In what was overall a friendly review of the John C Munro Hamilton International Airport’s activity for 2012, some councillors at a recent GIC meeting nonetheless expressed concerns about lack of passenger service, the PFOS contamination issue and the lease agreement with TradePort International. Ancaster Councillor Lloyd Ferguson complemented Airport CEO Frank Scremin for the way the airport has successfully reduced noise complaints; but he told Scremin that he is not satisfied with the airport’s progress in attracting more airlines, particularly airlines connecting Hamilton with Ottawa and Montreal. “It’s time to stop talking about it (increased service) and start doing something,” he said. “We certainly hear the message loud and clear,” replied Scremin who says the problem is the complexities of persuading airlines to locate in Hamilton. “We are not just competing with Pearson airport,” he said, “we are competing with every airport in Canada.” He went on to describe an airline industry where the major players are constraining the availability of aircraft in order to keep demand and prices high. He noted that while WestJet is taking delivery of 10 new planes next year they are selling off a similar number of old planes. “Airlines place their aircraft capacity where they think they can get the most return,” he said. He told the committee that some airports offer price incentives and guaranteed revenue levels to attract airlines, but that such incentives tend to be short term; and once the incentives expire the airlines often leave. “We are trying to come up with incentives that are more sustainable in the long term,” he said. He pointed out that passenger traffic is on the rise at the airport mainly due to the attraction of sun destination charter operators like Air Transat who are adding new destinations from Hamilton this winter.
The committee was told that landing fees at Hamilton are 60 to 70 per cent less than Pearson. Councillor Ferguson asked the airport CEO what Hamilton Council can do to help attract more airlines and was told that airlines pay attention when they are confronted with a municipal delegation consisting of political leaders and, most important, business leadership. Councillors Brenda Johnson and Brian McHattie were advised that the long-awaited cleanup of PFOS contamination is awaiting approval of the Ontario Environment Ministry. The recommendation being considered is to dig up the soil contaminated by the fire fighting agent and to mix it with concrete in order to stabilize the material. Despite the polite tone of the discussion there was an undercurrent of what may be a significant issue in future relations with Trade- Port International—the airport operators based in Vancouver. Councillor Chad Collins signaled his desire to see the lease between the city and the airport opened up for re-negotiation. Several councillors voiced dissatisfaction with the secrecy that surrounded the original lease negotiations in 1996. In past members of council have criticized amount of the rent being paid to the city. This year The airport paid $290,000 in rent, representing 10 per cent of its net profit of $2.9 Million. Said Collins, “I would like to see council more hands-on in the negotiation of this lease.”
He also hinted at the possibility that council could enter into negotiations with a different operator, although sources familiar with the current arrangement say such a move would likely be difficult and expensive. When Hamilton privatized the airport almost 20 years ago the facility was costing the city more than $500,000 annually and generating little tax revenue. Figures supplied by the airport operator say there has been $179 Million in investments in the facility since TradePort took over, and that the city has benefited to the tune of $30 Million in from sources like property taxes on tenant facilities, revenue sharing and the elimination of the airport deficit. For its part the Airport operator also wants to reopen the lease in order to obtain a lease extension that it says would allow more capital investment to flow. From the comments of councillors, such an extension will carry a price tag.