Chair & CEO
A Message from the Chair & CEO
2016 marked another successful year of growth and development for the St. John’s International Airport. The demand for air travel increased last year with the total number of passengers travelling through our gates reaching close to 1.6 million, a 4.3% increase over the previous year. We also experienced the busiest summer in our 75 year history as an Airport when we welcomed 836,000 passengers between May and September. This is a testament to the strong tourism product that our region has to offer.
Our airline partners helped facilitate this growth by adding new flights and new destinations, both within Canada as well as internationally. An exciting development was the launch of our third European destination last year when WestJet commenced its daily summer service to London Gatwick. This is in addition to its summer service to Dublin, Ireland and Air Canada’s year-round service to London Heathrow. We are proud to state that we have more daily flights to Europe than any other airport of our size in North America; a strong contrast to where we were just over five years ago.
We were also successful in increasing our airline seat capacity to the most frequented US destination: Florida. A new service to Orlando was introduced, and WestJet extended its service to a year-round offering. WestJet also announced the launch of a new weekly service to Tampa Bay, Florida during the peak sun season in 2017. While only operating for a very short season to start, it will be warmly welcomed by the thousands of Florida-loving sun seekers who have been demanding a direct flight to Tampa for more than 15 years.
The strong partnerships we’ve developed with our stakeholders in the business and tourism sectors has helped to support existing services and to encourage airlines to invest in new routes. We will continue to rely on these partnerships to achieve mutual goals that will result in the growth and development of our community.
Expansion and Improvement Program
From our humble beginnings as a military airport, we have seen tremendous advancements and changes to our infrastructure and facilities. The completion of the Airfield Accessibility and Safety Initiative this past year will undoubtedly be recognized in history as having one of the most profoundly positive impacts on the safety and reliability of our Airport. As a region that is often plagued by prolonged periods of low visibility, the installation of Category III Instrument Landing Systems has already begun to remove our Airport’s reputation for being inaccessible, especially during the Spring foggy season.
We were pleased to announce the completion of this project ahead of schedule and on budget in January 2016. The results of the first year of operation also exceeded our expectations. Given the frequency of low visibility weather we saw in 2016, we would have expected to see 980 flights affected by delays, diversions or cancellations. With the installation of our new landing systems, however, there were fewer than 40 flights affected in 2016 – and most of these were because the aircraft was not equipped with compatible technology to allow the use of the new systems. As our airline partners continue to upgrade their respective fleets over the next few years and introduce new aircraft with this capability, we can expect the accessibility of our Airport to improve even further.
Over the last year we completed and submitted our new Airport Master Plan to Transport Canada. This Plan, coupled with the Land Use Plan, provides the framework to guide the development of the Airport, and ensures future improvements are undertaken in a responsible manner with regard to operational efficiency, safety and security, environmental compliance and financial viability. While it indicates the ultimate build-out of the Airport, the projects included in the Master Plan will be implemented on a case-by-case basis where a strong business case for each project exists.
Substantial progress was also made on our 10-year Expansion and Improvement Program over the last year. 2016 was the second busiest year for capital projects in the Airport Authority’s 18 year history with significant progress made on our largest capital project, the Terminal Building Expansion. With a total investment of $35 million last year, improvements and enhancements were made on the airfield, in the parking lots, and particularly on the expansion of the Terminal Building. These projects and those planned over the next 10 years are necessary to ensure the safety and operational integrity of the Airport, and to expand our facilities to accommodate 2 million annual passengers.
An economic engine
Our mandate as an Airport Authority states that we must provide our region with a safe, cost-efficient transportation facility that is a catalyst for economic growth. Over the past year we conducted an Economic Impact Study to measure the value of our Airport to the local and national economy. The study revealed that the annual operations of the Airport have the following impacts on our national economy:
Person years of employment
Million dollars in wages
Million dollars in GDP
Million dollars in economic output*
*(this is the gross dollar value of industrial output produced and reflects the spending by firms, organization and individuals.)
While these numbers are substantial, they do not recognize the wider economic benefits our Airport offers through its facilitation of trade and investment, and its enhancement of the productivity of other business sectors.
Growth in non-aeronautical revenue
While our development plans are sizeable, we have taken a very conservative and measured approach to ensure our long-term financial sustainability. We have a number of credit facilities in place and have maintained a positive A1 bond rating from Moody’s Investor Services since 2007. Our strong Financial Plan also recognizes the importance of diversifying our revenue streams away from just aeronautical sources. In 2016, we received 54 percent of all revenue from non-aeronautical sources; a ratio that is much higher than the North American airport average of 45 percent. We will continue to look for new sources of revenue that do not add unnecessary expenses to our airline partners and passengers.
Revenue from non-aeronautical sources
Who We Are
St. John’s International Airport Authority
We will create an
exceptional airport experience
at Newfoundland & Labrador’s premier gateway.
