Waterloo airport offers exclusive access

When Chris Wood lists the merits of Region of Waterloo International Airport (YKF) in southern Ontario, he rattles off numbers that drip with potential.

The airport is located in Canada’s 10th largest community by population, with a primary catchment area that generates about 2.5 million passengers a year.

But with only one scheduled daily flight and one seasonal weekly flight, much of that potential is untapped.

“It’s obvious that we need to, maybe, be a little bit more innovative in how we work with carriers and try to grow the airport,” said Wood, the facility’s general manager.

With that in mind, the airport is taking a novel approach to attracting new carriers, offering exclusive access to specific routes for up to two years starting in 2018.

Airlines will be able to bid on specific routes and comprehensive services from Waterloo, as long as they are licensed to operate domestic service by the Canadian Transportation Agency (CTA) or have an exemption from the CTA to initiate ticket sales.

Winning airlines will have exclusive right to fly to that destination for up to 24 months following the agreed-upon start of service, pursuant to terms and conditions of an operating agreement.

After the 24-month period, the routes would be open to other airlines, provided the additional departure and arrival times do not conflict with existing service.

“We’ve been talking to all carriers and soon-to-be carriers, or hope-to-be carriers,” said Wood. “And one thing that has become apparent is that exclusivity, or some sort of assurance that the unreasonable competitive response that has been exhibited in this country, is probably their biggest concern.”

All airlines will be able to bid on specific routes, but exclusivity may be of particular interest to ultra-low-cost carrier (ULCC) startups like Canada Jetlines, which has expressed interest in using the Waterloo airport as one of its central hubs.

ULCCs have been concerned about the possibility of, “unreasonable competitive behaviour by other carriers that may seek to erode their viability on new routes,” according to a report to the municipal council that oversees the Waterloo airport.

“The purpose of time-limited exclusivity is to support the entry of a new supplier of air service into the market area for YKF,” said Wood.

“We understand that there is a significant amount of risk initiating a new airline service. Exclusivity will give the airline a chance to build its market and achieve success before it’s subject to direct competition on that route.

“We want to create a situation where a carrier, particularly a new airline, has maximum opportunity to succeed in our market.”

Waterloo airport staff plan to communicate the new exclusivity policy to all eligible air carriers this week, and a request for proposals (RFP) will be issued in October.

Companies will have about four months to respond to the RFP, and Region of Waterloo council will select the winning bids for each route, with recommendations from staff.

The evaluation process will favour airline proposals for multiple routes, basing aircraft at the Waterloo airport, and establishing headquarters, maintenance and repair operations, and/or other corporate functions like training and call centre activities, in Waterloo Region.

“This is a fair and transparent process that will be evaluated on an agreed-to mathematical equation that will be in the RFP,” said Wood.

“I think that the idea of awarding additional points for those types of activities is because that increases the economic impact in our community, and that’s what it’s about. It’s about jobs, it’s about investment in our community.”

Canada Jetlines said in a news release on Sept. 11 it intends to offer ultra-low fare service from both John C. Munro Hamilton International Airport and the Waterloo airport when it begins flight operations next summer.

But while the airline said it has entered into an agreement with the John C. Munro airport, it was only in “active discussions” with Waterloo airport at the time of the announcement.

“They’re going to have to go through this process like every other airline or potential airline would have to do,” said Wood.

“We have been in active discussions with Jetlines about our process. They are aware of the approach we’re taking to support new ULCC service to our market.”

Waterloo’s two existing scheduled flights–a daily offering to Calgary from WestJet and a weekly seasonal flight to Punta Cana, Dominican Republic, from Sunwing Vacations–will not be affected by the new policy.

Ultimately, he sees a huge opportunity in the Waterloo airport’s untapped potential.

“It’s a great airport, a great community, extremely underserved, and with the potential to attract passengers from a very large population swath of the Toronto, the Hamilton, the London areas,” said Wood.

“Southern Ontario is obviously a very attractive place for these prospective airlines to set up shop.”