Airport sales pose risks

I am a retired Transport Canada manager and an aviation and airports management consultant who devoted my career serving the principal goal of making air travel and civil aviation operations safe, efficient and cost-effective. I had the pleasure of working with so many colleagues in the airports and aviation industry who shared that same goal.

I think I can speak for most of us in saying I am concerned with the latest trial balloon floated by Prime Minister Mark Carney — that our four largest airports could be turned over to huge investment funds and multinational corporations to operate as airport authorities replacing the local, non-profit authorities now in place.

Concerns have already been voiced about increased costs for air travel.

These huge investors care only about return on investment, and so they will certainly be looking at ways to maximize profit.

That could include the sale of formerly-held public assets such as air terminal buildings to the largest carriers. It isn’t that big a stretch to conclude that monopoly positions could result, with smaller, regional carriers being forced to either pay increased usage costs (gate fees, counter lease costs, baggage area sub-leases, etc.) or having to build their own passenger processing facilities.

Care to guess where these costs will be recovered?

Levels of service are another factor to consider.

Should our two largest carriers, Air Canada and WestJet, create even larger hubs at their preferred airports, it is quite likely more flight routing decisions will take into account the desire to maximize utilization of these facilities to lower per unit costs.

Airlines operate on a cost per seat-mile formula and the key to profitability is ensuring revenue per seat-mile exceeds costs. If we think having to route through Toronto or Calgary to get anywhere else is an annoyance now, just wait until this consolidation intensifies!

Added to this concern is the fact that major carriers will likely decide to reduce or eliminate service to smaller, regional airpots, relegating those routes to the already beleaguered regional carriers. Again, costs to those smaller carriers increase, and are passed on to travellers.

My chief concern, however, is the eventual erosion of safety standards.

Huge investment bodies will be looking for ways to “unlock shareholder value” and cost-cutting will be the inevitable result. The annual runway maintenance programs, the provision of emergency response resources, the construction standards for critical facility elements (runways, taxiways, aprons, emergency access routs) will all be subject to cost-cutting measures.

Please don’t tell me that these standards will be sacrosanct because they are part of international aviation standards. I point to the recent crash of the Prime Air cargo jet at Miami International Airport, where the runway overrun area was certainly not to the standards expected, but was allowed because of local conditions.

Will new construction at these mega-authorities follow zoning regulations regarding protection of instrument landing systems and the setback requirements for structures? Will electronic equipment installations used by air traffic control and flight services stations be compromised by other structures? Will tower line-of-sight for ground movement control standards be compromised? What is clear to me is that there will be pressure from the investors to modify these standards so that profitable components can be accommodated.

The relationship between an airport and its surrounding community is vitally important as well.

Making sure that operations producing noise (engine maintenance and run-ups, for example) or other environmental impacts have to be located where they will not create local issues.

Building zoning and conformance to airport master planning principles are key to this co-existence, but will the mega-authorities pay any attention to these details, especially if it increases development costs, or reduces opportunity for additional profit?

The regulatory oversight of Transport Canada is touted as the salvation of this model.

However, in my opinion, Transport Canada’s role in regulating transportation industries has been steadily eroded over the years in favour of industry self-regulation.

This “fox-in-the-henhouse” approach has not served the public good. Rail disasters, airline malfeasance, interprovincial trucking fiascos and lack of water-based safety oversight are prime examples. We’ve not had a transport minister exercise real, effective regulatory clout in decades.

We now need our prime minister to stop thinking solely like an investment banker!

Stewart Fay writes from Winnipeg.