In Montreal, Consolidation

MONTREAL — Aeroports de Montreal (ADM) is the corporation responsible for the management, operation, and development of Montreal-Pierre Elliott Trudeau International Airport (formerly Montreal-Dorval International Airport) and Montreal-Mirabel International Airport, under the terms of a 60-year lease signed with Transport Canada in 1992. After the initial 60-year term, ADM has two ten-year options to extend the agreement. The corporation employs some 600 people at both airports and its head office. The airport system here has had some unique challenges — primarily one of overcapacity brought about by questionable projections by the federal government. Yet today, the management team is finding some unique solutions, while continually battling the rent relief issue facing all major Canadian systems.

The largest city in the province of Quebec and Canada’s second largest city behind Toronto, Greater Montreal is home to some three million people as well as two airports. Trudeau International is seeing passenger growth which James Cherry, president and CEO of Aeroports de Montreal, calls “explosive;” the other, Mirabel International, is about to welcome a new, and perhaps unorthodox, tenant — a theme park. Both developments can be partly attributed to the consolidation of passenger flights to a single facility in 2004 — a decision that Cherry calls “emotional” for some, “but the absolute right decision and I think in the long run it will prove to be the right way to go.”

Montreal’s Dual Airport History
Trudeau began operations in the early 1940s and was handling more than one million passengers by the mid-1950s. By the 1970s, Montreal was experiencing an economic boom and, according to officials, Trudeau wasn’t capable of accommodating the growth so a new airport, Mirabel, was constructed. However, at Mirabel’s peak, only three million passengers per year used the facility, as opposed to the 60 million that was forecasted.
“By 1982 it became evident that the traffic growth assumptions would not materialize,” relates Normand Boivin, VP of airport operations at ADM. “So the Canadian government decided not to go ahead with subsequent phases of the Mirabel project.

“Montreal is too small of a city to have two airports compared to a New York or Los Angeles,” Boivin insists.

“Transport Canada at the time was going to move all of the traffic from Dorval to Mirabel and close down Dorval. It was impossible for us to make money or even make sense in having international traffic at Mirabel and domestic/transborder traffic at Trudeau. The connecting time from Mirabel was ridiculous. We were running two halves of an airport.”
According to Cherry, ADM made the decision to eliminate passenger traffic at Mirabel after much deliberation and thorough research. The last passenger flight at Mirabel was October 31, 2004.

Mirabel: still a center of commerce
The loss of commercial service is certainly not the end of Mirabel. It is currently used for cargo operations by some 20 companies (roughly 45 percent of Montreal’s cargo comes in on designated cargo flights at Mirabel, while 55 percent comes in the belly of passenger aircraft at Trudeau), and also has industrial development, including Bombardier’s F-18 maintenance facility. The airport sees some 30,000 to 35,000 aircraft movements annually.

In December 2006, ADM signed an agreement with I.Parks-Oger International Consortium, made up of I.Parks Creative Industries, a French firm founded by Assouline and Jacques Gautherie, and Oger International, a construction engineering firm, to transform the former Mirabel passenger terminal into a theme park called AeroDream.

In order to accomplish this, ADM had to receive permission from Transport Canada to modify the land use policy, says Cherry. The airport will still accommodate cargo and general aviation traffic, but the terminal building will be isolated from the airfield.

According to ADM officials, AeroDream will be “designed as a festive and cultural dream destination where visitors can relax in a summery, tropical atmosphere. The proposed concept, based on the themes of water and outer space, will invite guests, their families and friends to escape to strange and imaginary new worlds and immerse themselves in the wonders of high-tech.”

The indoor facility will cover more than 100,000 square meters and will be open year-round. The project is expected to cost some $280 million. Features of AeroDream include: geodesic domes equipped with spherical screens; an aquarium allowing guests to explore as they wander through transparent plastic tunnels; an indoor beach; a fitness centre featuring spas, saunas, and therapeutic baths; cinemas; a shopping mall; video arcade; restaurants and bars; a museum; and, a television studio.

Trudeau is expected to be able to meet demand until passenger traffic “may” return to Mirabel. But the recent decision by the federal government to sell back some 11,000 acres of land to farmers may ultimately make it difficult to return passenger flights to Mirabel, say officials.

Consolidating passenger traffic to a single facility has allowed Mirabel to see its annual deficit, which was at $23 million in 2001, reduced to $2.5 million (a number Cherry says will hopefully be eliminated by 2009) and has contributed to the increase in traffic at Montreal-Trudeau, Cherry says. In 2006, Trudeau saw its passenger numbers increase by 8 percent and he estimates Trudeau will end 2007 with some 12.4 million passengers.

“We’ve seen tremendous growth beyond our expectations — particularly on the international routes,” Cherry says, adding that the strength of the Canadian dollar and an increase in offerings by air carriers have aided in growing passenger numbers. YUL currently offers air service from 45 to 50 carriers, depending on the season.

YUL Upgrades
In the last six years, according to Cherry, ADM has invested nearly $1 billion in upgrading its airports — the condition the corporation received them in was less than ideal. “The main reason why the Canadian international airports were privatized in the early ‘90s was that the government was not able to sustain the growth that was anticipated and the capital investments that were needed,” Cherry says.

Most recently, ADM more than doubled the operational space at Trudeau International, effectively doubling its passenger handling capacity, now projected at 16 million. The international arrivals area nearly quadrupled in size, including the addition of 26 Customs terminals and the installation of CanPass/NEXUS, a customs iris-scan technology.

Cherry says that while the expansion will serve the quickly growing market, the airport is moving ahead with other projects. ADM is in the process of building a hotel at Trudeau, and transborder registration will be moving out of the terminal to allow room to grow.

Relates Cherry, “Concerning ground access, this is a major concern for us, because the time it takes to reach the airport is a key factor in choosing to fly as a means of transportation. ADM and its partners are planning to run a shuttle between Dorval and downtown. Using the shuttle, it would take 15 to 20 minutes to travel between the airport and central station, rain or shine.”

He emphasizes that ADM is a leader in terms of implementing airport technologies designed to facilitate and speed up passenger flows inside the terminal. For instance, Trudeau was among the first airports to deploy self-service check-in kiosks with baggage tag printing and passport scanning capabilities.

Says Cherry, “If we continue to get 8 to 10 percent growth, which is what we’ve seen over the last three years, we’re going to have to seriously think about expanding — not that it’s a problem for us. We’ve built those terminals modularly, which allows us to add gate capacity, but we’re seeing it growing much faster than we anticipated.

“You build and you forecast on the basis of long-term growth rates of 3 to 4 percent. We’ll be good until about 2015. But as we know, in this business the year 2015 is tomorrow.”

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