Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

The Airport and The Ferries

with 15 comments

Two quite different modes – and the same issue.

The BC Liberals are currently sitting on their hands about the Macatee report on BC Ferries – which ought to make Vaughan Palmer’s exit interview with David Hahn worth watching. (Voice of BC Shaw Cable only 8pm tonight). The policy has been for the corporation to move to user pay – which means that fares have risen, and at the same time loadings have fallen. The corporation now says it needs to cut service to make the books balance – which some people might think would reduce use further, but the corporation points to empty ferries on supposedly socially necessary services.

I was thinking about doing another ferry piece – but maybe I’ve written all I have to say on that – when the news broke of the President of YVR talking to the Board of Trade announcing increased user fees to pay for yet more airport expansion. YVR also has a commercial remit – and has been steadily expanding since it was cut loose by the feds.

Mr. Berg said the “geographical advantage” that YVR has traditionally had, of being the closest, major West Coast terminal to Asia, is being rapidly eroded as new technology gives jets greater range.

Flights can now go direct to Asia from as far east as Toronto and Chicago, he said, showing a map that illustrated how jets arc over the polar region to drop down into a growing number of airports in China.

“With new aircraft and navigational technology, a lot more cities are accessible from Asia today. And these cities have figured out what YVR’s founders knew. Serving as a gateway can bring vast economic benefits to their communities … this [is a] dramatically different competitive landscape than we [faced] 20 years ago,” he said.

Mr. Berg said Edmonton is opening 12 new international gates next month and Calgary is building a new runway and 22 new gates for 2015.

“Neither Calgary nor Edmonton has the passenger traffic to fill those gates today – so guess whose traffic they are looking at?” he said.

Mr. Berg said YVR, which last year was named North America’s best airport at the World Airport Awards in Copenhagen, is fighting back.

But is raising fees the way to win more passengers? I will say that the airport is now much better than when the new arrangements were introduced, and when I visit other places, the contrast to the airport I departed from is usually very instructive. Not many places, for instance, offer free wifi all over the terminal. There is indeed a wider range of food available – but that I think is mostly because so many airlines now charge for airline food, an it is usually much better to buy before you board, not just on price but quality. That being said, the pulled pork sandwich on a fresh baguette I bought at Cancun Airport was better than anything I have eaten at YVR. And I carried half it onto the plane since it was so large, even though on an international flight food is provided at no extra charge. (On Air Transat the wine was free too, even if they did spill most of it on my nice clean khakis.)

Nothing is reported about the expected impact of airport expansion on the environment which might be a bit odd given that this weekend there is to be a protest about the jet fuel pipeline the airport’s fuel supplier wants to build across Richmond.  Other places – like London – have had to look further afield as local protests have stopped expansion i.e. the new proposed new runway at Heathrow. Generally we seem to be remarkably quiet about the impact of YVR. The last major set of complaints I can recall prior to the fuel pipeline coming from some new residents of Richmond who ought to have realized that they were buying property under a flight path.

But the similarity of Han’s and Berg’s approach to their respective jobs – only commercial results matter – make the user pay more should surely have similar results. What the Edmonton and Calgary expansions will do is enable people from those places to make direct flights rather than change planes. Indeed, we seem to be back in the transit debate territory about the inconvenience of transfers and the need for a one seat ride. But in the airline business, the original ploy of making everyone fly through a hub was quite quickly countered with airlines that flew smaller, cheaper to operate planes on direct flights. Indeed on sites like hipmunk you can readily see how competition for your business stacks up  using an indicator they call “agony”. The direct flight moves to the top even if it isn’t cheapest.

I am not at all sure that it is just the airport you leave from that decides the route – but certainly the airport operators at Abbotsford and Bellingham recognize that for a growing number of people having an alternative to YVR is attractive. I look at the border line ups, additional driving/bus or train ride and probable additional hotel night for an early morning flight as being significant deterrents to using SEATAC – but obviously if there is enough trade to fill a direct bus service, enough people disagree with me.

The other phrase that popped into my mind was the one that was used when Britain decided to nationalize parts of its transportation system “wasteful competition”. If we really are facing a continuing economic depression in North America, and pressures on airlines for reduce their environmental impact continue (such as the EU’s imposition of a carbon fee on jet fuel)  the airports could be competing for a static or even shrinking market. So those user fees could be paying for under utilized facilities.

