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, . 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 Halifax Chamber of Commerce, and the board re-appointed Frank Matheson and Stephen Wallace and . 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 , 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 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. As incoming chair of the Canadian Airports Council, I will represent dominoes. Many of the smaller, younger trees, in contrast, survived virtually airports across the country in matters of international air policy, taxation and unscathed. These trees were ones with healthy root systems and the flexibility to government regulation. Escalating rents and security fees remain high on our list bend and recover. That is also true for HIAA. Our stable financial position and of priorities as they hurt our customers and erode industry viability. We will our agility will enable us to adapt and recover despite the powerful also monitor Air Canada’s restructuring process and try to anticipate winds of change. the impacts it — and the ongoing evolution of global aviation — will have on the industry here. Reg Milley, President & CEO Halifax International Airport Authority SOARING Winds of change propeled Halifax International Airport upward in 2003. This was an ON exhilarating journey of tremendous progress amid widespread turbulence. UPDRAFTS HIAA ends 2003 in a More airlines and routes Inspectors award high financial position of offer travelers more marks to Halifax for strength with no choice and flexibility. HIAA security compliance. increases in aeronautical worked tirelessly to build air service from ’s ongoing inspections 5 fees. With careful financial management Halifax, attracting several major new carriers of HIAA’s Security Division showed it to and strong revenue performance, HIAA and working with existing carriers to expand be exceptionally well organized and co- weathered Air Canada’s filing for creditor routes and capacity. operative in implementing heightened protection and ended the year with excess security measures. revenues over expenses of $3.4 million, Airport Square opens for before airport improvement fees. business. November marked the Halifax International grand opening of Airport Square, HIAA’s main Airport worth $1.6 billion lobby retail expansion, and the public annually to provincial observation Flight Deck. With 13 retail shops economy. An economic impact study, in the spacious courtyard and another 13 released in July 2003, revealed that Halifax throughout the terminal building, visitors can International Airport and the airport choose from a wide selection of quality community contributed nearly $1.6 billion products in unique and pleasant surroundings. and 11,500 jobs to the Nova Scotia economy New air cargo services lift in 2002. The study, conducted by SGE Acres off from Halifax. Three air carriers Global survey ranks Limited, also found that the airport began dedicated cargo service from Halifax Halifax International contributes $325 million in salaries, $17 Passenger traffic in 2003 providing local exporters with Airport first in customer million in retail sales tax, and $47 million in continues to climb. Halifax important new routes into Europe and Asia. service. The 2003 AETRA Customer personal income tax. International led major Canadian airports in Satisfaction Survey ranked Halifax passenger growth through the first half of International Airport first in overall 2003, finishing third in the country with satisfaction in the under five million annual traffic up 4.2 per cent over 2002. annual passenger category. CHANGES Winds of change are reshaping the airline industry worldwide, eroding IN profitability in some markets but generating opportunity in others. THE AIR Cargo Booms Ties to the U.S. were further 2003 was another banner year for HIAA’s metamorphosis of commercial aviation has been under strengthened when Northwest Airlines cargo business, as 29,300 tonnes of fresh way for several years. While major airlines incurred losses announced it would operate a daily service Nova Scotia seafood and a variety of other Avying for market share, low-cost, no-frills carriers swooped from Halifax to its Detroit hub from July products moved through Halifax. The cargo into niche markets and turned handsome profits. To compete, through September. The well-utilized service team attracted three new international full-service carriers are now restructuring and re-adjusting to gave connecting travelers access to more carriers, providing Atlantic Canada 7 match capacity with market demand. than 130 non-stop destinations within the businesses with direct air access to key U.S. Air Canada Vacations added winter markets in Europe and Asia. Passenger Lift HIAA worked to further rebuild regional service to Orlando, , , and Icelandair launched its weekly freighter Throughout 2003, HIAA closely monitored service, resulting in new direct flights with , , and -based service