Presentation to The Chartered Institute of Logistics and ... · more. While the low Canadian dollar...

CILTNA Presentation Updated March 17, 2016

Presentation to The Chartered Institute of Logistics and Transport Terminal City Club – 837 W Hastings St., Vancouver, B.C. Tuesday, March 22, 2016 (register 11:30, lunch begins at 12:00) Audience: • Sponsored by InterVISTAS and Cruise Lines International

Association

• Approximately 75-100 people in attendance

• Robert Andriulaitis – VP, Transportation and Logistics Studies, InterVISTAS Greg Wirtz – President, Cruise Lines International Association

Speaker: Craig Richmond, President and CEO, Vancouver Airport Authority Purpose: To provide a snapshot of YVR—past, present and future—and learn how we can serve The Chartered Institute of Logistics and Transport. Notes


Thank you [Name]. And thank you everyone for being here today. I’m very pleased to have the opportunity to present to The Chartered Institute of Logistics and Transport.

So, why am I here? I have been asked to present a snapshot of YVR and get your input on what we can do to better serve you. To do this, I’ll touch on key aspects of YVR—including our recent developments and future goals.

Before I get going, I want to note that we have set aside time for questions at the end, but feel free to ask at any time. We have also passed a feedback form around. As a bonus, everyone who fills one out will be entered for a chance to win a special YVR prize!

Also, there’s one question I would like you to mull over during my presentation. The question is: What would you


like to see at YVR in the future? . . .

Got it? Good. Now hold that thought for 20 minutes. So, let’s begin.

We run Canada’s second busiest airport, which welcomed a record 20.3 million passengers in 2015. On a busy day we see more than 70,000 people travel through YVR and that doesn’t include all the people who come out to YVR to meet their friends and loved ones or shop at the Designer Outlet Centre – but more on that later. YVR is a positive and active community, full of individuals who seek out opportunities for engagement. Like you, we look for fresh ideas and ways to contribute. This shows a willingness to engage—to go beyond, every day. And like you, we are diverse. We come from various backgrounds, yet we all work hard to move products and people around the world. We are BC’s airport, providing


world-class connections and amenities for our residents and ensuring the best of BC’s products reach international markets in time.

We’re also a community-based organization. Back in 1992, Vancouver Airport Authority took over management of the airport from Transport Canada. The Airport Authority is a not-for-profit,

or non-share capital corporation. This means that we do like and need to make money, but all profits are put back into improving the airport. Our profit comes from a range of sources—from tenant rent from an integrator or freight forwarder to sales of our immigration kiosks, airline fees and the Airport Improvement Fee. We are a community contributor, economic generator and environmental steward. We are answerable to you, our neighbours and stakeholders. For instance, who here flies through YVR or visits YVR regularly? How about a show of hands. PAUSE FOR HANDS TO GO UP Right. Those of you who raised your hands. I’m sure that if I was to ask what you like about the airport you could say


a couple things. And equally important—if I were to ask what you don’t like I’m sure you would also have comments. That’s the point. This is what we do: we constantly engage our community to learn how to improve the airport. We encourage feedback from everyone—because everyone has a unique experience at YVR. And everyone counts.

One of the places we seek feedback from the community is through our ongoing Master Plan process. We are required to submit an updated 20 year land use plan every year to Tranpsort

Canada as part of our ground lease. It is a 2 year process looking at all the land we have and how we use it. Foreasting planned passenger growth and identifying trends in aviation set up the context for what we will need in the future in terms of runways, terminals, roads. We’re currently undetaking technical work on a variety of different work streams – from airside and airspace to ground access, environment, utilities and amenities and we are in the process of taking 57 options for a new terminal and evaluating each against a set of criteria.


While work was underway with the Master Plan we realized very quickly that if we were going to meet our targeted growth numbers we needed to start planning a new terminal even sooner than expected. On the other hand, our forecasting shows us that we won’t need a new runway in the next 20 years like we had initially anticipated in our last master plan. Interestingly the reasons we won’t need a new runway in this time horizon is that aircraft movements won’t be growing in the same way as our passengers numbers will, as our average aircraft size keeps increasing. How many of you have flown on the new Boeing 787 Dreamliner? Wait for show of hands This aircraft is 20 to 25 per cent more efficient than previous aircraft – it’s a great plane and I certainly recommend you try and get on one for your next flight to Asia. But back to why aircraft efficiency is important for you – it means reduction in GHG emissions and less movements means less noise. To give you some context on how all of our movements and population have changed I want to take you back to our first Master plan in 1946.


