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Airports authority tries to boost revenue

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The Winnipeg Airports Authority is using the expertise it gained from building an award-winning airport terminal to generate new revenue.

The corporation said Tuesday it recently landed a contract to provide airport-management consulting services to the Kelowna International Airport.

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WAA public affairs director Christine Payne said confidentiality provisions in the contract prevent it from disclosing how much it is being paid.

"But it definitely contributes to our revenues here," she said, adding the corporation is also looking to see if it can provide similar services to other airports.

"Any opportunity will be explored. It could be anywhere."

Payne said it's part of the WAA's ongoing efforts to generate new sources of revenue to help offset any future decline in revenue from its regular airport operations.

First-quarter financial results released Tuesday showed the WAA's revenues fell by $900,000 to $22.6 million in the first three months of 2013, and earnings before interest, depreciation and taxes declined $1.4 million to $11.2 million.

The WAA blamed the revenue decline in part on a 2.6 per cent drop in passenger volume during the quarter. The WAA said 23,460 fewer passengers passed throught the Richardson International Airport during the quarter -- 886,598 versus 910,058 a year earlier.

Payne said one of the contributing factors was a seven per cent decline in the number of seats offered by the carriers as they switch to smaller planes on some routes. As some of the airport's fees are based on passenger volume, that means lower WAA revenue.

Payne said the switch to smaller aircraft is part of an ongoing effort by the airline industry to better match plane sizes with passenger volumes.

"The industry as a whole has really been taking a closer look at supply and demand and rightsizing itself during this reduced-capacity era," she explained.

But that rightsizing can also lead to new opportunities to add capacity on some routes or extend service to new destinations where traffic volumes aren't big enough to support larger planes, Payne said.

She noted WAA officials are in ongoing talks with Air Canada and WestJet about including Winnipeg in the plans for their new regional airlines. The WAA has also had talks with Toronto-based Porter Airlines prior to Porter announcing recently it will be expanding its regional service to more than a dozen new North American destinations, including Winnipeg, by as early as 2016.

Payne said any expansion in service will generate more revenue for the airports authority. She said it's also diversifying its revenue streams by adding more retail tenants and encouraging more commercial development on the airport campus, including the construction of two new hotels -- an 80-room Grand Hotel that will be opening this year and a 120-room Courtyard by Marriott that will open in 2014.

The WAA is pursuing opportunities for increasing cargo shipments to Northern Canada, she said, adding the WAA's first-quarter cargo shipment numbers won't be available for another month.

Republished from the Winnipeg Free Press print edition April 24, 2013 B5

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