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June-July 2009

Prime Minister Commits to National Tourism Strategy

The Prime Minister of Canada has committed the federal government to developing a national tourism strategy. The development comes after a meeting of tourism sector officials during Tourism Day on the Hill.

"Tourism is an increasingly important industry that supports small businesses in every region of our country and keeps thousands of Canadians employed," said the Prime Minister, in comments that came after he and Minister of State for Tourism and Small Business Diane Ablonczy met with representatives of the Tourism Industry Association of Canada (TIAC) as part of Travel and Tourism Day on the Hill.

According to a press release from the Prime Minister's Office, "Canadians who work in the tourism and hospitality sector will benefit from a federal tourism strategy that brings together the best ideas from the public and private sectors."

CAC Participates in Travel and Tourism Day on the Hill

The Canadian Airports Council recently was one of several groups that participated in the June 4th Travel and Tourism Day on Parliament Hill.

In a day-long flurry of meetings, about 50 representatives from various areas of tourism met with over 70 members of parliament, including five ministers. Meetings were organized around three priorities:

The federal government needs to recognize that air travel is an enabler and driver of the economic prosperity of Canada.
A strategy should be developed that will advance the competitiveness of Canada's aviation and tourism industries.
The federal government should be proactive and diligent in negotiating liberalized bilateral air transport agreements, as per the Blue Sky policy framework.

Also participating were the Tourism Industry Association of Canada, which shouldered most of the responsibility for organizing the event, the Hotel Association of Canada, National Airlines Council of Canada, the Canadian Association of Tour Operators and the International Air Transport Association.

Canadian Q1 Traffic Down

Preliminary traffic results from Transport Canada (Top 30 participating airports) indicate that for the first quarter of 2009, traffic was down 5.8% over the first quarter of 2008, on reduced capacity and slightly weaker loads.

U.S. transborder traffic continued to fall at the deepest rate - 8.3% - while domestic traffic was down a hefty 7.9%. Overseas traffic managed to grow 2.2%, reflecting the continued demand in the international market amid restricted competition. Monthly results indicate a slowing on this overseas growth and worrying deeper monthly declines in the domestic and transborder sectors.

Air Canada for the quarter reduced capacity by 10.3%, while WestJet increased it 7.2%. Both carriers for the quarter reported slightly weaker load factors.

Emirates to Canada: "Protectionism of the Worst Kind"

Emirates President Tim Clark took the launch of the Airbus A380 into the Toronto market recently as an opportunity to reiterate the company's call for increased flights to Canada -- currently blocked by the federal government.

"...It is our view that protectionism of the worst type is being applied to aspects of your air transport policies," said Mr. Clark in a speech to the Economic Club of Canada. "Despite increased demand, growing links between our two countries and our desire to fly more often to Canada, some elements of Ottawa continue to insist that Emirates be limited to flying just three times a week to all of Canada.

The federal government has long refused to open the Canada bilateral with the UAE -- a request Emirates claims is 10 years old. In a letter to Emirates, the government reportedly claims its opposition is due to a concern that increased service would "divert revenues from Canadian air carriers and bilateral partner airlines operating to Canada."

In his speech, Mr. Clark noted support from six provincial governments, municipalities, tourist organizations, business groups and other politicians.

In contrast to Emirates' three flights to Canada, the carrier currently has no restrictions on service to the United States, United Kingdom or New Zealand and is able to operate as many as 84 times a week to Australia. The carrier currently is seeking approval to serve Toronto daily and operate service to Calgary and Vancouver.

"A decade ago Emirates was restricted to just three flights a week to all of Australia. The national carrier and some vocal interests in the alliances warned of the end of Qantas if Emirates was allowed in," said Mr. Clark. "Today, Emirates flies nine times a day to Australia. The Australian government has become one of the most vocal advocates of Emirates...And Qantas - until the middle of 2008 - remains in good health."

INTERNATIONAL TRAFFIC
World Airport Traffic Declines Ease

In April 2009 worldwide airport passenger traffic growth showed a decrease of 3% relative to the results in April 2008. For the month, international passenger traffic declined by 1.8%, whereas domestic traffic fell more sharply by 4.9%.

These results indicate that the declining traffic trend seen in the first quarter appears to be easing, with Middle East and Africa regions registering positive results for the month, and Asia Pacific, Europe and North America showing more modest declines than in the early part of the year. With Easter in April this year, however, this distorted results upward.

Middle East led results with a 9.5% increase and all cities reporting positive results. In North America, dominated by the U.S., only the holiday destinations in Florida saw an increase in international traffic, whereas Atlanta and Dallas Fort Worth remained flat, and traffic at Chicago, Los Angeles, Sacramento, San Jose, Toronto and Vancouver decreased.

