Toronto Pearson Airport plans to grow into global mega hub

Dec 15 2016, 4:40 am

Officials with the Greater Toronto Airports Authority (GTAA) have high ambitions to grow Canada’s busiest airport into a global mega hub airport on the same calibre as the international airports of Hong Kong, Frankfurt, and Singapore. And this would be accomplished in less than 20 years – by 2035.

A report released earlier this month by the GTAA outlines plans to almost double air traffic at Toronto Pearson International Airport (YYZ) from 44 million this year to 80 million. However, it views a mega hub as an airport with 50 million passengers, of which at least 20 million are passengers from international flights, and connects to 80% of the global economy.

Currently, Pearson meets just one of the attributes; it has 25 million international passengers, but it needs to increase its overall passenger count by six million and global connectivity by 13%.

Transforming YYZ into a mega hub would help support 700,000 jobs in the airport area and account for 8.5% of Ontario’s GDP, up from 332,000 jobs and 6.3% of the province’s GDP today.

“Mega hubs are becoming increasingly important in facilitating routes and global trade,” reads the report. “The connecting passenger flows make routes viable for air carriers that local markets alone could not support. Such connectivity is a source of competitive advantage to the city-region, in which the airport is located, and it confers economic benefits to the country as a whole through the facilitation of greater trade, tourism and foreign direct investment.”

But for all of this to happen, a lot of work needs to be done to turn YYZ into a globally competitive airport – and it needs to be done quickly.

“Addressing these challenges and supporting Toronto Pearson in becoming a mega hub would provide a host of benefits to Canadians, including increased convenience, choice, improved access and competitive prices,” reads the report.

“There is a limited window of opportunity for Toronto Pearson to develop into a mega hub… Governments at all levels have a crucial role to play in helping Toronto Pearson to seize the opportunity to become a mega hub airport. By supporting the airport’s development, governments can advance their economic development and trade agendas while fuelling job growth and economic success locally.”

Ground transportation

The report identified three priority areas that need to be resolved urgently in order to be able to take hold of the “time-limited opportunity” given that other airports in North America are also closing in on the gap of becoming a mega hub.

Despite the recent turnaround in ridership of the Union Pearson Express, transit ridership at YYZ is relatively low with just 10% of all trips made by transit. This is significantly lower than existing mega hubs, such as London at 36%, Frankfurt at 33%, and Amsterdam Schipol at 40%.

YYZ aims to achieve a transit mode share split of 20% for passengers and 30% for employees, but as Union Pearson Express only has a carrying capacity of 800 passengers per hour from downtown Toronto there is a need for more multi-modal connections.

Additional transit options would also serve to significantly reduce severe road congestion in the roads leading to and around the airport.

Ease of security flow

The wait times for security screening at YYZ far exceed those experienced at mega hubs. According to the report, over 50% of passengers traveling through YYZ during peak times can expect wait times exceeding 20 minutes. This sharply contrasts with the wait times of Hong Kong International Airport and London Heathrow where 95% of passengers are screened within five minutes.

“Excessive wait times for security screening constrains passenger travel and hence limits the economic development opportunity of Toronto Pearson,” reads the report. “There is value in the time lost in security lines, and long waits increase the cost of travelling through the airport, causing some passengers to switch to other routes or elect not to travel at all. The longer the wait time, the less attractive it is to fly through Toronto Pearson.”

“As a result, the current state of security screening at Toronto Pearson may act as a drag on the airport’s growth potential and its ability to generate additional non-aeronautical revenue through retail, food and beverage.”

Funding provided by the federal government to help cover security costs has not kept up with rapid passenger growth. The GTAA proposes a one-time investment of $30-million in Canadian Air Transport Security (CATSA) infrastructure improvement funding, an additional $20 million in CATSA funding annually for additional CATSA officers to reduce processing times to 10 minutes for 95% of all passengers, and $5 million annually to add extra Canada Borders Services Agency (CBSA) officers to create a screening standard time of 20 minutes for 90% of all passengers during all times of the day.

Federal red tape

Major airports across Canada are owned by the federal government by operated locally by non-for-profit airport authorities. However, the federal government still charges an annual rent of $130 million for the GTAA’s usage of federal lands for the airport, a cost that is passed on to airlines and passengers.

For this reason, YYZ is consistently ranked as one of the most expensive airports for airlines to land a plane, which greatly reduces the airport’s ability to attract new airlines and routes.

Additionally, the federal government’s visa requirements for international passengers who are only simply transiting through the airport for a connecting flight are needlessly complex with three visa types. Certain passengers require electronic travel documentation while others need third party documentation or no documentation.

“If a transit visa application must be made before the flight, passengers are inconvenienced, and more likely to avoid transiting through that country,” the report continues. “Even if a transit visa can be obtained at the connection airport, it adds time to the transfer and inconveniences the passenger.”

“By creating a policy framework that supports the connection of international passengers, passenger volumes will grow as more passengers choose to connect through Toronto Pearson. As a result, the GTAA will achieve stronger nonaeronautical revenues.”

Kenneth ChanKenneth Chan

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