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AIRPORT PROFILES Last modified on September 6, 2012

Worth the wait

Dan McCue finds out more about the ambitions and ongoing development plans of Calgary International Airport.
Anyone who has ever doubted that good things come to those who wait ought to pay a visit to Calgary International Airport.

Long the gateway to western Canada’s oil, gas and tourism industries, plans to build a new, 14,000-foot runway at the airport have been in the works since the early 1970s.

At the time, the airport – which is also widely known to aviators, passengers and the general public by its IATA code of ‘YYC’ – was still  a fairly new acquisition of Transport Canada, the federal agency that oversees the nation’s transportation system.

Having bought the airport precisely because its previous owner, the City of Calgary, didn’t have the resources necessary for expansion, the agency set right to work building a new terminal to accommodate commercial jet traffic and assembling land for the addition of the runway.

The terminal opened in November 1977. Noise protection for the runway was put in place two years later. And then, the long wait began.

During the intervening years, the airport was privatised – a process that in itself took 10 years from announcement to completion – and blossomed into the engine of employment for more than 24,000 people in the greater Calgary area.

“It does seem that things take a long time to happen here,” chuckles Garth Atkinson, president and CEO of Calgary Airport Authority.  “The upshot is that we build facilities when we really need them.

“We’re not building this runway in anticipation of traffic. We’re building it because we really, really need it. Frankly, it can’t come soon enough for us. It’s going to give us a real boost in capacity.”

In fact, the runway – set to be completed in May 2014 – is but one aspect of the C$2 billion expansion of Calgary International Airport that also includes the construction of a new terminal.

When it opens in 2015, the new concourse will double the  airport’s square footage, while the new air traffic control tower  – currently under construction by Nav Canada, the agency  responsible for air navigation services in Canada – is rising outside Atkinson’s office window and is set for completion in December.

In the meantime, the airport authority is continuing to pursue a business strategy of developing industrial and business parks that complement – and utilise – the airport’s services.

And if this isn’t enough activity to make one’s head begin to spin, the City of Calgary is currently pouring concrete for the walls and roof of a new 620-metre tunnel that will pass under the new runway.

The C$294.8 million project, which will extend Airport Trail, a local roadway, is expected to be completed shortly before the new runway.

Ironically, the principal driver behind all this activity isn’t overhead – it’s under foot, in the oil fields and oil sands in the northern region  of Alberta, Canada.

Flush with oil money and largely unscathed by the global financial crisis, these are boom times for western Canada, and the changing face of the airport is perhaps the boom’s purest reflection.

Business development

Atkinson, an accountant by training, began his career at Toronto Pearson, and moved to Calgary nearly 30 years ago, inspired by news that the airport was about to be privatised.

“Of course, it didn’t happen quite as quickly as I expected,” he laughs. “They told me it would take six months, and instead it took  10 years. But I came over, initially as CFO, and, being a patient fellow,  I stuck around and eventually became CEO.

“We’ve been in business as the Calgary Airport Authority for 20 years now, and in addition to YYC, we also run Springbank Airport, which is a major reliever airport just to the west of town.”

Atkinson said he was drawn to airports by their eclectic nature, calling them a “different kind of business that has a lot of different elements”.

“What’s particularly interesting is the commercial and development side of things,” notes Atkinson, who reveals that the airport relies on three key sources of revenue – airport improvement fees, aeronautical/airport charges, and money generated from commercial activities.

Like an ever-increasing number of airports, Atkinson admits that his objective is to maximise the airport’s commercial revenues to keep its aeronautical fees and charges down.

The existing terminal has more than 135 retail, F&B and commercial outlets, which together with a 296-room hotel and Spaceport – a space-themed visitor attraction – currently ensure that the authority’s commercial income comfortably exceeds its aeronautical revenues.

And Atkinson reveals that the gateway is keen to develop commercial opportunities elsewhere on the YYC site.

“We’re a big land developer, possibly even the biggest developer of leasable land in Calgary,” he explains. “We’ve done a lot of that in the last 10 years, and we keep moving around the airport.”

The authority’s most recent activity in this regard is a new 300-acre industrial park that is already more than 50% leased.

“Later this year we’ll open a brand new cargo apron and cargo building, with a series of new fixed-base aviation developments on one side, and we’ll also have some logistics and warehousing development near the interior of the park,” reveals Atkinson.