to Reykjavik, Iceland, and Liège, shifting market conditions poised to identify from Halifax to Sydney and also provided sun flights Belgium, in February. MK Airlines, based in opportunities. The marketing team attracted . On top of the new intra- to Orlando. the , commenced twice- several new carriers and worked closely with regional service, Jetsgo added another daily Pan Am affiliate Boston-Maine Airways weekly service to Zaragosa, Spain, and all airline customers to promote routes, roundtrip flight between Halifax and . began its regular one-stop Clipper Luxembourg in May. In September, Polar Air improve service to passengers, and ensure -based WestJet celebrated its Connection service between Bangor and Cargo began flying to Brussels, Belgium, and smooth operations. These efforts paid off in expansion into eastern Canada by launching Halifax in March but later discontinued the Seoul, Korea, on behalf of Prince Edward continued passenger growth, resulting in a four daily flights between Halifax and service due to lower-than-expected loads. Island-based Northstar Holdings. 4.2 per cent increase over 2002 — a strong Hamilton early in the year. The low-cost During the summer, a leading German showing in a challenging environment. carrier later added flights from Halifax to leisure carrier, Thomas Cook powered by Clearing the Way While carriers added services to Ottawa, and . Condor, operated a highly successful weekly Progress towards U.S. preclearance Europe, the United States, central and Service to Newfoundland and Labrador service between Halifax and Frankfurt. accelerated in 2003. HIAA presented its western Canada, and Newfoundland and received a boost with several direct flights As well, My Travel and Zoom Airlines formal request and business case to the Labrador, flights within the Maritimes were per week to Deer Lake on CanJet, a low-cost combined to offer twice-weekly service to federal Department of Foreign Affairs and reduced as Air Canada cut back its carrier based in Halifax. CanJet also (Gatwick) on behalf of Canadian International Trade (DFAIT), which reviewed regional service. However, Air Canada’s launched a seasonal service to St. Affair and Sunquest. the request with Transport Canada. DFAIT -based regional feeder, Petersburg, Florida, from February through In October, Zoom Airlines announced subsequently issued a diplomatic note to the Limited, picked up several daily routes from May. Demand was so high throughout the plans to open routes from Halifax to London U.S. Department of State in December. The Halifax to Moncton, Saint John, Fredericton, winter, the airline re-established the service (Gatwick), , and , , in request was forwarded to the U.S. and Charlottetown. in November. May 2004. Department of Homeland Security, the department with the decision-making responsibility for U.S. preclearance. CHANGES While shifting conditions and uncertain forecasts prevailed in the skies, HIAA FOR improved its facilities and strengthened its business position on the ground. THE BETTER

Cecillia Anderson, HIAA Marketing & Business Development; John Marshall, HMS Host; and Carolyn Guy, Relay Books. More than 3,000 people attended the grand Other projects completed in 2003 HIAA and its retail partners opening of Airport Square on November 9th when included construction of a new taxi kiosk; are enthusiastic about HIAA and its airline and retail partners welcomed the upgrade and replacement of water lines to working together through the community to enjoy the new amenities and entertainment by Atlantic Cirque, a local troupe of increase fire flow capacity to the airport; Halifax International Retail acrobatic performers. renovation to the washrooms in the Merchants’ Association to departures area; installation of a new apron grow airport businesses drive bridge at Gate 18; construction of a while serving customers with self-serve customs kiosk for trusted outstanding products and passengers; and installation of new traveler expanded hours. he transformation of Halifax International Airport is most information kiosks and flight information evident in the newly expanded main lobby — the display screens. Progress on several other Halifax International Airport retail and centrepiece of HIAA’s airport improvement program. Three capital improvements continued throughout food and beverage outlets: T Main Level times larger than the previous lobby space, Airport Square is 2003, including preparation work for the graciously designed to look and feel like an outdoor marketplace north-end passenger tunnel; award of the Brisket Boardwalk Deli 9 with stone finishes reflective of Halifax’s historic downtown. contract for preliminary design of both the Burger King Trees and benches provide a quiet area for visitors to relax amid commuter and hold-baggage screening Central Amusements the bustle of the airport. They can browse in a variety of new facilities; expansion and renovation of the Clearwater Seafoods stores or enjoy refreshments at new food and