CANADIAN ROCKIES INTERNATIONAL AIRPORT

Size: px

Start display at page:

Download "CANADIAN ROCKIES INTERNATIONAL AIRPORT"

Abel May
5 years ago
Views:

CANADIAN ROCKIES INTERNATIONAL AIRPORT 2018

1 CANADIAN ROCKIES INTERNATIONAL AIRPORT FIVE YEAR BUDGET PROPOSAL AND 2018 WORK PLAN

Areas of Focus: Safe Operations & Regulatory Compliance Air Service Development Lease Management Marketing

2 AIRPORT OVERVIEW Mission: To serve the region by becoming the airport of choice and to provide the City of Cranbrook with a safe, friendly, clean, efficient and profitable airport with a local sense of place. Areas of Focus: Safe Operations & Regulatory Compliance Air Service Development Lease Management Marketing & Economic Development Passenger Experience Sustainability: Financial, Social & Environmental Asset Management

3 AVIATION TRENDS Index Base Canada vs US Passenger Growth Passenger Growth in United States and Canada US Canada $ Billions Canadian Air Carriers Operating Revenues and Expenses Operating Revenue Operating Expenses

4 AVIATION TRENDS Real Average Fares Canada Indexed to 2016 Average Fare for Major Carriers - fares falling 2.3% per year $475 Average Fares $380 $285 $190 $95 $ p

5 AVIATION TRENDS Air Canada Regional: shift to higher capacity aircraft Beginning to retire Dash and CRJ100/200 aircraft Replacing with larger Q400 (76 seats) and CRJ705 (76 seats) In pursuing new and expanded regional service from Air Canada, airports will need to focus on opportunities that can support the +70 seat capacity threshold Fleet Count '- Air Canada Regional Fleet seats or less: 39% greater than 50 seats: +417%

6 AVIATION TRENDS WestJet: fleet expansion has been focused on Encore In recent years, unit fleet growth has been driven by Encore expansion; this continues into 2018 but is now ending Committed Fleet to YE 2018 (number of aircraft) Q Source: WestJet annual reporting, investor presentations.

AIRPORT 2017 Highlights: 130,693 passengers (YE Projection) 14,425 aircraft takeoffs/landings (YE Projection) 56 countries travelled to/from YXC Top 6: USA, UK, Australia, Germany, Japan, Mexico

7 AIRPORT 2017 Highlights: 130,693 passengers (YE Projection) 14,425 aircraft takeoffs/landings (YE Projection) 56 countries travelled to/from YXC Top 6: USA, UK, Australia, Germany, Japan, Mexico $1,365,113 (including carry-forwards for 2018) in Capital Spending ($267,200 funding from ACAP Grant, $402,490 funding from BCAAP Grant) Airside Apron Rehabilitation and Lighting Upgrade ATB Updates Complete: enhancing customer service Airside Gate Replacement 3,000 2,400 1,800 1, Total ACM A/C Movement Current vs Prev Year 2017 Total ACM

8 AIRPORT 2018 Strategic Objectives: Expand Air Service Gain WestJet Service to Calgary; Up-Gauge Air Canada Service to YVR; Attend ACI Jumpstart; Revisit Sun Destination Charter Partnership (Pacific Coastal to Kelowna for Sun Charter) Maximize Revenue Opportunities Increase non-aeronautical revenue: negotiate strong concession agreements, increase advertising revenue, secure long-term tenant for Firehall, Utilize Enterprise Risk Management to activate initiatives at key trigger points Enhance Customer Service Create picnic area at Reconciliation Sculpture; Implement Customer Survey; Continue to enhance parking system; HVAC Improvements, Website and App Development Maintain Financial Stability Manage EBITDA assurance plan; Increase building operating efficiency; Maintain Enterprise Risk Management; Renew AIF Agreement with ATAC (significant reduction planned) Airport Development and Growth Market Airport Industrial Land Development Plan; New Car Wash Facility (contingent on Firehall Lease)