Maybe I just pick times to fly when the planes are cheap, but I am not aware of any congestion at YVR right now. And quite often when I do find myself through the security theatre and with time on my hands, I tend to notice that most of the shops and services are in fact closed. So they may well be priced at the same level as places in town – or even offer things I can’t buy there (at one time book publishers would have things in airport bookshops long before the local stores) but if they aren’t open, my wallet will also stay closed.

For flights within BC the fee remains the same. And an extra $5 on the sort of money that has to be paid these days for longer haul flights may well not register with users. After all, the amount for fees and taxes now usually exceeds the quoted fare. And people are willing to pay more for better, more convenient services. But even so, it seems to me that Berg could be making the same mistake that Hahn did. Except YVR answers to no-one, unlike BC Ferries, which was supposed to be independent but turned out not to be.

UPDATE  31 Jan     It is well worth reading Bill Tieleman’s opinion piece in today’s Tyee

Written by Stephen Rees

January 26, 2012 at 11:30 am

15 Responses

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  1. A YVR VP got a pretty tough interview on the CBC, yesterday morning, I think. He iterated the strategy as bringing several Asian (China) carriers into Vancouver en route to the U.S. The question about clearing customs here was not asked. He suggested each plane brings 300 deplaners and 300 more boarders moving through the space. 200 jobs are added, I can’t remember, per carrier that signs up. And, there is a boon to tourism visits, entertainment and retail trade.

    Currently it’s a 60 to 90 min process to switch planes (transportation thinking to be sure). Cutting it down to 45 mins will make YVR more attractive to new carriers. The fee was treated in a bit of an off-hand manner. Shopping Malls in airports are big revenue getters, and getting us in 2 hours pre-flight plays into the retail strategy. They may want to cut back on the transfer time, but what was not said is that they don’t want to reduce the shopping dollars spent.

    lewis n. villegas

    January 26, 2012 at 11:48 am

  2. Peak travel periods at YVR were significantly relieved when cruise ships based in Vancouver were moved to Seattle and Europe. There is now plenty of year-round excess capacity at YVR.

    I don’t think that flights from Asia bring the economic benefits to Vancouver that Larry Berg would have us believe. Most airport jobs are near minimum-wage. Chinese air passengers probably consist of about 90% astronaut husbands taking a break from their PRC concubines to visit their wives, children and mansions in Vancouver. The other 10% consist of real estate speculators and some budget tourists on inexpensive Canadian package tours operated by companies based in China and Taiwan.

    Randobarf

    January 26, 2012 at 3:02 pm

  3. Randobarf – I do not think your comments on Chinese air passengers are based on any factual information at all.

    The main effort of the present initiative is to increase competition for passengers to and from other North American cities to use YVR as a “gateway”. People changing planes here do not pay the AIF nor will they spend much in the airport if it is efficient at speeding their throughput as all these investments are designed to do.

    Stephen Rees

    January 26, 2012 at 3:13 pm

  4. True enough about me taking wild guesses. I am basing my guesses on current flight schedules, seating capacity, estimated load factor, point of origin and wild random observation. Correct figures are not readily available. However, I would like to put forth the notion that YVR has become a type of commuter airport (by virtue of Vancouver having become the location of second homes for resident and non-resident wealthy PRC Chinese).

    I don’t see the point of Larry trying to sell the airport as a Gateway. I can see added air pollution from additional fueling and takeoffs but I don’t see high value being added in terms of passenger spending or airplane servicing.

    Randobarf

    January 26, 2012 at 3:48 pm

  5. Last time I was at YVR it was for a 10 AM Sunday flight back to Los Angeles. The non-American International section had absolutely no people whatsoever…of course, Asian flights from the West Coast like leaving the evening to arrive at a decent time, but still. We’re creating an even heavier peak to base ratio by having more gates to have more flights leave at exactly the same time. How about adding some more non-stop flights to Europe to fill in the off-peak times at the airport?

    Chris

    January 27, 2012 at 9:10 am

  6. Yes – direct flights to Paris, year round, would be welcome. But YVR does not determine such things. That is up to the airlines. Currently Air France and KLM code share so you have the choice of hanging around in Toronto, Montreal or Amsterdam. Air Transat does do direct flights, summer only and not daily.