beverage outlets. pre-board screening area; and preliminary $15 Boutique The shops and services in Airport Square offer value pricing and design of expanded international and Hudson News extended hours, including evenings and Sundays. transborder facilities. Scotia Café.ca A new tenant moved onto airport Island Beach Company Quality Crafts HIAA embarked on the $12-million joint From Airport Square, visitors can ride property after completing construction of its Maritime Ale House landlord-tenant retail development project glass elevators to the Flight Deck, a spacious $1.5 million world headquarters. Inland National Geographic with three goals in mind: to enhance the observation area overlooking the airfield. Technologies Inc. is a Nova Scotia-based Northern Reflections airport experience for visitors, to strengthen HIAA developed the Flight Deck, along with a company that recovers glycol, the fluid used Nova Scotia Liquor Corporation financial stability by diversifying revenue main-floor viewing area, in response to for de-icing aircraft, and treats it for resale. Relay Books sources, and to give something back to the requests from stakeholders and the public. The company has created a global market Rogers Wireless Inc. community and local economy. Retail These facilities add to the airport’s appeal for its unique, environmentally friendly Tim Hortons development throughout the terminal building as a community resource and destination in service and is a welcome addition to the TravelEx will create about 50 new jobs and add its own right. Halifax International Airport community. Hudson AeroMart roughly $800,000 a year to HIAA’s revenues. The main lobby expansion was Departures Level three years in the making, requiring the AerRianta Duty Free dedicated co-operation of various HIAA Brisket Boardwalk Deli departments, new and existing retailers, Hudson News (3 locations) Lydon Lynch Architects, and Castle Rock Legends Nova Scotia Lounge Construction Services Inc., all working Starbucks together throughout the planning, scheduling The Classic Backrub and construction phases. Tim Hortons AGENTS OF CHANGE In an atmosphere of constant change, HIAA employees concentrated on the tasks at hand and turned their attention to creating changes of their own.

Tom Bagley, HIAA Emergency Response Inset photos: Ivan Frame, HIAA Operations, and Janet Ingraham, HIAA Finance Dolly Warner, Volunteer Host Bill Crosman and Cathy Walker, HIAA Finance Brian Devanney and service dog Vanessa, Canada Border Services Agency. Commitment to Service Superior customer service is a priority for HIAA. Some of the participants in HIAA’s Achieving this goal requires the optimal blend of emergency training exercise. amenities and the concerted effort of all airport workers who serve the public. HIAA shared its vision for exceptional customer service — FACES (Friendly, Accessible, Comfortable, Efficient and Safe/Secure) — with the entire ndustry turbulence, stepped-up security measures, ongoing came away with a greater understanding airport community in 2003 by establishing the airport renovations, and new business practices meant HIAA and appreciation of the mechanisms and Airport Customer Service Council. Approximately Istaff had to deftly ride the winds of change on a day-to-day importance of security and the need to be alert 40 individuals represent a broad spectrum of basis in 2003. Far from being hindered by a steady stream of to their surroundings and report anything out organizations from airlines, retail shops, food challenges, employees were energized and worked more closely of the ordinary. and beverage outlets, and car-rental companies and creatively together than ever before. This highly motivated Testing and improving the airport’s to ground handlers, caterers and security 11 team is the vital force behind HIAA’s strong performance. emergency response plan is essential to agencies. The council aims to build cohesion and ensuring the smooth handling of critical generate excitement with a customer-service Teamwork in Action community recognition of their many incidents. HIAA hosted a major emergency focus by working together on training, With the collective agreement between HIAA and achievements further inspired HIAA staff, training exercise in October 2003 involving more orientation, communication, recognition, and the Public Service Alliance of Canada/Union of motivating them to deliver world-class service, than 200 individuals from HIAA and external reward programs. Canadian Transportation Employees Local 80829 substantial increases in productivity, and across- agencies including WestJet, CanJet, RCMP, This team approach to customer service is up for renegotiation in 2004, employees the-board cost reductions. Nova Scotia and HRM emergency measures paying dividends. Halifax International Airport proposed that the agreement be renewed rather organizations, HRM police and fire departments, ranked first in overall satisfaction in the under than re-opened. HIAA’s senior