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Annual Report.Qx WINDS Winds are awesome forces, OF capable of altering the landscape. CHANGE The secret to moving forward in powerful winds is not to try to harness them, but to use skill, agility and determination to ride them. In 2003, Hurricane Juan whipped through Halifax and across Nova Scotia leaving a trail of destruction in its wake. At the same time, powerful winds of another sort were transforming the global aviation industry. This annual report tells how Halifax International Airport Authority relied on foresight, flexibility, discipline, and teamwork to harness the winds of change to reach new heights of achievement. >This Sikorsky S-41 was one of the first regularly scheduled passenger aircraft to land at Halifax Municipal Airport, located near Chebucto Road and Connaught Avenue. Circa 1931. NEW CENTURY Message from In 1903, Orville and Wilbur Wright achieved the world’s first the Chairman manned controlled-power flight over Kitty Hawk, North OF Carolina. History was made again six years later when John A. D. McCurdy piloted Alexander Graham Bell’s Silver Dart, FLIGHT soaring over the frozen waters of Baddeck Bay, Nova Scotia. The flying machine flew a remarkable one-half mile on this first manned flight in the British Empire. A mere 100 years later, NASA’s Rovers, Spirit and Opportunity, traversed the surface of Mars sending back high-resolution images of an alien landscape — an astounding demonstration of the advances in aviation since those inaugural flights. Aviation, by its very nature, embodies a spirit of exploration and innovation. That spirit continues to inspire us in this new century of flight. It is exciting to be part of the advancement of Halifax International Airport as we discover new worlds, as our own industry is being rediscovered. Halifax International Airport Authority 2003 Annual Report 2 Since February 2000, when Halifax International Airport was transferred to a community- provincial government, is president of Oland Brewery, and Norbert Comeau, retired principal of based organization, Halifax International Airport Authority (HIAA) has focused on building a École Stella-Maris, is a nominee of the federal government. Early in 2004, Carole Cushing, the foundation for success and enhancing the value of this vital asset to support and stimulate regional former senior vice president and managing director and atlantic division manager for BMO Nesbitt economic growth. In November 2003, we officially opened Airport Square, our new main lobby and Burns Inc. and nominee of the Metropolitan Halifax Chamber of Commerce, and Peter McDonough, retail area. We also created the Flight Deck, a third-floor observation area for the public. Q.C., a senior partner in the law firm McInnes Cooper, nominated by Halifax Regional Municipality, A critical next step in realizing our vision for Halifax International Airport is to secure U.S. also joined the board. preclearance. While building capacity and choice in the Canadian market was key to getting us In addition, Roy Rideout was re-nominated in 2003 for a three-year term by the Metropolitan where we are today, tomorrow’s growth will come from building air services to the United States Halifax Chamber of Commerce, and the board re-appointed Frank Matheson and Stephen Wallace and Europe. for two years. I was re-nominated by Halifax Regional Municipality for a one-year term. U.S. preclearance offers significant benefits. It will enhance customer service, enabling On behalf of the entire board, I would like to extend our sincerest thanks to three members travelers to conveniently clear customs here before entering the United States. It will who have completed their terms with the authority. Dr. Mary R. Brooks and Don Mills served on allow American carriers to provide a more seamless service from Halifax to their the board since December 4, 1995, and Pierre Champagne served since December 31, 1996. domestic networks. That means more direct service to more U.S. destinations and Their contribution to our success has been invaluable. fewer trips through costly and congested hubs. We would also like to congratulate fellow board member Fred Smithers who was named This is just the beginning. Canadian carriers will be able to offer point-to-point an Officer of the Order of Canada, our country’s highest honour for lifetime achievement. routes between Halifax and destinations along the eastern seaboard. Greater ease of Finally, President and CEO Reg Milley was appointed chair of the Canadian Airports cross-border travel between Atlantic Canada and the U.S., in turn, will stimulate Council. This appointment speaks volumes about the leadership and contributions tourism and bolster business connections. Finally, U.S. preclearance will of Mr. Milley and of the national recognition HIAA is receiving. strengthen Halifax’s position as a regional and international hub. 2003 marked Halifax International Airport’s coming of age and its To achieve these benefits, HIAA must invest