Founded in 1608 and nestled in the cliffs overlooking the St. Lawrence Seaway, Québec City is seen as a North American jewel and popular tourist destination. The provincial capital of Québec, it is the only ‘walled’ city north of Mexico and carries a distinct European flavor. Earlier this decade as officials began planning for the city’s 400th anniversary, a plan was put in place to finance a modernization of the Jean Lesage International Airport terminal by local, provincial, and federal governments. The target: Open the complex in time for the 400-year celebrations, and ensure the new facilities would allow for flexibility for future development and expansion.
Often referred to as the cradle of French civilization in North America, Québec City has been listed as a premier tourism destination by several travel publications, and has been recognized by the United Nations Educational, Scientific, and Cultural Organization (UNESCO) as a World Heritage site. It has a population of some 632,000.
According to the city tourism board, some 4.3 million tourists visited Québec City in 2007, including more than 1.1 million from 75 countries other than Canada.
In developing the new airport facilities, says airport president and chief operating officer Pascal Bélanger, “It was important for us to give ourselves the capacity to grow; and it also gives the city, both residents and visitors alike, the infrastructure that is conducive to what you see today at airports.
“Ultimately what we were able to do was build a facility that gives us some latitude to grow over the next several years; but also to integrate more amenities and services for passengers.”
The modernization of Jean Lesage International was not only spurred by the need for additional capacity and an upgrade in technology, but also to help Québec City become recognized as a modern, vibrant, and welcoming city for investors and travelers. The completion of the large-scale terminal modernization project coincided with last year’s celebration of the city’s 400th anniversary.
The previous terminal facility at Québec City Jean Lesage International Airport had a capacity for some 800,000 passengers annually. “We outgrew that very quickly,” relates Bélanger. “In the last couple years, we have experienced double-digit growth. Our traffic has been on the rise significantly; between ’06 and ’07 our numbers were up 12 percent, and up another 17 percent the year after,” he explains. “Currently the airport is trending at about the same numbers as last year; so we are still doing good, all things considered.”
The plans for modernization of the airport began back in 2002, and it took a couple years to get everybody behind it and the funding in place, says Bélanger. The go-ahead to build was given in 2006, and the modernization project is currently about 95 percent complete. The new air terminal was inaugurated in October of last year; the remaining five percent of the project consists of a 255-foot long extension attached to the end of the terminal building which will allow propped aircraft to be parked in a way that gives the airport the ability to minimize outdoor walking for passengers.
“This is a cold-weather airport, and in the winter we get between 12 and 16 feet of snow,” says Bélanger. “We had to have designs that cater to the harsh climate.” The terminal extension is planned for completion by the end of September 2009.
According to Bélanger, the new facilities had to be built within the same footprint the airport had before plans for modernization. Project engineers had to phase things in a particular way, and that’s why the modernization took a little longer than expected, he says. All things considered, the terminal project was still complete in two years time.
The new terminal features a state of the art baggage area, and a full common-use check-in facility. “We wanted to make sure we would give ourselves all the flexibility we could,” says Bélanger.
“The common-use check-in and common-use kiosks were imperative for us because we wanted to be sure to maximize every square-foot of the facility. All of our signage directing the passengers is digital and dynamic, meaning it can be used by any airline company. Very few airports of our size are fully automated like this.”
For example, Bélanger says airport officials wanted to minimize issues related to passenger baggage, so a DCV (destination coded vehicle)was purchased, and Québec City Airport was the first in North America to have such a system. The system is manufactured by the British firm Logan Teleflex and has the capability to collect bags directly from a check-in desk, deliver them to security screening X-rays, collect the bags, and then sort them. According to the company, the nature of the technology guarantees 100 percent tracking accuracy of baggage.
“We acquired that system in order to make sure everything was automated, from check-in through security, all the way to the baggage banks and chutes in the back where the bags are dropped,” says Bélanger.
“We did this to be sure we had the flexibility and capacity as we go forward in the future to keep getting more passengers through here with maximum efficiency.”
A focus on technology
Because all of the airport IT systems and infrastructure are very dependent on Internet protocol, both cable and Wi-Fi, Cisco Systems Inc. was hired to implement the latest in IT network solutions, says Bélanger.
“The system gives us a super robust environment and the ability to keep adding new bells and whistles for the future,” says Bélanger.
“As new technology is introduced, we can add whatever pieces of technology that emerge in the future to our system. With a high-end IT infrastructure, we have the flexibility to be able to change things around or add new technologies in an efficient way.”
With regard to common-use technology, the airlines have an agreement with the airport to utilize all of its common-use equipment, and so far that has gone very well, relates Bélanger. It helps lower operating costs and saves the recurring expense of having to maintain equipment.
From a security perspective, Bélanger says he and other like-sized Canadian airports have asked the Canadian Border Services Agency (CBSA) to give them EPIL technology, but it hasn’t happened yet. EPIL — electronic primary inspection line — was introduced as a pilot program at Vancouver International last year, and is part of an effort to expedite the movement of low-risk passengers and allow the CBSA to focus its resources on high-risk passengers and goods.
Beyond EPIL, there is a new pilot project also currently being run in Vancouver called automated border control. “That is something that we are real interested in,” says Bélanger, “And we are hopeful that it will make its way from testing to a full rollout at other airports. It will give airports like ours the ability to get passengers through Customs more quickly with less staff.”
