CEO hopes airport sell-off grounded
Privatizing Canadian airports might generate quick cash but would be a mistake in the long run, says Victoria International Airport’s chief executive officer.
Geoff Dickson told Victoria councillors that the privatization idea seems to be geared at larger Canadian airports and is apparently being driven by the Ministry of Finance — not Transport Canada.
“If they [the federal government] could raise a few billion dollars for Vancouver [and] Toronto, they think that’s compelling,” Dickson said during a questionand-answer session following his annual update to council on airport operations.
“I think in the long run it’s a big, big, big mistake because I think the business model you have today, with private companies running a community-based not-for-profit where everything gets re-invested, just gets a much better balance.
“When you have to start really focusing on shareholder return, it just puts a slightly different lens on things.”
Dickson, who said he’s long given up trying to second-guess governments, said he doesn’t know whether privatization will proceed, pegging the odds of privatization of larger Canadian airports at 50-50 — maybe.
It’s less likely for smaller airports like Victoria, he said.
“There aren’t many success stories [of privatization] worldwide, and it certainly hasn’t been at passenger numbers sort of at our level,” he said. “You pretty much need to be in the four-, fivemillion passenger range before it gets a little bit more interesting.”
Dickson said the airport is performing extremely well on several measures: It served more than 1.856 million passengers last year — a new record that represents an 8.5 per cent increase over 2015. Non-aviation revenue is 67 per cent of total revenue — the highest in the country. And airport debt was fully retired as of Jan. 3.
Last month, the Capital Regional District board passed a resolution asking the Federation of Canadian Municipalities to call on the federal government to not proceed with the potential privatization of Canadian airports.
The federal government is considering recommendations on airport governance that it received from a panel led by former cabinet minister David Emerson following an 18-month review of the Canada Transportation Act.
According to Transport Canada officials, the panel considered a variety of issues, including whether current governance and service delivery models for airports could be improved.
Last month, the Vancouver, Calgary and Ottawa airports launched an information website as they lobby the federal government to leave things as they are.
The website noairportselloff.ca offers their perspective on a potential sale of Canada’s major airports. They suggest a selloff to private investors would establish the airports as for-profit enterprises that would result in increased cost for airlines and passengers and undermine Canada’s economic competitiveness.
The group suggests the country’s airports, transferred to nonprofit airport authorities in the 1990s, are a success story.
Under the current model, they say, airport authorities have a mandate to advance economic growth and promote development in the communities in which they operate.
They also point out Canada’s major airports do not receive any funding from the federal government, yet pay more than $1 billion a year in rents and other fees to it.