9 AIRPORT SWOT STRENGTHS Internal: Where does the Airport Team excel? Excellent relationship between the airport management company and key stakeholders, western Canada s hub airports and industry partners Low airfares resulting from good competition on Vancouver route Connectivity and economic ties to Alberta central and Alberta North as well as BC s Okanagan and South Coast Expanded direct service to Kelowna and Victoria, and additional frequency to Calgary Enhanced air service via the PCA SAAB aircraft has commence to Vancouver, nearly doubling PCA s capacity on that route, driving a competitive pricing environment Due to influence of the mining and lumber sectors, local economy has sustained and proven less volatility than many other economies Strong local tourism product (Cranbrook tourism organization has been established) will grow tourism marketing for Cranbrook and the region WEAKNESSES Internal: What gaps do we have in organization or capabilities? No Trans-border (USA) direct air service HVAC maintenance costs Water Distribution System vulnerability (single well water source) Costs of maintaining winter operations equipment: ie. runway sweepers; sand truck; increasing costs of deicing chemical Wildfire vulnerability of nearby St. Mary s Land and Provincial Lands OPPORTUNITIES External: What opportunities arise from external factors? Development of aviation industrial park at the airport Further develop Eastbound service (through WestJet and/or Air Canada in connection with SkiCan) Nurture relationships with carriers formed at Routes and Jumpstart Use relationships with tier 1 and tier 3 carriers to create alliances resulting in new air service Maintain and strengthen relationships with local developers to capture new business resulting from new residents Continue talks with WestJet to add YXC as a destination within their regional Encore service Returning US market due to lower CAD $ (possible trans-border service) THREATS External: What threats arise from external factors Competition from nearby US airports offering LCC service to southern destinations Contraction of global economy Air Canada further rationalizing their fleet (fewer regional services) Pacific Coastal loses market share to YVR and contracts or stops service to YVR Crack spread on Jet A WestJet decides to serve Glacier Park Airport with Q-400 Loss of security screening (Transport Canada rationalization)

Memberships, Training 2% Other Professional Services 11% Repairs to Buildings,

10 2018 OPERATING BUDGET Expenses Human Resources 49% Insurance, Licences, Permits Other 3% 0% City Administration Fee 4% Marketing 3% Banking Contract 1% Memberships, Training 2% Other Professional Services 11% Repairs to Buildings, Lands 5% Materials & Supplies 7% Utilities 8% Fuel 6% Repairs to Equipment 1% 1,462,375

2018 OPERATING BUDGET HIGHLIGHTS (Expenses) 2018 Operating Expenses $1,462,375 Budget increase over prior year $ 57,079 Budget increase comes from: - Planning to

11 2018 OPERATING BUDGET HIGHLIGHTS (Expenses) 2018 Operating Expenses $1,462,375 Budget increase over prior year $ 57,079 Budget increase comes from: - Planning to purchase more sand, broom sections and urea - Line painting to be done through third party - Increase in hydro and fuel costs - Forecasting an increase in banking fees

12 2018 OPERATING BUDGET Revenue ATB Concession & Leasing 6% Land Leases 4% Ground Transportation 10% Public Parking Lot 20% General/Other Non-Aero 4% Aeronautical Revenue 56% Total = $1,998,216

Budget increases come from forecasted increase in

13 2018 OPERATING BUDGET HIGHLIGHTS (Revenue) 2018 Operating Revenue $1,998,216 Budget increase over prior year $ 49,764 Budget increases come from forecasted increase in passengers: - Passenger Fees - Public Parking Lot - Car Rental Concession

14 AIRPORT ENTERPRISE RISK MANAGEMENT

15 AIRPORT ENTERPRISE RISK MANAGEMENT

16 AIRPORT RISK & EBITDA ASSURANCE Revenue & Expense Risk Downside

17 AIRPORT RISK & EBITDA ASSURANCE Revenue & Expense Risk Downside

18 AIRPORT RISK & EBITDA ASSURANCE Revenue Opportunities - Upside Expense Reduction Total Downside Risk [9.1] Total Probability Weighted Impact $53,135 Total Profit Assurance [ ] $72,270

19 AIRPORT 2018 CAPITAL PLAN

20 Concluding Thoughts National Bank of Canada: 3% probability of recession within a year (as of May 2017) Canadian longest term of expansion: (16.5 years) Current expansion is roughly 8 years (began in 2009)

21 Concluding Thoughts cont d Is Growth Sustainable? Yes, and aircraft are being built to materialize this growth New aircraft much more efficient with lower seat costs Lower fares and increased carrier profits But there are business risks Individual carriers may not survive Economic cycle is 3 rd longest in history Aircraft Transition CRJ 55 seat, Dash 8-100/300 not in production and ageing out Future is 70+ seats, lower operating costs (and real fares) Millennials have air travel as a key element of lifestyle Expansion of Canadian Airline Capacity will end in 5ish years

COMOX VALLEY AIRPORT. Strategic Plan Summary. October 2010

COMOX VALLEY AIRPORT. Strategic Plan Summary. October 2010 COMOX VALLEY AIRPORT Strategic Plan 2011-2015 Summary October 2010 COMOX VALLEY AIRPORT Introduction History The Comox Airport was constructed by the Department of National Defence in 1942. The Comox Airport