    Stephen Rees

    January 27, 2012 at 9:41 am

  7. My understanding for the lack of year-round YVR-CDG flight is that Transport Canada opposes it to favor Air-Canada. I am not sure that is right but it is the aired story. (by the way CDG could be a better hub than AMS )

    On flight price, airlines companies like to blame it on taxes, but if you compare for example YVR-LAX (westjet), BLI-LAX (allegiant) and SEA-LAX (southwest), you will quickly find out that the before tax price from an US airport is ~$80 when it is $160 from YVR …

    The one way before tax pay one week parking at SEA,
    after tax, the difference add-up significantly, and if you are bringing your family to Disneyland or elsewhere in US, flying from US become quickly a non-brainer – add to that the more abundant flights, more flexible ticket exchange (for Southwest), able to better meet the need of the customer…

    and instead to stand-up in line (no camera, no cell-phone) at the YVR customs, you will wait at Peace arch sipping coffee in your car…and I have also noticed that YVR shops are closed most of the time anyway.

    On the gateway strategy, we shoudn’t dismiss to quickly the economic value of it…It has been a strategy pursued by HKG with Cathay, SIN with Singapore, and more recently DXB with Emirates (also AUH with Qatar)…and that has not worked to bad for them so far…but true it is a single horse gambling… and HKG is losing steam in face of increasing competition.

    Voony

    January 27, 2012 at 9:23 pm

  8. Re: Bill Teileman article in the Tyee

    Of course YVR is yet another opportunity to expose government corruption in British Columbia but the Airport Improvement Fee does not irk me. It’s a small price to pay for the very nice (and expensive) infrastructure improvements at YVR. It’s not as if airline passengers are being asked to give blood. Air travel is cheaper than it has even been and airlines are operating on razor thin profit margins that have converted the industry into a business model based on a continuous succession of airline bankruptcies.

    What is disturbing to me as an airport worker is the gross disparity between the wages of the airport executives and the wages of the airport workers including pilots, mechanics, ramp rats, groomers, security guards and catering workers, etc, etc. Larry Berg is presiding over what is essentially a third world ghetto with an intense focus on lowering the wages of everyone at the airport except the top airport executives. Wage cuts have been brutal. There are airport workers living in cars in the YVR parking lots. Security is a complete farce. Airport workers put on a happy face for the public but when they see Larry strutting through the airport in an expensive suit they are seething with anger and resentment.

    YVR workers are falling further and further below the poverty line in a very expensive city. What more do airline passengers want? What is the airport contributing to Vancouver? What is the point of expanding the airport traffic and therefore expanding the poverty? I think Vancouver would be better off with fewer flights and less air pollution and noise pollution.

    Vancouver is not a center of commerce and industry. Most of the passenger traffic at YVR is discretionary. A lot of it is commuter traffic to Asia. Why should anyone really care about a small difference in the cost of a flight at YVR? Why would anyone except Larry Berg and his pals support YVR as a gateway?

    Randobarf

    January 31, 2012 at 2:46 pm

  9. >>Due to rising fuel costs, [SFU professor Anthony] Perl sees flying becoming less of an option for the global population.<>”I tell people to go to their favourite travel website like Expedia, and pick your destination and dates, and hit the fare selector for first class, because that’s the price it will be in the future for travelling. And ask yourself if you will make the trip. Flying cheap will no longer exist as an option.”<<

    From the al Jazeera article, “The Scourge of Peak Oil”, July 2011.

    http://www.aljazeera.com/indepth/features/2011/07/201172081613634207.html

    Perl, in his book entitled “Transport Revolutions: Moving People and Freight Without Oil”, promotes the concept that building much larger airplanes that travel longer distances and land in fewer places will help keep flight possible, if not cheap, as conventional fossil fuels diminish. He thinks that Vancouver and Seattle could complete to build one giant airport with runways reinforced to take the weight of 1,000+ passenger planes, and the first one that does will ultimately displace the other as the premier landing spot in the Pacific Northwest.

    However, setting aside peak oil – even though it will profoundly affect all airports, not just those committed to blindly follow expansionist trends — the oceans are rising and YVR is situated on low, unstable, saturated ground in a flood zone to begin with. Just what is the long term plan for YVR anyway, and to what extent will it be accountable for these commonly-known supply side and environmental trends?

    So, that’s something to think about while reading Tieleman’s diatribe against anything not connected to the NDP, like the airport authority. Do a little more research, Bill. There’s more to transportation than user fees and political affiliation.