In Latin America, although Mexico City was down by 3.8%, other destinations reported increases in international traffic including Buenos Aires, Cancun, Lima, Montego Bay, Montevideo and Rio de Janeiro. The effects of the H1N1 virus on April results are seen as minor since the outbreak only occurred at the end of the month. It is anticipated that there will be an impact on May traffic numbers.

Freight traffic is still severely impacted by the world economic depression, with international freight down by 23% and domestic traffic down by 9.5%. Worldwide traffic fell by 18.4% for April, as compared to 19.4% for the first four months of 2009.

World Airline Industry to Lose $9 Billion this Year

The International Air Transport Association (IATA) revised its airline financial forecast for 2009 to a global loss of US$9 billion. This is nearly double the association's March estimate of a US$4.7 billion loss, reflecting a rapidly deteriorating revenue environment.

IATA also revised its loss estimate for 2008 to US$10.4 billion from the previous estimate of US$8.5 billion.

"There is no modern precedent for today's economic meltdown. The ground has shifted,"said Giovanni Bisignani, IATA's director general and CEO in his State of the Industry address to delegates of the IATA AGM. "This is the most difficult situation that the industry has faced."

Recession is the most significant factor impacting the industry's bottom line. IATA's revised forecast sees revenues declining an unprecedented 15% (US$80 billion) from US$528 billion in 2008 to US$448 billion in 2009.

Air cargo demand is expected to decline by 17%. In 2009, airlines are forecast to carry 33.3 million tonnes of freight, compared to 40.1 million tonnes in 2008. Passenger demand is expected to contract by 8% to 2.06 billion travelers compared to 2.24 billion in 2008. The revenue impact of falling demand will be further exaggerated by large falls in yields-11% for cargo and 7% for passenger.

PEOPLE IN THE NEWS
John Gibson Named Prince George CEO

The Prince George Airport Authority recently announced the appointment of John B. Gibson to the position of president and chief executive officer for the PGAA, effective July 1, 2009.

Mr. Gibson comes to Prince George from the Hamilton International Airport, where he has held the position of vice president of marketing since 2001. Under his leadership, Hamilton has seen a tremendous growth in both passenger and cargo business.

Prior to Hamilton, Mr. Gibson held senior positions in air cargo with Canadian Airlines International, where he was general manager - cargo international. In this role, he successfully developed a series of cargo initiatives in Japan, Asia, South Pacific, South America, and the United States. Furthermore, he has also been chair of the Canadian Airports Council Cargo Sub-committee.

Mr. Gibson has been in the aviation industry for the bulk of his career, first with Pacific Western Airlines and then with Canadian Airlines International. He holds a masters of business administration from the University of British Columbia and carries many affiliations in variety of aviation organizations.

ACI-NA Welcomes Sheila Owens as VP Communications and Marketing

Airports Council International-North America (ACI-NA) recently announced that Sheila Owens, former vice president of strategic communications for the Newspaper Association of America (NAA), has been named ACI-NA vice president of communications and marketing.

Owens replaces Eileen Denne, who is relocating to Little Rock, Ark. in late June.

"Sheila is a great addition to the ACI-NA team," said Greg Principato, ACI-NA president. "Her extensive communications experience will greatly benefit airports in ensuring that the industry's perspective is understood and appreciated by policymakers and the traveling public. We are fortunate to have her working with us."

Owens brings more than 15 years of experience in media relations, social media, website management, brand management and marketing to ACI-NA. Before joining NAA in 2002, Owens worked with Freedom Forum/Newseum, International Food Information Council and Gannett Company/USA Today.

CANADIAN NEWS
Waterloo Celebrating 100 Years of Powered Flight in Canada

Waterloo-Wellington Flight Centre announced it will celebrate 100 years of powered flight in Canada at the Waterloo Aviation Expo & Air show on August 29th & 30th.

The event is expected to attract more than 10,000 visitors from as far away as Buffalo and Detroit. Featured air show performers will include Julie Clark in her T-34 Mentor, the Tiger Boys from Guelph flying their Tiger Moths, Air Cadets squadron performing a glider demonstration, and the Canadian Harvard Formation Team.

The Aviation Expo is a two-day aircraft exhibition presented by Waterloo-Wellington Flight Centre, located at the Region of Waterloo International Airport just east of Kitchener Ontario. The primary focus of the event is to promote awareness of general aviation and celebrate the advancement of aviation technology in Canada over the last 100 years, accomplished through hands-on exposure to aircraft displays and pilots.

The Aviation Expo and Air Show will be held on August 29 and 30, 2009 from 9 Am to 5 PM daily, and will feature:

Historical exhibits: Thematic pods of aircraft from the main eras of aviation development
Military Aircraft: Static display of Canadian Forces aircraft
Tradeshow Vendors: Booths featuring aviation equipment, merchandise and memorabilia
Airplane, Helicopter and Balloon Rides: Local sightseeing flights in light aircraft and helicopters
Air show: 90 minute air show featuring air demonstrations and aerobatic performers

Gates open at 9:00 AM and close at 5:00 PM each day. Advanced tickets will be available online soon at waterlooairshow.ca (presently under construction).

