A ground game for winning in the air

Tuesday, December 4, 2012

Canadian airports are redesigning themselves in the global competition to become favoured transit hubs



You see them funnelling down the airport corridors: weary passengers getting off an overseas flight. But some will get right back on another international connecting flight.

It's the latter that major Canadian airports are particularly interested in these days.

International travel is one of the few areas of growth left in the air-travel industry. And hubs like Vancouver International Airport and Toronto's Pearson International not only compete with other regional airports, but with any in the world with connecting flights into Canada and the United States. For Vancouver, Seoul is as much of a rival as a North American gateway.

"We don't feel like we're competing against other Canadian airports. We feel like we're competing against Chicago and [New York's] JFK and Atlanta for those connecting travellers," says Keith Medenblik, senior manager of government affairs and stakeholder relations at the Greater Toronto Airports Authority, which operates Pearson.

"There is a lot of congestion at U.S. hub airports, and we have capacity to grow here." Pearson has a "Gateway" strategy, focusing, as other airports also do, on making customs and baggage clearance easier for connecting fliers (transiting passengers, in industry parlance). The faster the connections, the more travellers will want to fly through Pearson, and the more flights airlines will schedule, thereby increasing business for everyone.

However, airlines would like to see this evolve more quickly. "First off, we need transiting processes in place, so that we can be on a level playing field with the other global hubs," says Ben Smith, Air Canada's executive vice-president and chief commercial officer. "[We] are slowly getting there. Vancouver has got the majority of them. They are slightly ahead of Toronto. They've always been the forerunner of this area."

For instance, international passengers connecting through Pearson still have to collect their bags before going to the U.S.-bound flights. For its Terminal 1, the airport is installing a new baggage imaging and weight identification system for screening luggage, set to begin operating by early 2013. This would free transiting passengers from having to pick up their bags.

But Pearson has already reconfigured the terminal to bypass the headache of also having to go through Canadian customs en route to the United States. Connecting passengers from overseas now go straight to a special baggage carousel to get their luggage before proceeding to U.S. customs, bypassing Canadian customs. Rather than a static building, airport terminals are now made to be perpetually reconfigured to move people down various security-cleared, customs-cleared corridors.

Terminal 3, which also has connecting international flights, is less evolved. New connecting technology and processes aren't expected for another few years, the airport said.

As for international transfer times, Air Canada's transiting time from one international flight to another is about 65 minutes, according to Pearson. The time for connection from an international flight to a transborder one is about 85 minutes. "These are numbers that we want to bring down," Mr. Medenblik says.

By comparison, one of the gold standards for fast connections is Munich International Airport's Terminal 2, which has a minimum connecting time of only half an hour with an international carrier such as Lufthansa, according to the airline. Co-operated by the airline, the terminal has a high-speed baggage handling system and central control operation for connecting flights. This compares with Frankfurt Airport's minimum connecting time of 50 minutes, also seen as unusually fast for one of the world's busiest hubs.

Vancouver, meanwhile, already has new trial processes for connecting passengers, given the airport's heavy emphasis on Asian travellers often continuing to other destinations. "That's really the core market that we're targeting at this stage," says Larry Berg, Vancouver airport authority's chief executive officer.

Six international carriers participate in programs in which travellers are pre-cleared through Canadian customs and can go directly to U.S. customs without picking up their bag. "It used to be, you had to have two visas. Who wants to go to the trouble of getting a Canadian visa just to transit through an airport in Canada?" Mr. Berg says.

Passengers flying in on Cathay Pacific, Air Canada, Philippine Airlines, Japan Airlines, Air China or KLM Royal Dutch Airlines can use the faster trial service. Those on other airlines first have to go through Canadian and then U.S. customs.

"We're optimistic that we'll have a process that will really reduce the connecting time of passengers. If you can get it under an hour, then really it's more convenient for many passengers to transfer through [Vancouver] into North America than it is to go through San Francisco and L.A., the big gateways today."

But Toronto is just as much of a competitor and eating into Vancouver's business. As noted by Robert Kokonis, managing director of airline and travel consulting firm Air Trav Inc., Air Canada will be shifting some of its overall Asian business to Toronto. In the summer of 2012, 51 per cent of the airline's seats departing Canada for Asia were from Toronto; 45 per cent were from Vancouver. In the summer of 2013, 53 per cent of Air Canada's Asia-bound seats will depart from Toronto, 42 per cent from Vancouver.

So Vancouver's airport executives are drumming up business on other fronts, such as working in conjunction with the province of British Columbia out of an office in Hong Kong to do business.



Third of a five-part series looking at developments in the movement of people and goods in the era of rapid globalization.

On Friday: Solutions for improving pedestrian traffic in the urban jungle