management and A Culture of Security Emergency Health Services, Emergency Medical five million annual passenger category of the the union membership ratified the new With new, more-stringent security measures in Care Inc., NAV CANADA, Transport Canada, and 2003 AETRA Customer Satisfaction Survey. The agreement in December. This noteworthy offer effect, HIAA’s Security Division reached out to others. The full-scale simulation was designed to survey, conducted by the International Air guarantees stability for HIAA and its workforce HIAA employees and the airport community at test the airport’s emergency plan in a real-life Transport Association and co-sponsored by for the next four years while averting a costly large to reinforce the message that “security in situation and to comply with Transport Canada Airports Council International, includes some 30 and time-consuming negotiation process. the air starts on the ground.” The Division Aerodrome Security Measures. Following a airports worldwide. The team will move forward in a true spirit launched two programs early in the year. The debriefing, the evaluators and participants gave In other categories, Halifax rated second of co-operation. first was a security-awareness presentation the exercise a thumbs-up and offered for overall satisfaction in the Americas, third in Another important employee-driven delivered to airport personnel with access to recommendations for improvement. best improvement of overall satisfaction, and initiative was the formation of the D.E.W. Crew, restricted areas, everyone from flight crews to In December, Halifax became the second third in best domestic airport. Halifax which stands for Dedicated to Enhancing our ground handlers to concessionaires. The other international airport in the country to implement International Airport ranked ninth in overall Workplace. Events of the past two years — was a security ride-along program designed the iris-recognition technology used in the satisfaction among all airports. terrorism, war, epidemics, natural disasters, specifically for HIAA employees. About 30 people Canada Revenue Agency’s new CANPASS-Air financial losses — brought the HIAA team participated in this three-hour program, which initiative. This program permits pre-approved together with ever-stronger ties of mutual gave them a first-hand look at the Security travelers to clear customs and immigration respect and common goals. Dramatic Operations Centre and the various aspects of quickly and securely while maintaining a high improvements to the airport facilities and airport security. Participants in both programs level of safety and security. FACING THE HIAA watches the horizon at all times, anticipating and planning for future needs and opportunities. FUTURE

Greg Venedam, Dora Construction Limited, and Charles Clow, HIAA Planning & Engineering. Charity At Work Enthusiasm and teamwork led HIAA employees to donate to various charities, including a record amount to the United Way for which they were honoured with a Quantum Leap Award. As well, staff supported breast cancer research by taking part in National Denim Day; KidSport Nova Scotia by competing in the Aliant Halifax Dragon Boat Festival; and a local family by providing gifts and groceries at Christmas.

IAA developed its first long-term strategic plan Charting a Course in 2003, which focuses activities over the plan’s for the Airport Hfive-year horizon — and beyond. The process The plan also examined potential risks and provided HIAA with an opportunity to clarify and identified where contingency plans are 13 restate its purpose, vision, values, and strategic required. HIAA is using the strategic plan priorities in light of its five-year outlook on the not only to guide development of its annual aviation industry and the economy at large. business plans but to inspire employees at all levels of the organization to take initiative, grow in their roles, and feel proud of their exceptional contributions to the airport’s success. In other planning milestones, HIAA completed the draft of its master plan in preparation for public consultation in 2004. The assessment and forecasting studies regarding capacity of runways, taxiways, aprons, air terminal building, and surrounding lands showed that the current property can sustain necessary expansions to meet expected demands over the next 20 years. HIAA will present the draft to the local community and stakeholder groups to gather input that will help it finalize the plan. Volunteer hosts are invaluable to the airport community and travelers, and play an integral role in customer service. They create a welcoming environment, provide a helping hand, and offer gentle reassurance to weary and stressed travelers. In August, during the power outages in Ontario and the United States, volunteer hosts worked around the clock for four days assisting travelers stranded in Halifax by distributing water and baby essentials, providing directions and, at times, calming frazzled nerves.

