not sure if anyone has posted this...but...
Edmonton's Energetic Expansion
Alberta's booming energy business is good for Edmonton Airport.
By Aaron Karp
Air Transport World, December 2006, p.47
AN ANNUAL "AIRCRAFT crash" emergency drill is winding down on a bright autumn morning at Edmonton International Airport and firefighters who had been simulating a search for debris and victims are beginning to relax. They toss a blue rubber ball in the expansive grass field where the drill has taken placeadjacent to the airport's two 10,500-ft.-plus runwaysand watch as Badge the fire dog chases after it. The canine gallops at full speed, snares the ball and returns it to the firemen, who toss it again. Badge races after it, stretching his legs on the wide-open field.
It is not a scene one expects to observe when visiting major North American airports, many of which have little room to spare. But Edmonton International sits on 7,000 acres, including more than 3,000 acres of adjacent undeveloped land owned by operator Edmonton Airports. No major Canadian airport has more room to grow. And with passenger traffic rising 10%-12% and cargo traffic increasing 9%-10% annually, the grass fields may not stay undeveloped for long.
"We're way ahead of schedule in terms of growth and capacity," Edmonton Airports CEO Reg Milley says. Adds VP-Marketing Peter McCart: "We're getting tight."
Edmonton Airports started a modernization program in 1998 that had as its goal expanding annual capacity to 5.5 million passengers by 2015. More than 5 million passengers used the airport in the first 10 months of this year and officials say the 5.5 million mark almost certainly will be surpassed in 2007, eight years earlier than expected. When Air Canada launched Edmonton-London Heathrow service last month, it marked the 13th destination added by airlines in just over a year's time, including nine by AC. "It's kept us very busy," McCart says. "It's like drinking from a fire hose."
Oil Sands
Why Edmonton? It is North America's northernmost big city, the last major gateway to the vast, often freezing hinterlands of northern Alberta, home of coveted oil sands that just have begun to be exploited. According to the Province's Energy Dept., oil sands "are deposits of bitumen, a molasses-like viscous oil that will not flow unless heated or diluted with lighter hydrocarbons. They are contained in three major areas beneath 140,800 sq. km. of northeastern Albertaan area larger than the state of Florida . . . However, only about 2% of the initial established resource has been produced to date."
The international energy industry is estimated to have invested C$10 billion in Alberta's oil sands in 2005 alone. "Annual oil sands production is growing steadily as the industry matures," the Alberta Energy Dept. says. "Output of marketable oil sands production increased to 966,000 barrels per day in 2005. With anticipated growth, this level of production could reach 3 million barrels per day by 2020 and possibly even 5 million barrels per day by 2030."
"Edmonton is the staging area for all that activity," Milley says. "You can't just turn those projects off . . . [oil sands] are drawing people from all over the country to live and work in Edmonton. We're looking at above-average growth [in passenger and cargo traffic] for at least five to ten years."
Edmonton's growth as a city and the development of the airport, now Canada's fifth-busiest, go hand-in-hand. "Air transport is a huge driver of the economy," Edmonton Mayor Stephen Mandel, who has traveled to the Far East to meet with airline executives curious about Alberta's capital city, tells ATW. "Oil sands is a different animal and Edmonton is the supply and service center . . . Edmonton's growth has been pretty spectacular over the last few years. We've become a center of supply and distribution."
Air Canada President Montie Brewer visited Edmonton in early October. He was given a flyover tour of the oil sands projects and delivered a speech at the city's Chamber of Commerce. "Our ties with Air Canada are in our DNA," says McCart, who worked for AC for 17 years before joining Edmonton Airports late last year.
The airline has ramped up its Edmonton service quickly to take advantage of the city's explosive economy. AC and Air Canada Jazz offer up to 53 daily flights from Edmonton to 17 destinations. By year end AC will have launched service to nine new nonstop destinations from the airport during 2006: Montreal, Los Angeles, Yellowknife, Victoria, Kelowna, Las Vegas, Heathrow, Cancun (Dec. 20) and Punta Cana (Dec. 21).
AC has a 40% market share in Edmonton while WestJet, based in nearby Calgary, also operates 40% of the passenger flights. "We've got good, healthy competition between Air Canada and WestJet," McCart says. "There's plenty to go around."