Community Leader | Enabling Prosperity
St. John’s International Airport Authority is a private, non-for-profit corporation that exists to provide a safe and efficient transportation facility at Newfoundland and Labrador’s premier transportation gateway.
We generate our own revenue, raise our own capital, pay municipal taxes, and pay rent to the Federal Government on an annual basis to operate the airport on behalf of the community we serve. We are committed to offering an outstanding airport experience for our passengers and enhancing the economic and social well-being of our community.
Board of Directors
Back Row (L-R): Jim Heale, Holly Hicks, Darren Martin, Gail Carroll, Mike Donavan, Jerry Byrne, Roger Butt
Front Row (L-R): Neil Pittman, Art Cheeseman, Tom Williams
Strategic Business Plan Update
The Airport Authority’s 2015-2019 Strategic Business Plan defines the Authority’s ideal future and includes objectives and strategic initiatives that will serve as our guiding framework that will lead to our vision of providing an exceptional airport experience at our province’s premier transportation gateway. This report provides an update on our progress associated with the seven strategic objectives: Outstanding Facilities; Exceptional Passenger Experience; Focused Business and Air Service Development; Culture of Engagement; Enhanced Community Partnerships and Collaboration; Organizational Effectiveness; and Financial Stability.
Objective: Deliver new, improved, and expanded air terminal building and related airport facilities to meet 2020 demand.
A total of $35 million was invested in 2016, making it the second busiest year for capital projects in the Authority’s history.
The St. John’s International Airport continues to experience passenger growth and, to meet these growing demands, significant investments in the improvement and expansion of its facilities are in the process of being made. A total of $35 million was invested in 2016, making it the second busiest year for capital projects in the Authority’s history.
Airfield Accessibility & Safety Initiative
One of the most significant projects identified in our Improvement and Expansion Plan as having the most positive impact on the reliability of air service at our Airport was the Airfield Accessibility & Safety Initiative. After three years of construction that involved a $37.3 million investment, the project was completed ahead of schedule and on budget in January 2016. This initiative was a significant undertaking and has exceeded expectations with its impact on flight operations during low visibility conditions.
Our Airport is the only Canadian airport serving less than 10 million passengers annually to employ Cat 3 ILS technology.
This project included significant improvements to the airfield to support the implementation of a Category III Instrument Landing System (Cat 3 ILS) on both ends of the primary runway (Runway 11/29), as well as the installation of Runway End Safety Areas (RESAs) on two of the Airport’s largest runways. This technology was installed by NAV Canada and allows aircraft to land and take-off in conditions of very low visibility; a weather challenge that has had an impact on our Airport’s operations and our region’s reputation for decades. The Airport was the first in the world to install LED lights on the Cat 3 ILS approach towers as well as being the only Canadian airport serving less than 10 million passengers annually to employ this technology.
920 flights that would have previously been impacted by low visibility conditions were able to operate on schedule.
After its first full year of operation, the newly installed Cat 3 ILS exceeded expectations in the improvement in the reliability of flight operations at the Airport. The initial study that was conducted to determine the benefits of its implementation at St. John’s International Airport estimated 1000 flights and 100,000 passengers annually are impacted by low visibility conditions. With the implementation of Cat 3 ILS, it was estimated that the impact on flight operations would be reduced to 300 flights and 30,000 passengers each year. While 2016 was perhaps less foggy than an average year, an estimated 920 flights that would have previously been impacted by low visibility conditions were able to operate on schedule as a result of this newly installed technology. Less than 40 flights were impacted due to low visibility conditions in 2016, exceeding expectation. Moreover, the positive impact on flight operations has begun to reverse the region’s reputation for being an inaccessible location.
The required infrastructure improvements to support the installation and operation of this advanced technology was cost-shared between the St. John’s International Airport Authority, the Government of Newfoundland and Labrador, and the Government of Canada under its Atlantic Gateway and Trade Corridor Strategy, while NAV Canada owns, operates and maintains the instrument landing equipment.
Airport Terminal Building Expansion
Construction on the expansion to the Airport Terminal Building commenced in 2014 and, when completed in 2021, will more than double in size to total almost 400,000 square feet. The expansion is being conducted in two phases:
Phase one of the expansion, the East Expansion, will increase the size of the Airport by 145,000 square feet and will improve functionality as well as enhance the level of services for passengers, tenants, and airline partners. The additional space will accommodate an expanded check-in area and a larger pre-board screening area located on the first floor. It will also double the size of the existing Departures Lounge to accommodate more seating and double the number of washroom facilities. The increased space will also increase the food and retail options to seven new food outlets, including a full-service restaurant, and five new retail outlets. For families, the expanded Departures Lounge will include a new children’s play area and offer a nursing mother’s area. This first phase of the expansion is both on schedule and on budget for its Spring 2018 opening.
