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GREATER TORONTO AIRPORTS AUTHORITY 2006 ANNUAL REPORT TORONTO AIRPORTS GREATER GREATER TORONTO AIRPORTS AUTHORITY 2006 ANNUAL REPORT 6 7 TERMINAL 1 DOMESTIC 77 passenger airlines • 16 cargo airlines Air Canada Jazz Abbotsford 27 direct Canadian destinations Air Canada Calgary Air Jamaica Charlottetown 42 direct US (transborder) destinations Air New Zealand Edmonton Alitalia Fredericton 84 direct International destinations All Nippon Airways Halifax Austrian Airlines Kelowna Avianca Kingston bmi London Brussels Airlines Moncton Condor Montreal Etihad Airways North Bay TRANSBORDER 10 Lufthansa Ottawa Albany Mexicana Quebec Allentown Royal Jordanian Regina Atlanta SAS Scandinavian Airline Saint John Baltimore Singapore Airlines Sarnia Boston Sunwing Airlines Saskatoon Charlotte SWISS International Air Lines Sault Ste. Marie Chicago Thai Airways International St. John’s Cleveland United Airlines Sudbury Columbus United Express/Chatauqua TERMINAL 3 Thunder Bay Covington/Cincinnati United Express/Shuttle America Aeroflot Russian Timmins Dallas/Fort Worth Varig Brazilian Aeromexico Vancouver Denver Aerosvit Airlines Victoria Detroit INTERNATIONAL Air France Windsor Fort Lauderdale Acapulco Air India Winnipeg Houston Amsterdam Air Transat Indianapolis Aruba Air Wisconsin/US Airways Kansas City Athens Alaska Airlines Inc. Las Vegas Beijing America West Airlines Los Angeles Belfast American Airlines Manchester Birmingham American Eagle Memphis Bogota Atlantic Southeast Airlines Miami Bridgetown British Airways Middletown Budapest CanJet Airlines Milwaukee Buenos Aires Caribbean Airlines Minneapolis Camaguey Cathay Pacific Nashville Cancun Comair Newark Cardiff Continental Airlines Inc. New York Cayo Coco Continental Express Orlando Cayo Largo Cubana Philadelphia Cienfuegos Panama City Czech Airlines Phoenix Cozumel Paris Delta Pittsburgh Curacao Point Saline El Al Providence Delhi Ponta Delgada Finnair Raleigh-Durham Dublin Port of Spain Flyglobespan Rochester Dusseldorf Porto Harmony Airways San Francisco Faro Prague Iberia Airlines Seattle Frankfurt Providenciales Japan Airlines St. Louis Glasgow Puerto Plata KLM Tampa Grand Cayman Puerto Vallarta Korean Air Washington Hamilton Punta Cana LACSA/TACA White Plains Havana Rome Lan Chile Windsor Locks Helsinki San Jose Lot Polish Airlines Holguin San Jose del Cabo LTU International Airways Hong Kong San Juan Malev Hungarian Huatulco San Salvador Martinair Holland Ixtapa/Zihuatanejo Santa Clara Miami Air International CARGO Karachi Santiago de Cuba Midwest Connect Air Canada Cargo Kiev Santiago, Chile MyTravel Airways BAX Global Kingston Santo Domingo Northwest Airlines Cathay Pacific Cargo La Romana Sao Paulo Olympic Airlines S.A. Cubana Liberia Seoul Pakistan International DHL Airways Lima Shannon Piedmont/US Airways Federal Express Lisbon St. Lucia Pinnacle Aviation/NW Airlink Kalitta Air London St. Maarten Qantas Korean Air Cargo Manchester Stansted SATA International Martinair Cargo Manzanillo Tel Aviv Skyservice MNG Airlines Margarita Island Terceira Island SkyWest Airlines Morningstar Mexico City Tobago Thomas Cook Airlines U.K. Polet Airlines Milan Tokyo Transaero Airlines Skylink Aviation Montego Bay Varadero US Airways UPS Moscow Vienna WestJet Airlines Vega Airlines Munich Warsaw Zoom Airlines Inc. Volga Dniepr Nassau Zurich CORPORATE PROFILE 2006 HIGHLIGHTS “THE NEW FACILITIES AT TORONTO PEARSON FULFILL A VITAL LINK IN CANADA’S INTERNAL TRADE AND COMMERCE AND ITS EXTERNAL BUSINESS ACTIVITIES.” NANCY HUGHES, PRESIDENT & CEO, CANADIAN CHAMBER OF COMMERCE 12 PASSENGERS BY SECTOR (in millions) 13 The Greater Toronto Airports Authority was incorporated in March 1993 as a corporation without share capital, and recognized as a Canadian Among the 30 busiest world airports, Toronto Pearson International Airport % change Airport Authority by the federal government in November 1994. The GTAA is authorized to operate airports within the Greater Toronto Area (“GTA”) handled 31 million passengers in 2006, an increase of 3.5 per cent over 4.3% 1.4% 4.6% 3.5% 2005 to 2006 on a commercial basis, to set fees for their use and to develop and improve the facilities. In accordance with this mandate, the GTAA currently 2005. The major growth area was international travel at 4.6 per cent. 2006 30.97 manages and operates Toronto Pearson International Airport (the “airport” or “Toronto Pearson”). 2005 29.91 Aircraft movements also increased over 2005 by 2.1 per cent, an increase 2004 28.62 The responsibilities of the GTAA for the operation, management and development of Toronto Pearson are set out in the ground lease with the attributed to airlines adjusting their fleet mixes and flight schedules result- 24.74 federal government which was executed in December 1996 (the “Ground Lease”). The Ground Lease has a term of 60 years, with one renewal ing in higher load factors. 