Future, a forum for provoking thoughtful has sought to build a strong relationship with discussion about how the region can use its its stakeholders. Working shoulder to strengths to create a sustainable and shoulder with the community to forge a prosperous future. HIAA is actively better future is part of that vision, as is 14 participating in the Halifax Regional keeping the lines of communication Municipality’s long-term planning process, constantly open. HIAA held two formal Healthy Growth for HRM. As a member of the stakeholder briefings in 2003 as well as its Homeport Committee, HIAA is working with annual meeting and kept stakeholders Nova Scotia Department of Tourism, Culture informed of developments at the airport Charting a Course with and Heritage, Halifax Port Authority, Tourism through regular correspondence. It also the Community Industry Association of Nova Scotia, and hosted a meeting of the Community In addition to its own planning activities, other agencies to develop Halifax as a Consultative Committee to discuss issues HIAA is looking to the future of the entire homeport for the international cruise industry ranging from U.S. preclearance to the master community — participating in regional — a step that would dramatically increase plan, met informally with representatives of planning exercises and working with key tourism traffic to the area. As well, HIAA key stakeholder organizations, and delivered agencies to promote economic growth in participated in a tourism-strategy workshop more than 20 speeches to business and Nova Scotia and Atlantic Canada as a whole. hosted by Destination Halifax. community audiences. HIAA sponsored the Greater Halifax Since it began operating Halifax Partnership’s luncheon series Building Our International Airport in February 2000, HIAA Pat Chapman, HIAA Communications & Public Affairs IAA delivered a solid financial a consultation process. In 2003, these its financial position by reducing and development. HIAA has been annually. New airport infrastructure performance in 2003, projects included completion of Airport deferring $800,000 in expenses committed to major capital means higher operating and Hgenerating $31.5 million in Square and the Flight Deck; across the organization. Employees improvements from the beginning, to maintenance costs, as well as higher operating revenues compared to completion of the water supply and played a key role in this, finding ways develop the airport into a self- property taxes. Changing regulations, $28.4 million in 2002 — an increase upgrade project; expansions to pre- to reduce expenses in their sustaining enterprise that meets increasingly stringent security of 11 per cent. HIAA also collected board screening areas; and upgrades departments without compromising current and future community needs. requirements and necessary capital $10.2 million in airport improvement to the domestic arrivals facilities. performance. As a result of stronger- Rather than constructing a new expenditures will add significantly to fees (AIF) for total revenues of $41.7 Total operating expenses for than-forecasted revenues and terminal building, HIAA took the less- costs. Ongoing instability in the airline million, compared to $37.1 million in 2003 were $28.1 million compared to immediate action to reduce operating expensive route of renovating and industry and escalating prices for fuel 2002. Overall growth in passenger $23.6 million in 2002, an increase of expenses, HIAA was able to manage expanding the existing structure. It and construction materials will exert traffic combined with an increase in 19 per cent. This increase was driven the impacts of these serious financial also carefully staged the airport substantial financial pressure on the the number of travelers originating by the first-ever application of federal challenges without raising fees to its improvement program so that organization. HIAA’s strategy to rise from Halifax contributed to higher rent, in the amount of $3.2 million, airline customers. Further, by the end incoming AIF revenues would largely above the turbulence will be to operating revenues from parking, and bad debt of $1.1 million incurred of the year, HIAA achieved excess cover the costs of each phase as maintain firm control of expenses concessions and AIF. As well, the when Air Canada filed for creditor revenues over expenses of $3.4 completed, thereby avoiding while aggressively pursuing 15 addition of new carriers and increased protection. HIAA also began repaying million, before AIF revenues. significant debt loads. opportunities for growth. By flights by existing airlines led to higher its chattel loan to Transport