-privatepartnership investment. Kelowna International Airport turned thiswisdom upside down when it secured a new aircraft maintenance andaerospace training facility and $3 million in federal and provincialfunding through a unique public-private partnership (P3) agreement.

Private Partners. While municipalities like to call joint municipal,provincial, federal initiatives P3s, this agreement has true privatesector investors. Private sector partners Kelowna FlightcraftInc. and WestJet supported the new facility and program withinvestments and in-kind contributions.

Public Education Partners. Public partners in the agreementinclude the BC Institute of Technology (BCIT) and SchoolDistrict #23 (Central Okanagan), who will provide training formaintenance of large Boeing aircraft, such as 757s, andultimately train certified Aircraft Maintenance Engineers (AMEs)at the new facility. The Kelowna program is unique in that highschool students can begin taking AME prerequisites in Kelowna area high schools.

Airport Initiative. The City of Kelowna and its airport staff led and co-ordinated the P3 initiative.Kelowna Airport Manager Roger Sellick noted that the program will train new AMEs for aerospace ata time when the Canadian industry is seeking trained personnel. A separate project undertaken bythe Okanagan Partnership, a government-business partnership, had identified aviation as aneconomic cluster that the Okanagan Valley should focus development around, and noted thatKelowna International Airport and its aerospace manufacturing are enablers of growth.1

The new facility will be constructed on the west side of the airport. It will include training facilities, ahangar, and an apron large enough to accommodate a Boeing 757.

Opens new land to aviation development. To access the planned facility, the City of Kelowna willprovide a tugway which will cross the CN Rail line, which runs north-south, parallel to the mainrunway. This new tugway will allow the development of adjacent lands for aerospace uses in thefuture.

Jobs. The education/maintenance facility will generate up to 109 direct person years of labourannually generating wages of up to $6.2 million, analysis by InterVISTAS for the KelownaInternational Airport showed.

This innovative program is a strong example of how a public airport working with private and publicpartners can develop a facility and program that no single participant could have developed on theirown.

1 ICF Consulting, “Okanagan Competitiveness Strategy: Analysis,” January 2004.


TOURISM AND THE END TO WORLDPOVERTY15 June 2005

World Bank/ICAO/ATAG Conference. I had the honour to be invited to attend andaddress a joint conference of the World Bank, ICAO and ATAG. The theme of the conference was“Maximising Civil Aviation’s Economic Contribution.” One theme that was emphasised at theconference was the new view of the UN and the World Bank of the role of tourism in lifting nations outof poverty.

An about face on the role of tourism in economic development. Considerthis from UN Secretary General Kofi Annan: “It is now widely understood that tourism can play asignificant role in helping people lift themselves out of poverty”. This statement reflects an emergingconsensus view which in many ways is an about face. Not too long ago, tourism was viewed at bestas supporting only low wage jobs, and at the worst as perpetuating colonial suppression of the lessdeveloped nations.

However, as reported by Naomi Cide at the conference, the evidence indicates that the fastestgrowing economies in Africa are those that had the largest share of tourism in GDP. This and otherevidence has changed the view of world leaders, and the developing nations themselves, as to thestrong positive role that tourism can play in lifting nations out of poverty. Meles Senawi, PrimeMinister of Ethiopia, recently stated: “My Government believes an increased focus on tourism canplay a more significant role in the War on Poverty in Ethiopia & across Africa as a whole.”

As a result, tourism has been included in UN’s Millennium Development Goals (MDGs). In explainingthe integrative role of tourism, Kofi Annan stated that: “It can benefit other economic sectors and smallbusinesses, such as traditional agriculture and food production, handicrafts and textiles. Througheco-tourism -- one of the fastest growing parts of the industry -- it can contribute significantly to ruraldevelopment, while promoting the environmentally sensitive development of basic infrastructure inremote locations.”

The World’s Largest Economic Sector. Geoff Lipman of the World TourismOrganisation (and formerly with InterVISTAS’s predecessor Global Aviation Associates) stated thattourism is now the largest economic sector in the world, and that the UN is recognising that it can playa significant role in lifting the least developed nations out of poverty. ICAO’s Cornelia Fischerreported on the role of air transport. She indicated that air transport accounts for over 5 million directjobs (airlines and airports) world-wide, plus up to 8.5 million indirect and induced jobs. However,when ‘catalytic impacts’ are considered, those 5 million jobs drive up to 33 million jobs globally. Thecatalytic jobs from air transport are those enabled in other economic sectors (e.g., tourism, distributionservices) by the availability of well connected, accessible and affordable air transport.

