Aviation experts speaking to delegates at the 2022 Union of British Columbia Municipalities (UBCM) Convention in Whistler painted a picture that shows an industry with multiple developments and airports across the province facing significant challenges.
Transportation consultant Rob Beynon, founder of Operation Economics, said the aviation industry faces what he called “real big structural changes” in face of several developments.
Beynon said airports and airport-related industries are struggling to fill jobs in the face of rising costs, low wages for individuals working in certain positions, and retirements. This shortage affects not only routine on-ground operations like baggage handling and security but also higher-end positions, leaving airports short of the necessary expertise to deal with an increasingly complex regulatory environment imposed by Transport Canada.
Another issue concerns geo-political stability. Russia’s invasion of Ukraine and the western-imposed sanctions on Russia have had an immediate impact on business, said Beynon. Tensions between the People’s Republic of China and Taiwan have also impacted operations, especially in western Canada. It is not clear how these tensions will further play out in the future, he said.
A third issue concerns rapid technological changes in the face of climate change.
Airlines will be shifting to airplanes powered by electricity and hydrogen, among other new fuels, within a relatively short amount of time. A move that will require airports to install new infrastructure to service those planes and their own operations. “Anything at airports costs millions,” he said in warning of uncertainty and significant cost increases.
On the other hand, airports have the potential to benefit from rising lease rates for land by virtue of their land portfolios, he said. But rising land costs outside of airport lands could discourage economic development.
These changes are happening against the backdrop of the immediate economic impacts of the COVID-19 pandemic and the looming recession. “A lot of the regional and smaller airports are just hanging out by the fingernails,” he said.
Dave Frank, executive director of BC Aviation Council, struck a comparable note in his often candid assessment and critiques of government policy.
“Everybody in this room should be right pissed off at the federal government’s airport capital assistance program,” he said. “They only invest $38 million a year into small airports for the entire country, which is about one-third of what is required. And if you come from a community without scheduled passenger service, you don’t even qualify. That is totally against supporting air ambulance services, emergency response, fire suppression, tourism development, remote and Indigenous community service, economic development (and) spatial justice.”
This approach by the federal government should upset small-town mayors, he said. “What it means is that if your small airport doesn’t have scheduled passenger service, it is crumbling and it’s living off depreciation and the end of life is happening out there.”
By contrast, he praised the British Columbia Air Access Program for supporting airport enhancements. “You are an idiot if you don’t plug into that program for your airport.”
That said, Frank noted larger airports are not immune, and added it’s amazing the aviation industry made it through COVID.
“Eighty-seven per cent of its business disappeared for basically two years,” he said. “Airports have no balance sheets left. They have no cash in the bank. And yet the federal government still charges exorbitant rents … If you believe our thesis, that airports and aviation are the most powerful socio-economic development infrastructure out there, why do we nickel and dime to death?”
Beynon and Frank made these comments during a clinic that also included presentations from Walt Judas, chief executive officer of the Tourism Association of B.C., and Rose Klukas, economic development manager for the City of Campbell River.
Judas stressed the importance of air travel for provincial tourism while Klukas identified the city’s airport as an important engine of local growth.
Audience members had heard earlier from Frank that Vancouver International Airport contributed $20.2 billion to total economic output before the pandemic. COVID-19 then led to the cancellation of a capital project worth $8 billion. “It hardly made a ripple in the news,” he said, adding the total economic output of Vancouver International Airport is twice as great as the Port of Vancouver.
But if YVR is the keystone, Frank said the importance of provincial airports and the aviation industry extends beyond scheduled passenger service. They include the aerospace industry in small communities like Powell River and emerging centres like Kelowna, educational and flight training facilities, general aviation, corporate aviation, and air ambulance centres.
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