It recommended that Metro Vancouver have 13 Airports including 2 to 3 Major airports with a regional population of 650,000 and 800,000 movements per

year by 1966. 800,000! Plane movements in 1966 were actually 100,000. They are now 300,000 with a population of 2.5 million. So no, we don’t all fly a personal mini plane to work every day.

Since the last Master Plan the Canada Line has changed how people come to the airport. In 2009 (The year the Canada line opened) 6% of passengers took public transit to come to the

airport. That number jumped to 18% in 2014 and last year was almost 20% - thank goodness for that train. In the same years (2009 – 2010), the percentage of arrivals by car has declined (includes private car, taxi and rented car) from 77% to 66% in 2014. Traffic will continue to grow on Sea island. We’ve done a preliminary ground access studies and have come to


realize there is no magic bullet. We’re currently working on this now and we recognize that whatever solutions we come up with we will need to coordinate with cities and business organiaitons like yours in how we manage that growth – how we balance for example the need for people and goods to get the airport and commuters going through the airport road system. This is one of the key topics that we will be talking about in our next phase of consultation on the Master Plan which will happen in the fall. But I want to spend a moment telling you about some of the feedback we’ve already received.

Phase 1 of public engagement on our Master Plan finished last fall and asked people to focus on their future and how it relates to the airport. In fact, we had more than 2,600 surveys completed with specific asks including:

• Adding more flights and services

• Increasing our green initiatives


• Adding more of a human touch

• And using technology to improve the passenger experience

This feedback is being incorporated into our planning

Our Master Plan is a land use plan that looks out on the 20 year horizon and works in concert with many shorter term plans that we use as well to guide our company strategy, business and capital

planning. I want to take you now from our 20-year planning cycle to a little closer on the horizon and talk to you about our three-year strategic plan.

In 2015, we developed a new Strategic Plan, and sets an ambitious goal: 25 million passengers per year by 2020. In order to grow to 25 million

passengers, we need to attract new airlines and support growth for our existing partners—so you have access to the destinations and markets. Let me make an understatement – this is a seriously ambitious target. The good news is that we have been growing by about 1


million passengers per year.

Our Strategic Plan is supported by 4 key supporting objectives. • “Creating a world-class connecting

hub”

• “Delivering remarkable customer experiences “

• “Being a leader in sustainability”

• And “Building on our strong foundation”

Let’s take a look at each one.


Our vision is to be a world-class, sustainable connecting hub between Asia and the Americas. To achieve this, we work hard to increase our core business—air services.

Over the last year, we have grown considerably. Here’s a quick list of the new services we have announced and welcomed: • Philippine Airlines, Manila to New York – with a

stopover at YVR

• Air France direct to Paris—the most requested destination among locals, by the way

• Air Canada Rouge direct to Osaka, the only service in Canada

• China Eastern to Kunming, the gateway city of “Eternal Spring”

• Qantas direct to Sydney, Australia

• New partner Aeromexico, daily to Mexico City

• WestJet non-stop service to Gatwick and Orlando


• Air Transat to Rome—a first for YVR!

• British Airways direct between Heathrow and YVR this May on the Airbus A380—another first!

• Air Canada daily direct to Brisbane, starting this June on the amazing Dreamliner aircraft.

• And Air Canada direct to San Jose, San Diego, Chicago and even Dublin.

So we’ve been busy! And that’s a good thing because we estimate that every international flight injects $100- $200 million into the

economy and creates an average of 200 direct jobs. Passengers who arrive at YVR benefit the whole province. They use our terminal and visit our shops. Some of them head out into Vancouver as tourists or for business. And some work their way around the province, supporting key industries such as tourism and trade.