WestJet President Sean Durfy says the city is a key market. "Edmonton is the gateway to the oil," he comments. "I see it as a growth market over the next decade." The LCC operates 174 weekly departures there. US carriers Northwest Airlines, US Airways, Horizon Air, Delta Air Lines and United Airlines all operate transborder flights to Edmonton. Overall, 16 scheduled airlines serve the airport as well as several charter operators. Milley says his next goal is to land direct service to Houston, which would link the primary US and Canadian oil centers.
Current landing fees are C$6.68 per 1,000 kg. for jets with 45,001 kg. or greater maximum permissible gross takeoff weight. Milley calls the fees "very, very competitive," adding: "We don't see increasing landing fees or passenger fees over the next five years." Passengers are charged a C$15 airport improvement fee per ticket.
The airport features two terminals, one constructed in 1960 and the other completed in 2000 at a cost of C$127 million. They are connected by a C$96 million Central Hall on which construction was finished in 2003. The older North Terminal, primarily used by WestJet, was given a C$17 million facelift in 2005.
The airport operates 24 hr. a day with no restrictions and officials boast that it has been closed for only 2 hr. in the past 10 years, a significant accomplishment considering Edmonton's harsh winter weather. Its runwaysone stretching 10,600 ft., the other 11,000 ft.are in a V configuration and can handle simultaneous operations. The runways and taxiways are capable of handling any aircraft size.
Global Links
The link to Heathrow is the airport's first flight to Europe since 2001. It also is eyeing Asian services, particularly cargo flights.
Representatives from Edmonton Airports visited Asia in November. "Cargo is probably what we're going to look at," Milley says. Mandel says he's had "very positive" meetings with airline executives in China and Japan. "China has big potential," he says. "There's trading potential that creates the possibility for direct [cargo] service. But it's not going to happen overnight." The rapid rise in passengers may seem like it has happened overnight for Edmonton Airports. When the Central Hall was finished in 2003, the terminals were meant to meet capacity demands for more than a decade. Instead, growth is eight years ahead of forecast. "It's caused a number of pinch points in the terminals," McCart says. "We're extremely short on gate availability, particularly during morning peak . . . We set the clocks to go off in 2015. But now we have already begun a review of our total facilities."
Milley insists the tight capacity is "a wonderful issue" for an airport operator to have. "We've had the best year in the history of the airport," he boasts, citing big capacity increases by both AC and WestJet. "We know we're going to have to add gates and apron space." Edmonton Airports earned a C$6 million profit in 2005, widened from C$4.5 million in 2004.
The operator has approved a new capital improvement plan in which C$50 million, raised through the Alberta Capital Finance Authority, will be invested annually over the next five years, much of it for adding automobile parking spaces and making terminal and taxiway improvements that aim to maximize use of existing facilities. Over the next 20 years, it plans to boost attached passenger gates from 18 to 33.
It is also a primary player in the development of Port Alberta, a multimodal cargo hub being built on 1,500 acres adjacent to the airport. It is being designed to link air cargo with rail and trucking as well as sea shipping via the Port of Prince Rupert and the Port of Vancouver.
The "inland port" seeks to take advantage of Edmonton's prominent position in the global energy industry as well as its location in North America. "Edmonton International has access to enough developable land to host the infrastructure and operating requirements needed to make Port Alberta a reality, and is strategically located at the crossroads of major air, surface and rail transportation routes," Edmonton Airports says in a primer on the project. Ultimately, officials believe it could serve as a link for moving air cargo among Europe, North America and Asia, drawing A380F and 747-8F operators.
"The overarching strategy is to move away from the concept of an airport and call ourselves a transportation hub where all modes of transportation can be accessed effectively to facilitate movement of goods globally," Edmonton Airports Director-Cargo and Business Innovation Glen Vanstone says.
Development on Port Alberta is just beginning. The facility will be in close proximity to the second-largest oil and gas manufacturing park in North America (the largest is in Houston), which is located alongside the airport. Port Alberta is expected to open in three years for initial operations. "There's a tremendous amount of unrealized opportunity here," Vanstone says. "We need to take advantage of the location and the economy."
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