Sunday reader: YVR plans to stay on top
It was a beaming Craig Richmond who posed with airport, airline, and passenger service staff in the terminal of Vancouver International Airport Monday. The airport’s Chief Executive Officer had just returned from London, bringing with him his facility’s 10th straight win as North America’s best airport.
While it’s a historic result, the continental success hides a darker reality; on the global stage, Vancouver is being left behind by newer, shinier, and fancier facilities overseas.
“A lot of the European airports, the North American airports have been pushed out of the top-10,” said Vancouver International President and Chief Executive Officer Craig Richmond in an exclusive interview with Western Aviation News. “And I think some of the budgets they have to work with are significant.
“Remember, we don’t get any money from the federal government. So everything you see here, everything we do, we’re all funded by ourselves. Either we are borrowing money to do it, or we’re using cash flow to do it. So sometimes you look and go ‘boy I wish I had the kind of money that airport has.'”
It’s not that the airport is poor; it started 2018 with almost $286 million in the bank. Vancouver gets a steady stream of passenger airport improvement fees, designed to fund expansion and capital investments, as well as concessions, airline fees and an assortment of other revenue streams.
The airport is going through a process it calls ‘hubification,’ an unglamourous term with an ambitious mandate: to become the place in Western North America where people connect to go from Canada and, increasingly, the United States, to Asia-Pacific countries. Every procedure, building renovation, and equipment purchase is being analyzed to see if it makes connecting easier and faster for the passenger, and more profitable for the airlines.
The airport served almost 26 million passengers last year, and Richmond believes there’s room enough to grow. “We think we can easily go into the 30s and up to 40 million with this terminal layout, adjusting it as we go, and the two parallel runways.”
“We can easily go into the 30s and up to 40 million.”
But that growth isn’t easy. At peak times, such as Christmas and during the summer tourist rush, Vancouver has run out of gates, and no more planes can pull up to the terminal. Instead, passengers have to be bussed to their planes, particularly on flights to Asia. The airport calls it Remote Stand Operations.
“We’ve actually had the same on-time performance with the bus service, and we’re getting the same passenger service numbers,” said Richmond. “You go out by bus, it’s literally four minutes, it’s not a 20-minute bus ride. When you come in, you actually get dropped off right at the end of customs.”
In its current expansion, YVR is adding onto the International pier. As well as four new gates with bridges to aircraft, the airport is incorporating four new remote stand gates where buses can pull right up to the terminal.
The buses add a certain layer of complexity to the operation, since passengers must pass through the usual gate procedures, go down an escalator, board a bus to be transported to the plane, then walk up a covered ramp to the aircraft gate. Generally, most airports avoid the procedure if they can, judging passengers would rather walk down a bridge and straight onto a plane.
Love them or hate them, Richmond indicates the buses are here to stay, reducing the need to further expand the terminal. In addition to the four remote stands west of the terminal, another 10 aircraft parking spots for RSO are being added to the east.
“We got 18 new gates, and we’re only actually heating and cooling four of them, so we’ve got a really good path to grow. So we haven’t spent $50 million a gate. In fact, D-pier expansion is about $300 million for eight gates; cheapest gates built in North America in the last 10 years.”
So far, Richmond says 20 of 56 airlines at the airport have used the busing operations, and while it wouldn’t be their first choice, he believes they’re warming up to the idea.
“We’ve had some airlines come in, they’re probably 95% origin-destination tourists, and they’re finding it’s not so bad,” he said.
“It gives us a huge way to manage both upside risk and downside risk. We’ve got great growth to grow if we need to, and if we don’t grow, we haven’t invested billions in a terminal that just sits there empty.”
At the same time, Richmond indicates not everyone will be asked to bus passengers to and from their planes.
“If you have a large proportion of connecting passengers, we’ll probably put you on the gate, because those connections can be very, very tight.”
That would indicate that Air Canada and Westjet, by far the biggest passenger generators at the airport, would likely not have to bus. Both use Vancouver as a connection point between Canada and international destinations.
While finding ways to hold the line on terminal growth, Richmond says Vancouver has runway capacity for generations.
“If you look at our runway layout, it’s exactly the same as [London] Heathrow’s, plus we have a cross-wind, and they’re at 75 million passengers. So with a double runway configuration, you can go a long time.”
Admittedly, there are more turbo-prop planes flying into Vancouver than to the British capital. Generally, however, the trend is to airlines flying larger planes to YVR. The Boeing 777, the largest twin-engine plane flying, is no stranger to the airport, serving on Asian, South Pacific, and some domestic routes.
“We’re still not even close, when I was the manager of airside, to how many takeoffs and landings we had, but yet we’re moving 10 million more people. Why? Big planes. So as that happens, it just pushes the requirement for another runway father into the future.”
While there are 56 airlines serving the city, Vancouver’s fate is increasingly tied to the rise and fall of just one – Air Canada. Out of $136 million charged in landing fees in 2017, almost $51 million came from Air Canada, whose main Western hub is in Vancouver.
And Air Canada is more than willing to play along. Its strategy is to grow its Canadian hubs, Toronto, Montreal and Vancouver, connecting them with other hubs around the world – good news for Vancouver. It’s telling that all three set passenger records the same year as Air Canada carried a record number of passengers.
In Vancouver, the growth has continued. For the first time in 2019, the airport handled more than two million passengers in the month of January, four per cent more than the previous year.
Just this year, Air Canada announced it would concentrate its Q400 fleet in the city this summer, marking a major capacity expansion to regional destinations, while offering new flights, such as service to Auckland, New Zealand in the Northern winter season.
Vancouver has more than $9 billion in capital spending planned over the next 20 years, invested in 75 projects, hoping, perhaps, to bring its string of best airport in North America wins to an even dozen, or even more.