    MB

    January 31, 2012 at 2:51 pm

  10. MB, the components of jet fuel are produced and refined in the Alberta tarsands, which makes the tarsands the world’s largest source of jet fuel. There is enough jet fuel in the tarsands to incinerate the planet and there is no doubt that Larry and his pals at YVR have taken that fact into account in their proposal to promote YVR as a gateway.

    The Gateway Pipeline (is the name a coincidence?) from the tarsands can feed jet fuel to YVR as well as bitumen to China.

    Randobarf

    January 31, 2012 at 3:20 pm

  11. @ Rando, jet fuel may be shipped via the Trans Mountain (now Kinder Morgan) pipeline from Alberta, but so is unrefined diluted crude. It is a 24″ diameter pipe that carries multiple products. But that ignores the ultimate test of petroleum products: the price consumers and industry are willing or able to pay.

    Kinder Morgan is applying to twin the existing pipe on the same route from Edmonton through the mountains of BC and export more diluted crude from the tar sands via Burrard Inlet with far larger tankers than are currently used, which will result in the deep dredging of Second Narrows in future. This is separate from the Northern Gateway project which seems to be getting all the attention.

    You missed the point about the inevitable increase in prices in all fossil fuels as the result of peaking (and soon to decline) supplies of conventional cheap crude which currently comprises about 75% of all the petroleuam fuel in the world. Unconventional sources from tar sands, deep sea, and fracked shale deposits are not cheap, nor are they ever going to replace the loss of conventional oil because there just isn’t enough in the ground to supply the current world demand for 87 million barrels a day. Saudi Arabia is the world’s largest source of oil, all of it is the easy cheap stuff, and they plateaued in 2006. The price of oil is not controlled by Edmonton or Ottawa.

    The tar sands currently produce less than two million barrels per day, enough to keep the world economy ticking for — wow! — 53 MINUTES. They will top out at six million …… maybe. Extracting the tar from the sands and diluting it for shipment consumes horrendous amounts of natural gas. NG is another fossil fuel that is finite and ultimately subject to the price upheavals of supply and demand, and is one of the sands’ weakest dependencies (water is another) and the primary reason the tar sands are one of the largest point sources of emissions on Earth.

    Airlines and airports will be some of the first industries to suffer with any upward price trends in fossil fuels. There will be many, many more worldwide, not the least the long distant shipments of food.

    If you’re not troubled by this information, you should be.

    MB

    February 1, 2012 at 2:20 pm

  12. Please, please say it ain’t so! I GOT to be able to fly, at least once every 2 years, to Asia or Europe, for the next 30 years. Any chance that “they” will build again dirigible http://www.airships.net/dirigible
    or giant kites within the next 10-15 years?

    Swimming that far, even for a frog with great legs, is not really an option.

    Red frog

    February 1, 2012 at 10:31 pm

  13. Red F., maybe you could write a letter to Bombardier Aerospace to get cracking on some research. I’ll even co-sign the letter.

    MB

    February 2, 2012 at 11:03 am

  14. Stephen hasn’t opened up the next post for comments, so let me add it here:

    South Fraser OnTrax advocates for smart growth design principles such as making transit a priority and building neighbourhoods that provide a variety of housing options, from single-family homes to apartments.

    Skytrain and towers is not what most of us think of as “sustainable urbanism”. Neither are we looking to put people in apartments, something that has been happening in the suburban sprawl era.

    The idea that we have to become strata-fee bound in order to “save the planet” should be resisted. We can do fee-simple housing on a 16.5 x 120-foot lot. Within a 5-minute walking distance of a rail stop—say on the BC Electric R.O.W. where land today is mostly industrial use—we can house 20,000 in these urban houses. But, this would constitute the high-density core.

    On the periphery would be single family residential for a long time to come. Adding another 1 million to the metro region is just not enough growth to make it all an urban landscape. Suburban lands are here to stay for much longer than one generation, or twenty years.

    In case you haven’t noticed, the “south of Fraser community” is getting the second new bridge in a generation. The Gateway project is what is going to drive growth south of Fraser at a rate far greater than transit. Furthermore, what that transit may be is still up in the air.

    One of the functions of transportation is to make a wider footprint of land available for urban development. To spread the reach of walkability. Not to put people in apartments.

    lewis n. villegas

    February 6, 2012 at 7:14 am

  15. Lewis – the reason the next isn’t open for comments is that it is going to be taken down after the event. So I will leave your off topic post here for now, but it should not stay either

    Stephen Rees

    February 6, 2012 at 9:44 am


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