The second phase of the Terminal Building expansion will add 72,000 square feet to the west end of the building. This expansion will focus on the arrivals area and will include an expanded area for customs activities, additional baggage carousels; more aircraft gates and passenger loading bridges. The Departures Lounge will continue to see improvements with expanded space for more seats, food outlets, and new washroom facilities. Construction will commence in 2018 and is set to be completed mid-2021.
Expanded road network and parking lots
While renovations and expansions are underway inside the Terminal Building, improvement projects continue outside the Terminal. Last year saw the opening a new, four-leg roundabout, located at the entrance to the Airport at the intersection of World Parkway and Navigator Avenue. A number of new developments planned for the area, including a service (gas) station, a rental car facility and a second hotel, as well as growth in the number of passengers travelling through the Airport is anticipated to increase traffic volume on World Parkway. The roundabout was installed to efficiently manage traffic flows in and around the Airport.
Adjacent to the roundabout is a new wi-fi-enabled Cellphone Waiting Parking Lot. The new lot allows those greeting passengers to park in the lot for free, removed from the busy curb front of the Terminal Building. Passenger greeters can use this parking lot to await a phone call from an arriving passenger prior to proceeding to the Terminal Building for a quick pick-up from the curb.
Additional groundside improvements realized last year include the completion of the new exit road from the Airport Terminal Building to World Parkway; new employee, rental car and gold pass parking lots; as well as the expansion of the short-term parking lot to respond to increased requirements for vehicle parking. While the position of the rental car parking lot is in its permanent position, it is temporarily located further away from the Terminal building during the various phases of construction. Over the last year significant investment was made in the installation of a lighted, covered walkway to protect those commuting between the rental car parking lot and the Terminal building from weather elements. Once the second phase of the expansion to the Terminal Building is complete, the rental car parking lot will be physically closer to the arrivals area of the building.
Considerable investments were also made in 2016 to enhance safety and security at the Airport, including the installation of raised sidewalks in front of the Terminal Building that improves the visibility of pedestrians, as well as the construction of a new facility that enables all vehicles entering the secure area of the Terminal building apron to be screened by security personnel.
Exceptional Airport Experience
Objective: Provide an exceptional passenger experience at our Airport.
The St. John’s International Airport Authority is dedicated to providing a positive experience for all guests at our Airport. We take pride in our role as the premier transportation gateway to and from Newfoundland and Labrador, and understand the lasting effect of a positive first and last impression. We therefore continue to seek ways to make improvements and enhancements to the level of service offered at our Airport.
In 2016, we achieved an 83.4% overall passenger satisfaction rating.
Business Plan Summary
2016 Capital Program
The Airport Improvement and Expansion Plan that was announced in 2014 is progressing as planned with the Airport Terminal Building East Expansion scheduled for opening in 2018. Significant progress in 2016 included completion of the building envelope, connecting the building envelope to the existing terminal building and significant advancement of the internal finishing. Other projects involved the construction of a Non-Passenger Vehicles Screening Facility as required by Transport Canada; expanded vehicle parking lots and roadways; and the development of a two-lane roundabout to facilitate the steady flow of traffic to and from the Airport.
2016 Actual vs. Business Plan
(in thousands of dollars)
|Revenue (Note 1)||$45,981||$46,222||($241)||Lower AIF revenues due to more connecting non-AIF paying passengers.|
|Expenses (Note 2)||$26,105||$27,920||($1,815)||Lower salaries and benefits expense due to the year-end actuarial pension adjustment.|
|Capital (Note 3)||$35,096||$40,595||($5,499)||Certain projects were deferred until 2017 including East End Parking Area/Loading Zone and Hold Bag Screening System Expansion.|
Note 1. Revenue includes net AIF and operating revenue.
Note 2. Expenses include interest and exclude the non-cash items of depreciation and amortization.
Note 3. Capital includes the Airfield Accessibility and Safety Project expenditures net of government funding received and receivable.
Planning for Growth (2017-2021)
We have completed a long-term infrastructure plan to address capacity constraints and to accommodate the approximately 2 million annual passengers forecast by the year 2020. Over the next five years the Airport Terminal Building will be expanded in two phases, with the first phase scheduled for completion in 2018, and the second phase completed in 2021. A long-term Financial Plan was also prepared in order to support the investment in infrastructure improvements, and includes future borrowings in the form of a private placement bond and credit facilities.
Business Plan Forecast 2017-2021
(in thousands of dollars)
|Revenue (Note 1 & 2)||$49,669||$52,422||$54,389||$56,331||$58,311|
|Expenses (Note 3)||$29,556||$31,637||$33,030||$34,708||$36,225|
|Capital (Note 4)||$39,731||$22,563||$20,169||$24,999||$22,782|
Note 1. Assumes passenger growth will be 2.0% in 2017 and 1.5% each year thereafter.
Note 2. Revenue includes net AIF and operating revenue.
Note 3. Expenses include interest and exclude the non-cash items of depreciation and amortization.
Note 4. Capital includes the expansion of the Airport Terminal Building, additional aircraft bridges and the expansion of the hold bag screening system.