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Rise Above Look Up, Way Up RISE ABOVE LOOK UP, WAY UP. 04 Board Chair’s Message 07 President and CEO’s Message 10 Air Service 16 Fort McMurray Wildfire 18 Cargo 20 Commercial Development 26 Concessions 30 Villeneuve Airport 34 Parking, Ground Transportation 35 Safety and Security 36 Community Partnerships 38 Sustainability 42 Board Governance 51 Strategic Reporting 53 Management Discussion and Analysis 69 Financials 5 Turbulence. At 35,000 ft., it can be unnerving, even scary at times. But everyone knows it’s a normal part of flying, and getting from A to B isn’t always smooth sailing. 2016 was that kind of year for our province, our region and our airport. Alberta’s economy hit some turbulence and it was a rough ride for many sectors. EIA was not immune from the impact of the economic downturn. But if there’s one thing we know about the people of our province, region and EIA is that we’re resilient. When we are faced with adversity is when we shine the brightest. It’s when we reach out to our neighbours to build more bridges and fewer fences. It’s when, together, we rise above. 2016 6 BOARD CHAIR’S MESSAGE An airport is a mirror of its community. An airport reflects its region’s personality and helps drive its economy and forward its goals. Arguably, an airport’s biggest job is to maintain a position of economic strength and confidence, regardless of — in spite of — external conditions. This was Edmonton Airports’ challenge this year. Although the provincial economy has seen peaks and year and generating nearly $1.2 billion in Gross Domestic valleys over the last generation, the economic downturn Product (GDP). Our total economic output remains that began in 2015 and worsened in 2016 has been more than $2.2 billion. Continued diversification of our unprecedented. It has had a profound effect on the business offerings will remain essential in our ongoing resource and energy sectors and a similarly profound support to and for the region. I am so appreciative for effect on the regional economy. the vision and business savvy my colleagues on the Board of Directors have shown during this past year EIA certainly felt the effects of these challenging as we’ve worked to keep EIA and the region moving economic conditions. Our Board of Directors, in forward through these challenging times. collaboration with the management team, was determined to face the challenges head on. Maintaining EIA’s Specifically, I want to thank Leonard Blumenthal (Leduc position of economic strength required pragmatism and County) and Mary Cameron (Government of Canada) quick, ongoing action. That action resulted in, among whose terms ended in December 2016. They contributed other things, increased demonstrations of confidence greatly to our Board and we valued their perspectives from private investment, which increased again in and acumen. 2016. Construction began, for example, on a new 25,000-squarefoot freight forwarder mixed-use cargo My Board colleagues Dale Klein (Sturgeon County) building for Runway Developments and Aeroterm’s and Naseem Bashir (City of Edmonton) both enter 50,000-squarefoot multi-use airport facility. Aurora their second four-year terms in January 2017. We will Cannabis, which will be the world’s largest and most continue to benefit from their invaluable contributions. advanced medical cannabis production facility, also began construction of an 800,000-square-foot facility at EIA. We welcome to the Board Tim Hofstra, who began his first four-year appointment, representing Leduc Other significant partnership projects continued County, in 2017. toward completion, including Rosenau Transport Ltd.’s 211,000-square-foot warehouse and shipping The Government of Canada’s position on the Board facility and the much anticipated 585,000-square-foot remains vacant while the federal government moves Premium Outlet Collection-EIA. forward with its appointment process. EIA’s cargo service also experienced its seventh Our role as a Board is not just to ensure EIA rises consecutive year of volume growth — just another above the challenges it faces. Our role is also to ensure example of continued confidence in both the airport that, as EIA rises above its challenges and beyond its and the region as an economic and transport hub. expectations, our community rises alongside us. It is our mandate, our core belief and our reason for doing Of course, increased growth in both cargo volume and what we do – endlessly striving towards greatness for commercial development at the airport translates into ourselves and our community. jobs and economic impact for the region. In 2016, EIA continued to be a robust economic engine, staying in Maureen McCaw line with the results of our most recent economic impact Board Chair study: supporting 12,600 direct and indirect jobs each 9 PRESIDENT AND CEO’S MESSAGE An old adage tells us that adversity builds character. In the case of EIA, I would say adversity has demonstrated our character — who we are as a company, what we value and how we feel about