To say business at London International Airport is soaring would be both true and, well, too obvious.
Compared to what Steve Baker, chief executive officer of the airport, has in mind, however, it’s a complete understatement.
“We want to develop the airport as a distribution centre for southwestern Ontario,” Mr. Baker says boldly.
Already the third busiest airport in Canada for total aircraft traffic, the Greater London International Airport Authority which operates the facility has set its sights higher. It wants to tap into the International Air Cargo Trans-shipment Program that allows air cargo to be moved through the airport for shipment elsewhere.
Last week the federal government approved London International Airport’s request to join this program, which will enable the growing facility on the city’s eastern border to further develop its air cargo activity and seek new market opportunities.
And those new markets, says Mr. Baker, are in Europe where the federal government has recently negotiated a liberalized air service agreement with the 27 countries of the European Union, creating new opportunities for greater international trade across our region.
More than half of Canada’s overseas tourists hail from Europe and the European Union is Canada’s second largest trading partner after the United States with some $84.2 billion in imports and exports.
The international air cargo decision, on which Mr. Baker and his team have been working for more than a year, is a major coup for the city and one that positions London well to take advantage as the economy begins to improve.
“We see freight as an opportunity for London to be ready for the economic recovery,” Mr. Baker says. “The federal government is proposing to spend billions on infrastructure and we believe a significant amount will come to southwestern Ontario. We want the city to invest not only in pipes and potholes but also support for infrastructure that will provide sustainable jobs. Some of that money can build this infrastructure so that we can re-hire displaced workers from our community.”
There are plenty of reasons to celebrate this concept and the numbers at the London International Airport support these initiatives.
“Our focus is now cargo, passengers, flight training and manufacturing with Diamond Aircraft. We’ve invested in each of these areas for overall success,” Mr. Baker says. “We work with the city and the South Western Economic Assembly. We market to 1.7 million people within that catchment area. By broadening that population’s exposure to the airport we’ve had a 51 per cent increase in passenger traffic.”
He sees this opportunity as one that will secure London’s future as the transportation hub of the region.
“The role of the airport is to be the transportation hub of southwestern Ontario,” Mr. Baker says. “We’re competing with other airports in Ontario and the eastern United States. In this case, it’s essential to collaborate with London and the South Western Economic Assembly for a transportation strategy that includes road, rail and air. There are rail lines at the north and south of London’s airport.”
It’s a vision that has been slowly developing for more than a decade.
“We started 10 years ago in 1998 and developed a strategic plan to diversify the services of the airport,” Mr. Baker says. “We did extensive consultation on what people wanted and what the opportunities were within the region. We were thinking London and outside of London. At that time 90 per cent of our business was from London. This year 45 per cent is from London and 55 per cent is from the region. People throughout South Western Ontario believe that London is the transportation hub and use our services.”
With that has come significant investment but the return has been even more remarkable.
“The original facility was built in 1964 and we invested $20 million in 2003. That investment produced an effective, efficient, low cost and high volume terminal for both passengers and airlines.
“By completing that proposal and doing significant market research we attracted West Jet Airlines into London for direct service across Canada. We started with three flights a week and now its three flights per day. That demonstrated passenger support for the facility and our cost effective service.
“We also added flights with Air Canada, Norwest Airlines and introduced seasonal sun flights five times per week to Florida, Mexico, Cuba and the Dominican Republic. Again, it’s high value and low cost service in a profitable environment for the airlines and customer service for our passengers.”
There has also been amazing growth in international pilot training with students from China and India over the past two years.
“International flight training was introduced in 2007 by one company with students from India. We now have five companies with students from India and China. It’s the largest international flight-training centre in Canada.
“It was seeking opportunities that were long term, created local jobs and are enterprises that the airport can undertake. There are 300 million Chinese and 400 million West Indians who are now evolving to successful middle-class. They have a demand for worldwide access as any country does. China has restricted airspace and does not allow flight training.”
Then there’s the new development around the airport through the Skyway Industrial Park with new opportunities being presented through the international air cargo transshipment program.
“There is 20,000 acres of land at the airport and we have looked at a strategy for using land and introducing new businesses to London in partnership with the City of London. It’s called Skyway Industrial Park with 53 per cent city land and 47 per cent airport lands. It currently includes CEVA Logistics, Billy Bee Honey and London Machinery/Oshkosh Snow Machines are building new facilities as well there’s a UWO research facility and corporate headquarters for Discovery Air and Flightexec,” Mr. Baker says. “We’ve shown significant success and we would now like to replicate that success in our freight division.”
It’s a unique opportunity not to be squandered given that the program was originally introduced in 1982 at Mirabel Airport as part of a larger effort to improve the use of Montreal area airports. It has since been expanded to other airports, including Hamilton (1987), Windsor (1993), Gander (2000), Winnipeg (2004), Edmonton (2006), Calgary (2007), and Abbotsford, Vancouver, Moncton, Toronto, Halifax and Prince George (2008).
The opportunity here is that neither Hamilton nor Windsor is using the program effectively and there’s a great economic argument for choosing London over Toronto.
“The government has been very restrictive in granting this international air cargo transhipment program,” Mr. Baker says. “You have to put forward a business case on how you will use this opportunity. Almost all air cargo goes to Toronto and is distributed and then shipped back to Toronto and flown out.
“We’re saying we’re more cost effective than Toronto and our cost are one tenth of Toronto’s. Toronto has invested but has debt of $4.4 billion. That relates to many of the fees and charges at the airport.”
While this is promising, Mr. Baker is not done yet.
“We’re out seeking development opportunities all the time. I have a vice president and myself who seeks opportunities on a continuing basis. We’re also working on passenger convenience. We’re working with the federal government to have arrivals duty free rather that buying duty free items prior to your return flight to Canada,” Mr. Baker says. “We built our success on our strategy and what we believe will be successful. We have a proven track record in ever area.”
Prev
Linear Mode
