One on One: CAC's Jim Facette

Canada's airports are faring well enough; it's Ottawa that presents some challenges

The president of the Canadian Airports Council, Jim Facette, relates that considering the economic times, his membership is seeing traffic declines in the 4 to 6 percent range, compared to double digit drops in the U.S. It’s the cross-border incoming activity from the south that is significantly down. The airport rent relief issue remains, but a new cooperative tourism venture could have an impact — if the CAC’s argument gets some traction. Obstacles to competitiveness are targets, while Open Skies agreements are welcome. AIRPORT BUSINESS recently interviewed Facette on the state of airports in Canada. Following are edited excerpts ...

AIRPORT BUSINESS: How would you characterize the economic environment at Canadian airports today?

Facette: Our passenger numbers are down. It varies geographically and by the type of passenger. Some airports have seen as much as a 14 percent decrease in U.S. passengers coming up to Canada, but domestic traffic might only be down 4-6 percent. Compared to our friends south of border, it’s probably not as bad as the U.S. Domestic traffic relative to the economic times is holding its own.

The carriers might say while there are bums in the seats, their yields aren’t what they would like. We’re in a climate where the carriers are making capacity adjustments. So planes look full but the capacity is down.

AB: Capacity cuts in turn are putting more pressure on airports to take on a customer service role in the U.S. Same situation in Canada?

Facette: In Canada that’s been the way for 15 years. The customer service perspective in Canada is driven by the airport management model of the non-share capital corporation. It’s really driven airport authorities to be customer focused.

So you’ve got situations here like the most recent announcement — self-tagging of bags. The top eight airports in Canada will roll out self-tagging of bags. This was a pilot in Montreal and there were an awful lot of our members who were interested.

The focus is also on kiosks; we use kiosks in Canada quite a bit to make life easier. There’s a move toward a standardized 2-D barcode for which you can get on your Blackberry or PDA to get you through Customs. So you’ll have a paperless boarding card; I use it all the time.

AB: Would you agree that capacity cuts are having an impact on customer service for airports?

Facette: It totally is. Carriers want to make money and there’s nothing wrong with that, so they have to pay attention to their yields; to the amount of supply they have in the marketplace. Where there are backups at airports due to delays or cancellations, it really places the need for airports to be aware of what’s going on and make the passenger experience the best it can be, given the circumstances.

AB: What’s the status of getting rent relief for airports from the feds?

Facette: At this point it’s really hard to say. We have this summer spent a great deal of time on airport rent. If there was any sort of glimmer of hope, in June the Prime Minister and Minister of Tourism and Small Business announced that the federal government, with the cooperation of the provinces and the territories, would develop a tourism growth strategy.

Part of that we believe is addressing the costs of flying into Canada. Canada prides itself as being a destination for international travelers. Airport rent is part of the costs of carriers coming into Canada.

We have done a return on investment study this summer and will present it to our respective ministers, the Cabinet level, in a few days.

Some of the highlights of that study [show that] at the end of the day elimination of airport rent we see accruing in excess of $730 million annual benefit to the Canadian economy, both direct and in incremental benefits. We’re talking creating over $300 million in expenses by new travelers to Canada, and those new travelers to Canada would total 580,000 that would be generated by the elimination of airport rent.

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