the community we serve. There’s no question it’s been a challenging year for our province, our region and EIA. And I’ve never been more proud to be President and CEO of Edmonton Airports. As our Board Chair outlined in her message, so much Horseracing Alberta, for example, announced that of EIA’s success in navigating the external economic Century Casinos, Inc. has been chosen to develop a new challenges of 2016 was thanks to the Board’s practical mile-long racetrack in EIA’s aerotropolis development. view, the company’s nimbleness and our employees’ Scheduled to open in 2018, the facility will include commitment and spirit of collaboration. Without these food and entertainment facilities with slot machines. three factors, getting through difficult times would be Commercial development such as this generates revenue impossible. that EIA is able to re-invest into improving air service for the region. Although 2016 was a challenging year, we saw an uptake in air traffic the second half of the year, giving us a net Villeneuve Airport continued to be a vital part of our result of an overall decline of just over three percent business in 2016. Our region’s primary general aviation in passenger terminal traffic for the year. Overall, our airport logged close to 55,000 successful landing and general and business aviation passenger traffic was down takeoffs for the year. As well, many new expansion plans by 29 per cent. This decline was the result of the one/ continued in Villeneuve including our second fixed-base two punch of a low Canadian dollar and reduced travel operator Polaris Air who broke ground for a new 25,000 to and from energy-based worksites. The low Canadian square-foot facility. Due to the success of the 2016 dollar also affected US-destined travel specifically, as Edmonton Airshow you won’t want to miss the 2017 travellers made different choices for holiday and business. show with a special tribute to Canada’s 150th birthday International travel was also down, largely because of and an appearance of the famous Royal Canadian Air decreased demand for sun destination service. Force Snowbirds performing in the skies above. I look forward to seeing you there on August 19 and 20! What was encouraging, however, was the introduction of transatlantic services to Reykjavik on Icelandair, Amsterdam I want to close by acknowledging all those across the on KLM Royal Dutch Airlines, and London–Gatwick on province and, indeed, across the country, who came WestJet’s new seasonal service. The success of these together to support the communities affected by the transatlantic services is good news for the region, as the fires in and around Fort McMurray/Wood Buffalo. The flights bring tourists from those destinations who spend companies who call that community home, along with time and money in the region and then use Edmonton the government agencies that activate in emergencies, as a gateway to the Rockies, the Canadian North and did a tremendous job before, during and after the other destinations. evacuation. Every employee here wanted to do what they could and give what they had to help. This was, We also recorded incredible cargo growth for the for many Albertans, their darkest hour. That’s EIA. seventh year in a row. International air cargo is a powerful That’s the people who work here: generous, selfless, economic driver for the region, and growing that part community-focused. of our business remains a key corporate goal. Ultimately, that’s the theme of this annual report. No Anyone driving by or around the airport will see a flurry matter what happens or what life throws at us, it’s only of construction activity as we move ahead on a number by helping each other that we rise above. of commercial and cargo development projects. We continue to find new, innovative ways to develop our Tom Ruth aerotropolis, partnering with organizations that will spur President and CEO economic growth for the region and create a tourism destination at EIA. 10 11 VISION OUR More flights to more places CORE VALUES MISSION Safety and security first: be safe and secure Own the outcome: deliver quality service and products Driving our region’s economic Doing the right things right: show individual and organizational integrity prosperity through aviation and Invested in our talent: be people-focused in respect, teamwork and collaboration commercial development Dedicated to sustainability: consider social, environmental and financial impacts Strategic objectives Strategies 2016-2020 Improve financial sustainability Retain and grow passenger market demand Enhance passenger experience Grow non-aeronautical revenue and development GOAL Improve social, environmental and Create exceptional customer experiences economic impacts 10 million annual enplaned and Deliver positive community impact through sustainability Enhance airline productivity deplaned passengers by 2025 Engage employees Improve employee engagement, performance and well-being PICK A T ULIP, PICKLED HERRING OR PICADILLY.
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