The Winnipeg Airports Authority is about to embark on the largest project outside its Winnipeg airport campus -- management of a brand new airport in Iqaluit.
The WAA is part of a consortium that won the $300-million development project -- beating out other groups that included representation from the Edmonton and Halifax airports.
The plan calls for the group, of which the WAA is a junior partner, to design, build, finance and operate the new airport in Iqaluit, the capital of Nunavut.
The WAA's main contribution includes a 30-year management contract to run the airport.
'It costs as much to clean a runway here as it does in Calgary, but we have a lot fewer flights. We have to get creative to find other ways of bringing revenue into the coffers'
Barry Rempel, the WAA's chief executive officer, said engagement in a project like this fulfils a couple of elements of the WAA's mandate.
"One of them is revenue diversification," Rempel said. "We have an objective to make sure we are in the middle of the pack in terms of costing to carriers. But Winnipeg is a fairly small market and it costs as much to clean a runway here as it does in Calgary, but we have a lot fewer flights. We have to get creative to find other ways of bringing revenue into the coffers."
The WAA's connection to the project came about through an accidental meeting between Rempel and an official with the Canadian division of a large French construction company called Bouygues Building Canada (BBC). Rempel said the WAA's experience with its own $585-million terminal redevelopment, as well as winter-weather operation, gives it the kind of credentials to run a new airport in Iqaluit.
Bouygues is the lead component of the Arctic Infrastructure Limited Partnership, whose membership includes a finance company from New York, a runway-construction company from Quebec as well as the WAA.
The group is in the process of marketing a $140-million bond offering to finance part of the construction costs. Another $77 million has come from the federal government.
John Hawkins, the director of the airport, which is owned by the territorial government, said no real upgrade has happened since the mid-'90s. Since then, the population of the town has almost doubled, it's become the capital of Nunavut and passenger traffic at the airport has almost tripled.
"The airport is enormously busy compared to that time and not one aspect of it is really working very well as airports should," Hawkins said.
He said there was no way to address the many deficiencies without actually starting from scratch.
Construction is likely to start next spring and is scheduled to be completed in 2017.
The CIBC is the lead underwriter for the bond offering, the same firm that sold the WAA bonds used to finance its new terminal at Richardson International Airport.
The other part of the mandate the WAA's participation in management of the Iqaluit airport fulfils is network development.
"One way to do that is to develop a network of airports," said Rempel. "We believe strongly that the North is going to be very important to Canada. As we go forward, we are trying to find ways to make sure Winnipeg is well-positioned to be involved. Like someone told me once, in a gold rush you want to be the guy selling the shovels."
Garth Smorang, chairman of the WAA board of directors, said Winnipeg has a traditional connection to the North."Our direction to management is to grow the airport's involvement in the North," he said. "We're not just adding to lines of connectivity that could lead to increased cargo and passenger traffic in the North, but we're also using the expertise we have to build a new terminal and exporting that to Iqaluit."
There is already some headway being made in northern resupply traffic from the Winnipeg airport.
Last year, the North West Company started chartering one or two 767 cargo jets per week flying from Winnipeg to Iqaluit with general merchandise for its Baffin Island stores.
Mike Sorobey, the NWC's vice-president of logistics, said the new supply route to Iqaluit -- that will service NWC stores in other Baffin Island communities such as Arctic Bay, Cape Dorset, Clyde River, Igloolik and Pond Inlet -- saved the NWC about $600,000 in the first year of its operation.