The policy link. Geoff Lipman and others emphasised that to enable the full potential oftourism and other catalytic effects from aviation, nations must re-examine archaic foreign ownershiplimits on air transport. Commercial aviation’s mercantilist/protectionist approach is virtually the lastsector excluded from the world trade regime, yet it is the catalyst to lifting nations from poverty. ICAOagrees and recommends that nations repeal foreign ownership limits in bilateral air serviceagreements, and replace them with “principle place of business” clauses.

A final note: For those interested in the MDGs to end poverty, I highly recommend reading JeffreySach’s new book The End of Poverty. Jeffrey is special advisor to Kofi Annan, and one of the mostbrilliant and influential economists of our age.

Michael Tretheway

Executive Vice President

For conference program and information:http://www.icao.int/ATWorkshop/


Sam Barone

Regional Vice President

THE OTTAWA REPORT16 June 2005

Transport Canada Releases Consultation Documenton the Current Canada-U.S. Air Services AgreementOn 26 May 2005, Transport Minister Jean-C. Lapierre released aconsultation document to obtain stakeholder views on the current Canada-U.S. Air Transport Agreement. The current agreement was signed in 1995but since then, the U.S. has defined “open-skies” more precisely (the currentagreement is not considered “open-skies” by the U.S.), and a moreliberalised agreement is being considered. The 1995 agreement has onlyvery limited provisions for fifth freedom services (pick up traffic in the otherpartner’s territory and carry it to a third country as part of a service from thehome territory), seventh freedom services (stand-alone services between the other partner’s territoryand a third country), co-terminalisation of certain cargo flights, and contains restrictions on pricing andflight numbering. Transport Canada estimates that the current size of the Canada-U.S. airtransportation market is about 18.6 million annual passengers, one of the largest international airtransportation markets in the world.

Canada and India Reach New Air Services AgreementCanada has reached a new air services agreement with India that increases the allowable number offlights between the two countries by five-fold to 35 roundtrip flights per week for each country.Canadian air carriers will now have access to the Indian markets of Bangalore, Chennai, Hyderabadand Kolkata (Calcutta), in addition to Delhi and Mumbai. Indian air carriers now have access toEdmonton, Vancouver, and two other cities to be named by India, in addition to Montreal and Toronto.The agreement allows for unlimited cargo capacity between the two countries. Each country can alsodesignate as many carriers as it wants for Canada-India services. The Canadian and Indiannegotiating delegations have agreed to meet again in 2007, or sooner if necessary, to ensure that thenew bilateral meets market demands.

New Truck Route Announced for Sault Ste. Marie to Improve Access tothe U.S.The governments of Canada and Ontario and the City ofSault Ste. Marie has announced the construction of aCDN$12.6 million truck route in Sault Ste. Marie to improveaccess to the International Bridge connecting traffic betweenOntario and Michigan. Over 120,000 commercial truckscarry approximately CDN$3.5 billion in goods over theInternational Bridge each year. Federal government fundingcomes from the CDN$65 million Border CrossingTransportation Initiatives portion of the Strategic Highway Infrastructure Program (SHIP) that wasannounced in 2001.


THE WASHINGTON REPORTJune 2005

DOT Report Finds ATC Modernisation Costs and Delays GrowingU.S. air traffic control modernisation is being hampered by cost increases and implementation delays,says a report released by the Department of Transportation’s Office of Inspector General. SixteenFAA projects to modernise and improve equipment and facilities for air traffic controllers werereviewed and eleven were found to have costs grow by over US$5.6 billion. Nine were found to havedelays ranging from two to twelve years and two projects were deferred. The report recommends thatthe FAA review the benefits and timing of each project given the current cost situation, and delaysand cuts in funding from Congress.

ATA Forecasts 4.1% U.S. Domestic Passenger Volume IncreaseThe Air Transport Association (ATA) expects about 200 million passengers to travel on U.S. airlinesthis summer, an increase of 4.1 per cent over what was carried last year. Low fares were cited asone reason why passenger volumes will increase without much profit for U.S. airlines, who arecontinuing to struggle with increased fuel prices and taxes.

New Acting TSA AdministratorThe Transportation Security Administration (TSA) announced that Ken Kasprisin, currently actingdeputy administrator for TSA, has been named acting assistant secretary for TSA, replacing DavidStone, whose last day was 3 June 2005. Tom Blank, TSA’s chief systems support officer, fillsKasprisin’s previous post.