What brings them to Vancouver? We have pristine nature, renowned world-wide. We also have a diverse economy—logistics, resources, tech, film, agriculture and more. While the low Canadian dollar isn’t great for every industry, it sure entices travel. We’re also working hard to encourage airlines to do business here. In 2016, we launched a new rates and charges programs for airlines at YVR called ConnectYVR, which dropped average rates by 12%. This fair and equitable program offers a rate structure for landing and terminal fees designed to incent airlines for growth and efficiency. We’re able to develop innovative programs like this because of our commitment to non-aviation related sources of revenue. I’ll talk about a couple of these ahead.

Another crucial growth area for YVR is cargo. In 2015, YVR handled 271,772 tonnes of cargo—an increase of over 5.8% from 2014 and the highest volume in over a decade.

To help us maintain this growth, we set up a new


company to redevelop and manage the facilities of our Cargo Village.

We also signed an agreement with Shanghai Pudong Airport to study the cold supply chain between our markets. BC has a lot of great products that we currently ship overseas – for example, a lot of seafood—in particular, salmon, spot prawns, dungeness crab and gooey duck clams are a big deal. There’s also stonefruit, including cherries. Of course, the list doesn’t stop there. We believe there are many products we can offer the world and we encourage businesses to get in touch with us to learn more.

Staying competitive means becoming a true international hub—transferring people and products around the world.

To do this, we are pushing for visa-free initiatives such as Transit Without Visa and the China Transit Program. These programs allow international travellers to connect through YVR without the need for a Canadian visa.


Last year, five new cities in Asia were added to the China Transit Program. This is a step in the right direction. Why? Because expanded visa-free transit could open markets for everyone—whether it’s businesses selling BC spot prawns to restaurants in Sao Paulo or international students coming to our universities from China.

To be a successful hub, we have to constantly improve the customer experience. In 2015, YVR received an 91% customer satisfaction rating. Last week we also received the Skytrax

Award for Best Airport in North America—for an unprecedented seven years in a row. And one more: BC Business declared YVR BC’s third most loved brand. We received these awards because of our customer care. For example, we pioneered barrier-free initiatives, now known as universal access. We’ve incorporated accessible features into all of our construction since 1992. We also work with consultants of all abilities to see our airport from many perspectives.


Did you know that we provide wheelchairs for those who need them, free of charge? Or that we have a visual paging system and that the very texture of the terminal—the carpet, the tile—signifies different locations? We are a huge advocate of accessibility and welcome your feedback on how we can continue to improve.

We are constantly updating the terminal—adding new areas and expanding old ones—to make sure we keep up with passenger demands.

Last year, we opened the latest addition to our Domestic Terminal. Featuring the beautiful Rivers Monument as its centrepiece, the A-B Connector includes gate improvements and facility upgrades. It also includes new shops and services, such as our third Plaza Premium Lounge. We’re also working towards finishing a new high-speed baggage system. When finished in 2017, it will transfer bags to anywhere in the terminal—in under 30 minutes. Why is this important? Because in order to become the connecting point between Asia and the Americas, we need to connect people and their bags as quickly as possible.


This is important for our airline partners and our customers, who want ease and speed throughout the travel process.

Another star offering that contributes to this revenue is BorderXpress. Created locally as a way to manage our long lineups at immigration, BorderXpress is

now available at 25 locations in Canada, the US and the Caribbean. We have sold over 750 of these kiosks, which reduce wait times for everyone at Customs by automating part of the immigration process. In 2015, we received the “Airport Innovation of the Year Award” from international aviation authority CAPA for BorderXpress . This speaks to our culture of innovation—one of our key competitive strengths and the reason we are able to remain an airport of choice. We are looking forward to unveiling our newest BorderXpress product, GBX, later this year. With features such as facial recognition, it will further speed up the immigration process. Another way we contribute to this revenue is through our


newly opened outlet centre provides our customers with a unique airport experience and is also a valuable source of non-aeronautical revenue. This revenue helps keep costs low for our partners, which in turn makes us more competitive.

In 2014, we renewed our Environmental Management Plan. This plan articulates the Airport Authority’s drive towards environmental excellence.

Under the plan, we have four big targets for 2020. This includes reducing greenhouse gas emissions by 33%, reducing waste by 50%, reducing potable water consumption by 30% and improving ecosystem health. 2015 was the first year that we measured ourselves against these targets. The results thus far are promising. For instance, during our busy summer months, we reached a 50% waste diversion rate—and totaled a 46% diversion rate for the year. We did this through many initiatives including educational contests with our tenants and stringent recycling programs.