in its facilities and security emergence as a world-class aviation centre, a valuable and self-sustaining infrastructure. This means a new phase in capital investment. We are ready. community asset, and a critical driver of regional economic growth. Rigorous financial measures and a sound approach to capital investment during the past three years have kept debt minimal. We are poised to take advantage Bernie Miller, Chairman of the opportunity preclearance offers. HIAA’s finances are healthy, the regional Board of Directors economy is strong, and our air services and passenger traffic are growing. Halifax International Airport Authority HIAA’s board of directors is ready to meet the challenges that lie ahead. In 2003, we welcomed two new members. Paul Gurr, nominated by the On September 29, 2003, with winds gusting above 140 kilometres per 3 hour, Hurricane Juan descended on Halifax and tore a swath through the RIDING THE WINDS centre of the province. At the airport, the winds were so strong they Message from hoisted a Boeing 727 cargo plane into the air, twirled it around and plunked it back down in the OF CHANGE the President opposite direction. Juan demonstrated vividly the ferocious power of wind. We chose Winds of Change as the theme for this year’s report to recognize that event and its impact on our community, and because it is an apt metaphor for the powerful forces that continue to test HIAA’s underlying strength and stability. In 2003, we demonstrated that not only do we have the foundation to withstand the fury of these forces, we also have the agility to ride these winds to propel us forward. Indeed, HIAA finished 2003 in a stronger financial position than forecast. We realized an excess of revenues over expenses of $3.4 million, before airport improvement fees. Because HIAA is a non-share capital organization, this surplus was re-invested in the airport, enabling us to minimize our debt and maintain our financial stability without raising aeronautical fees at any time during the past four years. HIAA’s business expanded significantly in 2003: operating revenues increased 11 per cent over 2002. This growth was due to increased passenger traffic and cargo service, and the expansion of our retail marketplace. The shift to more point-to-point flying also meant that more passengers — significantly more passengers — originated from Halifax. This, in turn, resulted in greater concession and parking revenues. As well, changing traffic led to an increase in airport improvement fee revenues, up 17 per cent over 2002. These funds were channeled back into our capital program — lowering our long-term debt to less than $5 million. In November 2003, Halifax International Airport Authority officially opened the Flight Deck, a new third-floor public observation area. 4 At the same time, we faced serious cost pressures. Our first rent payment to Transport In 2003, HIAA operated from a position of strength. This was achieved through focus, Canada — $3.2 million — added substantially to our operating costs. More significant was financial discipline and agility, all driven by the dedication of our employees. As we were about the unexpected $1.1 million in bad debt we were hit with when Air Canada abruptly filed for to begin another round of collective bargaining negotiations with our unionized staff, creditor protection. Strong fundamentals — diverse sources of revenues, positive growth, and employees themselves suggested renewing the contract rather than re-opening it. This minimal debt — allowed us to recover quickly. We immediately cut or deferred $800,000 in invaluable gesture of goodwill — recognition of the difficult environment we face and our expenses, avoiding any increase in fees charged to the airlines. mutual commitment to HIAA’s long-term success — ensures much-needed labour stability Halifax International Airport is a regional economic driver and a critical link in an inter- over the next four years. After discussions with the union, the new agreement was ratified on modal transportation system that integrates our world-class airport, port, road, and railway December 17th. This continuing spirit of co-operation is the single most important factor in systems. We continue to forge new alliances with our transportation partners. In our success. On behalf of the board and management of HIAA, I extend heartfelt 2003, HIAA proposed the creation of the Gateway Council for Halifax to foster co- thanks to the extraordinary team of people at the heart of this organization. operation within the transportation sector for the economic benefit of the entire The morning after Hurricane Juan, the devastation was shocking. Towering, region. Work has already begun on this important initiative. century-old oaks, maples and elms suffered most from the fury of the storm. These We expect turbulent conditions to continue in the industry for several stalwart trees that lined the streets like sentries for decades were toppled like years.
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