“A big focus for us has been buying and assembling land, servicing it, and then moving quickly to the development and leasing phase.”

Looking out his window, Atkinson continues: “There’s definitely a synergy to all these activities. Generally, in our industrial parks, you’ll find activities that need airplanes and airside access, you’ll find some complimentary warehousing and logistics stuff, and there’s peer aviation activity, because Calgary is home to a lot of aircraft leasing and charter operations. In fact, it’s probably the largest airport in Canada for this type of operations.”

Atkinson attributes much of that activity directly to Alberta’s oil and gas sector. “It’s certainly contributed to our growth,” he says. “I mean,  Alberta is probably the most buoyant part of Canada because it is a resource based economy.

“We have oil, we have the oil sands, and Calgary has the highest number of head offices per capita in Canada, particularly in regard to the oil industry.”

All these factors contributed to a record 12.8 million passengers passing through Calgary International Airport last year.

He notes: “We serve the wealthiest city in the wealthiest province in Canada. The economy is good and expanding, and aviation growth generally follows the economy.”

New facilities

Atkinson says all of the new projects at the airport – the runway, the  terminal expansion, the tower and the parks around its perimeter have  been debt financed.

“We’ve issued a number of debt instruments in Canada over the past  10 to 15 years, and it’s generally proven to be a very successful model for us,” he says. “The market has been very receptive to our investments.”

One reason, no doubt, is that projects of such sheer size tend to excite  the imagination, no matter how practical the underlying reasons for the scale of the undertaking.

For instance, the new runway is 14,000 feet long for purely operational reasons – Calgary is located at 3,500 feet, the air therefore is less dense around the airport.

“We need to build longer runways just to give ourselves that extra lift on hot days in the summer,” explains Atkinson.

Similar common sense concerns also drove the size of the new terminal expansion. “It is primarily going to be an international/transporter concourse, and we’re building it because we simply couldn’t grow our current international facility any more where it is,” says Atkinson.

“The challenge is, in building this new facility, we need to move US pre-clearance and pick up and move Canadian Customs, and these are not things that can be done incrementally. You literally need to move these huge operations Sunday night and have them open Monday morning.

“So that’s one factor driving the size of this project. The other is that  we want this concourse to serve our needs for many years to come and we have to get it right, as it’s likely to be the single biggest development in the  airport’s history.”

Currently under construction and due to open in 2015, the new two million square foot facility will have 22 gates and its own 300-room hotel that will link the new and existing terminal facilities.

Green credentials

The new concourse will also serve as the centrepiece of Calgary International Airport’s sustainability efforts, with 476 geothermal wells for heating and cooling being incorporated into the building’s design.

The facility will also include a sophisticated energy-efficient baggage handling system for both inbound and outbound flights.

It will have an initial capacity of 4,000 items per hour on both in and outbound lines, and relies on sensor-controlled modules to power up the system only when the baggage totes are in operation.

In another nice touch, the airport has added five new Mercedes-Benz Smart Cars to its vehicle fleet for on-site use by personnel supervising all of the construction activity.

“Our basic approach to sustainability is that we are going to do things that make economic sense, and when you’re building a new facility, that’s the time to seize your opportunity and make it state-of-the-art,” comments Atkinson. “If you’re only doing something for the glory of it, you’re taking the wrong approach.”

Always evolving

Atkinson says that the airport has no intention of stopping to rest on its laurels once the current work is done.

“I’ve been here 30 years and I don’t think there’s been a single day when we haven’t been under some type of construction. We’ll do the ‘big build’, as we call it, then carry on with other stuff,” enthuses Atkinson.

“You know how it is, construction never stops at an airport; if you’re not expanding, then you’re working on things to keep them up to snuff.”

He adds: “The other thing is, we’re not slowing down on land development. We are already planning and developing the next phase of the new industrial park, even before the first phase is 100% leased. The market is good and we’re taking advantage of that.

“What it comes down to is this: Calgary is a big hub in Canada, and we also see ourselves as a large part of Calgary’s GDP – contributing an estimated C$6 billion to it last year. It is therefore vital that we do our job right because so much collateral business here depends on us.

“That’s our big focus – to get it as right as we can, stay ahead of the curve, and be an economic catalyst not just for Calgary, but for Western Canada. That’s important to us.”

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