Last summer, we launched Waste Wars, a friendly competition where tenants learned about our waste diversion process and its links to Metro

Vancouver’s ban on organic waste in landfill. We also continued a massive recycling program that helped us divert 97% of our construction waste from landfill. And we continued to implement sustainable features at the airport including a 76% hybrid taxi fleet, energy efficient LED lighting, solar hot water systems and enhanced cycling lanes. We continued to promote green transportation for all of our employees, offering a green commuter rebate program for anyone who uses public transport.

Of course, being sustainable is about more than just environmental initiatives. We are always working hard to improve our many external and

internal relationships—to build on our exceptional foundation.


In 2015, we invested over $900,000 million dollars with local community organizations, through donations and community sponsorships—and led a diverse range of community outreach programs including the Great Canadian Shoreline Cleanup and our popular Explorer Tour program. And in 2016 we will expand our community presence—increasing our participation in festivals across BC and continuing our community investment efforts, which include investing one million dollars in community organizations.

We continually work to maintain and improve the physical foundation of YVR. We are currently building runway end safety areas—or RESAs—at the end of

the South and Crosswind runways. These areas protect aircraft and passengers in the unlikely event of an overrun or undershoot. And we are doing this in advance of federal regulations because it’s the right thing to do – and at a cost of some $70 million for the south runway alone. We also continually upgrade our taxiways and runways to ensure they are in top-shape. Last summer, we repaved a


key taxiway, while also working on the South Runway RESA. We had to do this in the summer because we need the dry conditions. The challenge is that summer is also our busiest time of year. In fact, last summer we experienced our 100 busiest days ever. You can imagine the complexities of moving construction equipment and people around at night—while ensuring we don’t interfere with airline operations. This is not an easy task and I have to commend our nighttime crew for their hard work while we all slept.

We couldn’t do all this work without a 100% focus from our employees. By far our most important asset is our safe, engaged and innovative YVR team.

We were recently awarded the BC’s Top Employer designation for the tenth year in a row. The Greater Vancouver Board of Trade also lists us as a Dream Employer of BC. We earn this honour by making sure our employees are motivated and inspired. I’ve mentioned safety a couple times in the presentation so far. This is because it’s our most important core value


– and although I have probably bored you with all the awards we won last year – this one was the most important to me and to our team: in late 2015, we received the award for the best Health &

Safety Culture of any company in Canada, by occupational health and safety magazine. This means a lot to us, because it drives us every day, with every decision we make. From Board meetings to toolbox talks we start every meeting with a safety talk – some very long and some short, but it is always front of mind.

So there is our story—from growing our business, to managing environmental initiatives and ensuring we operate a safe, reliable and exceptional airport. We encourage the community to get involved with our initiatives. Our Environmental Advisory Committee and Aeronautical Noise Management Committee provide the community with a feedback channel. Both committees


represent diverse interests, including community and environment groups, municipal governments and more. We also report back to communities in a variety of ways: through these committees, online, at our annual public meeting and in our annual reports. And of course, we communicate with our stakeholders through presentations such as the one I am wrapping up now. This presentation is a part of our new Speakers Bureau program, where we engage key audiences across the province to provide more information on YVR. We will be launching the second phase of our Master Plan consultation later this year. In this second phase, we will dig deeper into our future airport. We are currently working towards an exciting terminal expansion and look forward to sharing this information.

Our ambitious goals and plans really come down to one thing: to deliver exceptional service to every single person, so we can grow and deliver

economic activity to BC. Our future growth depends on


each new and returning passenger. Our terminal improvements stem from your feedback. And our community outreach looks to you to let us know what’s working—and what’s not. So, you’ve heard me go on about all the interesting things we do at YVR. You’ve also heard about how everyone counts—from increasing our passenger count, to providing feedback on our airport and helping us grow. I’d love to hear your feedback now—in particular, if you have an answer to the question I posed at the beginning of this presentation. And, of course, I’m happy to take any other questions you may have. Thank you. [Q&A]

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