DHS Announces New Security Plan to Re-open Washington Reagan toGA TrafficAs part of the 2003 Vision 100 - Century of Aviation Reauthorization Act, Congress had theDepartment of Homeland Security (DHS) develop a security plan to permit general aviation aircraft tooperate into and out of Washington Reagan Airport (DCA). The new security measures will allowGeneral Aviation (GA) traffic to return to DCA, but will be limited to a maximum of 48 flights per dayand will be subject to strict security measures, including:

• Advance registration and pre-clearance of flights;• TSA inspection and enhanced background checks of crew, passengers, baggage and cargo; and• All flights must have a Law Enforcement Officer on board.

GA flights are expected to resume 90 days after the publication of an interim final rule, which will bereleased shortly. GA operations to DCA have been suspended since the terrorist attacks in 2001, atwhich time there were approximately 95 daily GA and charter flights in and out of the airport.

DOT Modifies Law for Rebooking Stranded Passengers of BankruptAirlinesThe DOT recently modified the 2001 law that requires carriers to accommodate passengers of airlinesthat cease operations due to bankruptcy or insolvency. The DOT’s latest clarification allows carriersto charge up to $50 for accepting the ticket of an insolvent airline, and any departure fees the carriermust pay to a foreign government. The DOT added that a carrier must honor the ticket even if it fliesto a different airport near the same city, or if the routing is a connection rather than non-stop. The lawwill expire on 19 November 2005, but has been extended several times already due to the poorfinancial condition of the aviation industry.

Charles Chambers

Senior Vice PresidentInterVISTAS-ga2 Consulting Inc.

Washington, D.C.


INTERVISTAS NEWSJune 2005

Former Air Canada executive Doug Port joins InterVISTAS Consulting

Airline executive Doug Port has joined InterVISTAS Consulting Inc. asExecutive Consultant, Airline Services and Tourism Development. Port, whoretired from Air Canada as Senior Vice President, Customer Services, has morethan 32 years’ experience in the industry, including airport operations, marketingand sales, government and community relations.

As a company executive, he led major portfolios including Airports, CorporateCommunications, Marketing and Sales, Sales and Product Distribution, International, CorporateAffairs and Government Relations and Customer Service.

He will be based in the Greater Toronto area and will assist InterVISTAS’ clients in airline and airport-related strategic services, as well as developing new initiatives to stimulate tourism. Port started hiscareer in Air Canada in Public Affairs before becoming Executive Assistant to Claude Taylor, theairline’s then President and CEO. He was General Manager for Southern Alberta, and then for fiveyears ran Air Canada’s major hub at Pearson International Airport. As Senior Director, AirportsDevelopment, he was responsible for the redevelopment of Terminal II.

Yesawich, Pepperdine, Brown & Russell and InterVISTASLaunch New Portrait of Canadian Leisure Travellers Survey

Yesawich, Pepperdine, Brown and Russell (YPB&R) andInterVISTAS Consulting Inc. have formed a partnership to launch anew study on the travel habits, preferences and intentions of

Canadian leisure travellers. The results will be based on a survey of 1300 pre-qualifiedCanadian leisure travellers.

Canadian leisure travellers account for 80 million overnight trips and $10 billion in travel expenditures.The new Portrait survey will provide critical insights into the lifestyles and motivations of thesetravellers, their future trip intentions, their views on recent travel experiences at home and abroad, tripplanning and booking behaviour, emerging lifestyles and brand preferences.

YPB&R is a U.S.-based marketing communications company that specialises in serving clients in thetravel and leisure industries. The firm has gained international recognition for its series of forward-looking syndicated marketing research studies which include the YPB&R/Yankelovich PartnersNational Travel MONITOR™, the YPB&R Portrait of Affluent Travelers, the YPB&R Portrait of FamilyTravelers and the YPB&R Portrait of American Gamblers.

The survey, entitled the “2005 Portrait of Canadian Leisure Travellers,” will be completed thissummer, and copies of the results will be available in August. For further information contact DennisMarzella at YPB&R, 407-838-1706 ([email protected]) or Paul Clark at InterVISTAS, 604-717-1837 ([email protected]).

InterVISTAS’ Canadian Aviation Intelligence Report is a collection of information gathered from public sources,such as press releases, media articles, etc., information from confidential sources, and items heard on thestreet. Thus some of the information is speculative and may not materialise.

To inquire about advertising opportunities or to provide comments/feedback on the InterVISTAS’ CanadianAviation Intelligence Report, please contact Rob Beynon at [email protected] or 1-604-717-1864.

To subscribe, please send an email to [email protected] unsubscribe, please send an email to [email protected].

Prepared by InterVISTAS Consulting Inc.

cair issue no. 30 - june 2005

Documents

scot recommendations

airport issues

scot interim report

transportation scot

airport rentsby

aviation security

airport rental revenues

regional airports