2003 term of 20 years. The GTAA’s priorities are to operate a safe, secure and efficient Airport and to ensure that the facilities provide the necessary 2002 25.93 services, amenities, and capacity for current and future air travel requirements for the GTA. The GTAA has committed to seek new opportunities for generating revenue 2001 28.04 and in 2006, this initiative realized a 23 per cent increase over 2005 in DOMESTIC TRANSBORDER INTERNATIONAL non-aeronautical revenue. While some of these are from traditional sources (CANADA-US) such as parking and ground transportation, and concessions and rentals, BUSINESS STRATEGY AND MISSION AIRCRAFT MOVEMENTS (in thousands) other avenues have permitted growth. % change -5.1% 3.2% 2.1% 2005 to 2006 The GTAA remains focused on providing quality aviation facilities at Toronto Pearson, recognizing that the region’s current and future demand for In February 2006, the GTAA completed a debt issue of five-year Medium 2006 417.9 air travel is expected to continue to grow. To meet this anticipated demand, the GTAA has undertaken the Airport Development Program (“ADP”), Term Notes (“MTNs”) in the amount of $250 million and in October 2005 409.4 completed in January 2007, as well as the redevelopment of Terminal 3. The GTAA is committed to fulfilling its mandate in a fiscally responsible 2006, we completed a debt issue in the amount of $350 million. 2004 403.8 manner. This commitment is expressed in the GTAA mission statement: 2003 374.2 Effective June 1, 2006, the GTAA took over the direct day-to-day manage- “To develop and operate for the public benefit, an airport system which supports the economic development and cultural diversity of south-central ment of Terminal 3, which had previously been managed by TBI Canada. 2002 383.2 Ontario and Canada, providing aviation facilities and services that achieve: Consolidating the management of all terminals at Toronto Pearson under 2001 406.4 the GTAA is expected to provide the opportunity to increase operational GENERAL AVIATION AIR CARRIER • the highest standards of safety and security This mission will be achieved through: efficiency and reduce costs in the future. • excellence in customer service • developing a skilled and dedicated workforce • environmental stewardship and sustainability and • maximizing technology innovation and Aeronautical rates and charges are set by the GTAA annually to cover the PASSENGERS PER AIR CARRIER MOVEMENT • cost effectiveness and efficiency. • excellence in corporate governance.” projected operating costs on a break-even cash basis for each year. The two components of these rates and charges are the landing fee and the 2006 84.3 12% change 2005 to 2006 The mission of the GTAA establishes its operational priorities and guides its capital decision making. The GTAA’s strategy places priority on fiscal general terminal charge. In setting the 2007 rates and charges, the GTAA 2005 84.0 management and facility and service development. The much needed redevelopment of Toronto Pearson has required the GTAA to borrow exten- considers many factors, including the state of the aviation industry, and 2004 80.6 sively and the management of this financial commitment is a central issue for the corporation. The GTAA recognizes the need to manage costs, makes every effort to minimize increases to the greatest extent possible. 2003 75.6 maximize non-aeronautical revenues, and optimize the use of new facilities and, over time, to reduce the magnitude of outstanding debt. To this end the 2007 rates and charges were held to a single digit increase. 2002 77.0 2001 77.1 2006 ACHIEVEMENTS TORONTO PEARSON’S CUSTOMERS AND STAKEHOLDERS HAVE RELIED ON THE GTAA TO DELIVER FACILITIES THAT WILL SERVE THEM WELL INTO THE FUTURE. WE PROMISED AND WE HAVE DELIVERED. 14 On December 2, 2006, the GTAA With the opening of Pier F in The Cogeneration Plant was the GTAA, it also provides many the parking lot in under scaping will be added in spring 15 reached its 10th anniversary of January 2007, the GTAA reached completed in late 2005 and in operational benefits to the air- “I believe the airport’s additional 3.5 minutes. The need for 2007. The environmentally- managing and operating Toronto its most significant milestone. As early 2006, the plant began port including the establishment capacity and services will inter-terminal busses has been friendly building houses class- Pearson International Airport. a testament to our accomplish- providing power to Toronto of defined energy costs and the prove the merits of the eliminated by the more efficient rooms and vehicles bays. There Airport Development Program.” The date also marked the public ments, Toronto Pearson