INTERNATIONAL NEWS
Air Carriers Commit to Carbon Neutral Growth by 2020

The International Air Transport Association (IATA) recently announced that the airline industry is committed to achieving carbon-neutral growth by 2020.

"Two years ago we set a vision to achieve carbon-neutral growth on the way to a carbon-free future. Today we have taken a major step forward by committing to a global cap on our emissions in 2020. After this date, aviation's emissions will not grow even as demand increases. Airlines are the first global industry to make such a bold commitment," said Giovanni Bisignani, IATA's director general and CEO in his state of the industry address to 500 of the industry's top leaders gathered in Kuala Lumpur for the organization's annual meeting.

The commitment to carbon-neutral growth completes a set of three sequential goals for air transport: (1) a 1.5% average annual improvement in fuel efficiency from 2009 to 2020; (2) carbon-neutral growth from 2020 and (3) a 50% absolute reduction in carbon emissions by 2050.

In 2009 the carbon footprint of air transport is expected to shrink by 7%. Of this, 5% is due to the recession and 2% is directly related to efficiency gains from IATA's four-pillar strategy. "No other industry is as united. And no other industry can point to such good results and progress," said Bisignani.

Bisignani noted that the airlines' commitment needed to be matched by governments, calling for a legal and fiscal framework to support the availability of sustainable biofuels. And IATA says governments must work with air navigation service providers to push forward major infrastructure projects such as a Single European Sky, NextGen in the US or fixing the Pearl River Delta in China."

U.S. House of Representatives Passes

FAA Reauthorization Legislation

Airports Council International- North America (ACI-NA) recently commended the U.S. House of Representatives for the passage of H.R. 915, the Federal Aviation Administration (FAA) Reauthorization Act of 2009.

Passed by a vote of 277 to 136, the bill authorizes USD $70 billion in funding for FAA capital programs in the U.S. between fiscal year (FY) 2009 and FY 2012.

ACI-NA's recently released capital needs survey shows that U.S. airports must invest USD $94.3 billion over the next five years on renovating and constructing infrastructure in order to keep pace with projected passenger and air cargo demand. Of the USD $70 billion authorized in the bill, USD $16.2 billion is approved for the Airport Improvement Program (AIP).

Additionally, the bill increases the passenger facility charge (PFC) user fee ceiling from USD $4.50 to USD $7.00, allowing airports to use locally generated funding to finance improvements. PFCs are used for the construction of new runways, taxiways, terminals and gates, which increase airport capacity, reduce delays and promote new competition and lower fares.

H.R. 915 also includes $13.4 billion for the implementation the Next Generation Air Transportation System (NextGen). NextGen would convert today's ground-based air traffic system into a more efficient satellite-based system.

ACI-NA says it looks forward to working with the Senate and the Obama administration to ensure that the legislation is enacted.

New York Slot Auctions Cancelled

U.S. Transportation Secretary Ray LaHood recently announced he would rescind plans for slot auctions at New York-area airports. The government will halt plans announced last October to withdraw a number of slots from airlines operating at airports in the New York region and auction the slots to the highest bidder.

The Air Transport Association, Airports Council International- North America and the Canadian Airports Council all had been in opposition to the plan to auction slots at New York's busy airports.

"Federally mandated slot auctions were a misguided attempt to substitute economic theory for airport proprietors' judgment. Airports, such as the Port Authority of New York and New Jersey, are in the best position to manage the use of the facilities they planned, built and currently operate to prevent passenger delays and congestion," said ACI-NA President Greg Principato. "They understand the role they play within their regions and are well-situated to respond to unique and ever-changing, local circumstances."

The CAC contended that the slot auctions would disproportionally impact service to Canadian centers due to the small size of most aircraft operated between Canada and New York.

Canada's Airports:
Working Together, Moving Forward

The Canadian Airports Council (CAC) is the voice for Canada's airports. Formed in 1991, as the devolution of airports to local control was beginning, the CAC has established itself as the reliable and credible federal representative for airports on a wide range of significant issues and concerns.

Canada's airports are engines for economic development in the communities they serve and one of their most important elements of local infrastructure: Our communities' vital links to intra-provincial, national and international trade and commerce. Our 45 members represent 150 Canadian airports, including all of the National Airports System (NAS) airports and most passenger service airports in every province and territory.

Together, CAC members handle virtually all of the nation's air cargo and international passenger traffic and 95% of domestic passenger traffic. The economic impact of CAC member airports is staggering. They create well in excess of $45 billion in economic activity in the communities they serve. And more than 200,000 jobs are directly associated with CAC member airports, generating a payroll of more than $8 billion annually.