The design of the new terminal incorporates “themed” areas which also utilize new technology, but for enhancement of the customer experience. Jean Lesage International now has a comprehensive business center located airside and available for use by any airport customer. The center includes free Wi-Fi as well as access to desktop computers available for public use, free of charge.
“That may be a small detail, but it is something that our passengers really appreciate,” says Bélanger. “Wi-Fi access is also available to all passengers throughout the airport.”
The VIP lounge is another themed area of the terminal, but it can be utilized by invitation only. “We offer deals to our airlines that want to use the VIP lounge, and they let us know which of their customers they would like us to admit. The level of service and the quality of the product in the lounge has had very good reviews thus far,” says Bélanger.
There is a business center within the lounge, meeting rooms, and a full complimentary bar. Relates Bélanger, “One of the primary perks of a smaller sized airport like ours is the level of customized service and attention that is given to the clients.”
Designing the new terminal to reflect a taste of the community and region played a significant role in the materials used during construction, says Bélanger.
“There are quite a few mountains in our area; we were able to use native rock and stone for some of our terminal walls,” says Bélanger. “We also used a lot of wood, which reminds us of the wooded country that our city is nestled into. We tried to look at certain things, and tried to incorporate certain products and design elements that remind people of where we live, and the geography around us.”
In terms of retail, the previous terminal had few concessions which were mostly located pre-security. When the new terminal was designed, airport officials decided to move nearly all retail and concessions airside.
“We have the Canadian coffee shop chain Tim Hortons Inc. as well as a bar cityside; but have placed most of our retail — the Duty Free and HDS RELAY retail shops, along with a restaurant and a bar — airside.
Because there was still significant demand for cityside concessions, officials had to be sensitive to the ‘meeter and greeter’ market. “At a smaller airport like ours, word gets to management quickly that one thing or another is or is not needed,” says Bélanger. “You can’t be reactive; you really have to get in front of it and deal with it. That is why we recently put in the cityside bar.”
The new terminal was funded in three ways, relates Bélanger; $15 million came from the federal government; $15 million came from the provincial government; and $45 million was borrowed from the local business market. The modernization project was estimated at $65.5 million.
“We knew that between getting our private funding through the markets on one side, and the federal and provincial help from the government on the other; that the funding plan went nicely with the project we were undergoing,” says Bélanger.
The funding of airports in Canada is a different set-up compared with American airports, says Bélanger. “The funding for this project was obtained privately; no tourism or business board was involved.
“We went through a large financial institute in Québec City; the bank went to the market and encouraged companies and investors to buy small pieces of the $45 million we needed to borrow,” says Bélanger. What we wanted first and foremost was to be able to pay the debt off fairly quickly.
“We received a good interest rate and the $45 million is planned to be paid back in 20 years, which is pretty aggressive. That puts more financial pressure on us, but down the road we will save on interest.”
Canada’s airport improvement fee (AIF) is dedicated for capital-eligible expenditures, and can be used to pay for projects like the modernization of Jean Lesage. According to Bélanger, the airport has been collecting AIFs for a number of years. When embarking on a project such as Québec City’s, plans that use AIFs have to be presented to the airlines.
“The airport decides on the amount of the AIF,” says Bélanger. “We look at that fee each year, and we will adjust it if we feel that is the right thing to do, based on a number of factors.”
The fee is currently $20 (Canadian) per departing passenger. The AIF is used to help pay off the $45 million that was borrowed for the terminal project. The AIFs are also used for additional capital expenses including runway restoration and airfield development. AIFs must be used for eligible expenses as outlined in the memorandum agreement made with the carriers, says Bélanger.
Air Service Development
In 2000 when the airport was privatized, relates Bélanger, annual enplanements were some 600,000. In 2008, just over one million passengers went through the airport. Even though numbers this year remain relatively flat, Bélanger points out, “Last year we had a 400-year celebration for the city, so traffic was significantly higher than it was the year before. We are remaining cautious about the future to make sure that we can tap into the next upturn. When things get better economically, we plan to be poised and ready for growth.”
The type of air service growth in recent years at Jean Lesage has been mainly international and trans-border flights. New daily flights began last year to Chicago; and Continental added a fourth daily flight to New York.
“There have been a lot of enhancements to international and trans-border schedules,” says Bélanger. “Last year we also saw two new domestic carriers, WestJet and Porter; both of which began service to Toronto. With flagship domestic carrier Air Canada, we now have three primary Canadian carriers flying into this airport, which is good news because it adds competition and reduces fares.”
Similar to most Canadian airports, Jean Lesage’s lease terms with the carriers include landing fees, terminal fees, and jet bridge fees. Being a cold-weather airport, Québec City’s operating fees tend to be higher than airports to the south and west.
“Generally speaking, we can strike specific deals with the carriers on a case by case basis as a way of incentivizing service development,” says Bélanger. “If an airline comes in and offers a destination not carried by another carrier here, we look at trying to help them out, mostly by investing in marketing the service to the public. We want to help the carrier get established, especially those foreign carriers which don’t have a presence here.
“We are not adverse to giving fee abatements to start-up operations, but fee reductions can’t be sustained long-term. We try to invest in the air service by marketing it and making people aware of the airline companies.”
Québec City receives roughly more than five million visitors each year, says Bélanger. “The U.S. market is big for us; it’s a little bit of a tough time right now with the economy in the state it is, but I am confident it is going to rebound.”
In terms of marketing the airport and its service, Bélanger and his team utilize a variety of techniques, including billboard advertising, radio, print, and also by getting people out to the airport to meet the local business leaders and community travel agencies.