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AIRPORT PROFILES Last modified on February 26, 2010

Forward thinking

Airport World discovers more about the five-year business development plan of one of Canada’s smallest gateways.

When it comes to naming Canada’s gateways, it is safe to say that few outside the province of Alberta would be likely to think of Red Deer Regional Airport in Red Deer County.

And it is not surprising really, because Toronto-Pearson and most of Canada’s other big gateways handle more passengers in one hour than Red Deer Regional Airport (YQF) can in a year.

However, like its big brothers, the airport has expansion plans and a route development strategy, and the recent decision to call upon the guidance of Deloitte & Touche and Jacobs Consultancy to help it prepare a five-year business plan, shows the airport authority’s determination to make YQF a success.

The business plan is designed to provide the stakeholders with a framework for the future development of the airport and to identify business growth opportunities. The survival of the airport is certainly seen as vital to the continued economic growth of the region, which is strategically located between Alberta’s two largest urban centres (Calgary and Edmonton).

The airport currently serves a host of charter operators and is the fourth busiest regional gateway in western Canada based on aircraft movements. At present, a Tier 3 operator (Northwestern Air Lease) provides scheduled passenger flights to Fort McMurray, while Swanberg Air recently introduced scheduled passenger services to Calgary, Edmonton and Grand Prairie in addition to its flights to Regina, Fort St John and Fort Nelson.

Air Canada/Jazz are among several airlines that provide weekly charter flights to the oil and gas project sites in northern Alberta.

The airport’s facilities include a tiny 50-passenger capacity terminal and two runways, the longest of which is 5,528ft long and capable of handling aircraft up to the size of Dash 8-100/300s. This is fine for now, but the airport requires a main runway of at least 6,500ft to attract regional jet services.

Past economic studies have forecast that YQF has the potential to grow from handling around 1,000 passengers annually today to 55,000 by 2020.

During the review for the business plan, it became evident that the present operation of the Red Deer Regional Airport was not sustainable in its current state. The need for an extensive amount of capital over the next five-years required the airport to aggressively pursue development opportunities to allow the facility to become financially self-sufficient.

In addition, some of the greatest potential threats to the YQF identified over the next few years are:
• Its close proximity to Edmonton and Calgary airports
• Lack of government infrastructure funding support
• Losing scheduled airline(s)
• Residential encroachment
• Economic recession

To this end, there is a need for the airport to attract and retain scheduled air services from a major carrier. The gateway must also make maximum use of its land that is not required for core aviation purposes and find new revenue streams to fund day-to-day operations and future capital programmes.

Furthermore, there is a need to build a closer link with the regional economy and stakeholders, as the airport authority cannot develop its business in isolation.

The study found that the most prudent choice for Red Deer Regional Airport is to pursue the launch of scheduled non-stop services to Vancouver and Kelowna which, if comes to fruition, could see traffic soar to 115,000 passengers yearly by 2013.

Northwestern Air Lease has announced an interest in launching flights to Kelowna and Abbotsford, British Columbia, this spring.

The airport is requesting about C$4 million for an overlay on runways, taxiways and the main ramp, plus related work. It is also seeking C$500,000 for more bays in the maintenance shop for equipment storage, and C$1 million to meet new Transport Canada regulations for lighting for low-visibility situations.

Indeed, if its scheduled route network is not expanded and YQF remains primarily a general aviation gateway, its primary stakeholders would ultimately have to operate the airport at a loss.

For YQF to achieve long-term financial sustainability, over the next five years it is also advised to: pursue ongoing opportunities for new scheduled passenger service; take advantage of industry affiliations and remain current with industry trends with respect to air service; work with the air carriers on a regular basis in an effort to improve scheduling and pricing levels; pursue affordable customs clearance capabilities; work closely with the stakeholders, local travel agents/associations, tourist attraction operators and Travel Alberta to develop a tourism marketing strategy; and identify and study, along with local travel agents and associations, opportunities for direct outbound charters to sun spot destinations.

Without doubt the Red Deer marketplace has the population base, economic activity and market demand to become a viable destination for scheduled service for one major carrier or several smaller Tier 3 carriers. When it happens is the only thing in question.

Airport World 2010 - Issue 1

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