Canada in HIAA’s strong financial Although its current financial prudently managing the airport as revenues from aeronautical fees. 2003 and will continue to do so in performance goes deeper than the position is solid, HIAA expects to face a valuable community asset, HIAA will Under the terms of HIAA’s instalments of $1.3 million annually ups and downs of revenues and continuing headwinds over the next continue to deliver exceptional service agreement with the airlines, every for the next three years. expenses over the course of the year. few years. In 2004, federal rents will and contribute to regional economic dollar collected through AIF is applied In spite of these financial The organization’s financial strength is increase to $4.2 million and are growth, despite the winds of change to capital projects determined through headwinds, HIAA managed to secure grounded in its visionary approach to expected to continue to escalate that may lie ahead. OVERCOMING HIAA’s financial footings are secure, allowing the organization to face the HEADWINDS future confidently knowing it can withstand powerful winds of change. Five Year Forecast Year 2001 2002 2003 2004 2005 2006 2007 2008 (actual) (actual) (actual) Passenger Volume 2,852,061 2,853,778 2,973,187 3,161,592 3,292,029 3,387,845 3,475,997 3,566,632 Per cent Change -4.3 % .01 % 4.2 % 6.3 % 4.1 % 2.9 % 2.6 % 2.6 % Total Aircraft Movements 93,912 85,012 88,506 93,298 97,522 100,101 102,889 105,760 Per cent Change -30.5 % -9.5 % 4.1 % 5.4 % 4.5 % 2.6 % 2.8 % 2.8 % Planned Capital Expenditures ($ 000’s) $ 35,679 $ 12,369 $ 8,598 $ 32,691 $ 55,217 $ 22,221 $ 26,405 $ 20,680 Rent Payable to Transport Canada ($ 000’s) – – $ 3,191 $ 4,240 $ 4,324 $ 4,554 $ 4,646 $ 4,738 BALANCE SHEET AUDITORS’ As at December 31, 2003, with comparative figures for 2002 REPORT TO (in thousands of dollars) Halifax International Airport Authority 2003 2002 THE $ $ Assets DIRECTORS Current Cash 6,384 2,092 Accounts receivable 3,984 4,651 We have audited the balance sheet of Halifax International Airport Authority as at Inventories 443 383 December 31, 2003 and the statements of operations and changes in net assets Prepaid expenses 438 362 and cash flows for the year then ended. These financial statements are the 11,249 7,488 16 responsibility of the Authority’s management. Our responsibility is to express an Capital assets (note 3) 50,876 44,494 opinion on these financial statements based on our audit. Organization costs (note 4) — 91 We conducted our audit in accordance with Canadian generally accepted 62,125 52,073 auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material Liabilities and Net Assets misstatement. An audit includes examining, on a test basis, evidence supporting Current the amounts and disclosures in the financial statements. An audit also includes Accounts payable and assessing the accounting principles used and significant estimates made by accrued liabilities 6,274 8,434 management, as well as evaluating the overall financial statement presentation. Deferred revenue 292 70 In our opinion, these financial statements present fairly, in all material Current portion of long-term respects, the financial position of the Authority as at December 31, 2003 and the debt (note 5) 1,965 1,965 results of its operations and its cash flows for the year then ended in accordance 8,531 10,469 with Canadian generally accepted accounting principles. As required by the Long-term debt (note 5) 4,061 5,867 Canada Corporations Act, we report that, in our opinion, these principles have Security deposits 1,252 1,086 been applied on a basis consistent with that of the preceding year. 13,844 17,422 Net assets Equity in capital assets 48,281 34,651 62,125 52,073 Halifax, Canada Commitments (note 7) February 17, 2004 Chartered Accountants See accompanying notes to the financial statements.

On behalf of the Board:

Director Director STATEMENT OF OPERATIONS AND STATEMENT OF CASH FLOWS CHANGES IN NET ASSETS Year ended December 31, 2003, with comparative figures for 2002 Year ended December 31, 2003, with comparative figures for 2002 (in thousands of dollars) (in thousands of dollars)

2003 2002 2003 2002 $ $ $ $ Revenues Operating Activities Landing fees 8,764 8,102 Excess of revenues over expenses 13,630 13,524 Terminal and passenger security fees 8,728 8,302 Items not involving cash: Concessions 6,857 5,904 Amortization 2,307 2,561 Parking 3,829 3,412 Change in non-cash operating Rentals 2,381 2,199 working capital: Other 987 497 Decrease (increase) in 31,546 28,416 accounts receivable 667 (319) 17 Airport improvement fees (note 6) 10,199 8,695 (Increase) decrease in inventories (60) 10 41,745 37,111 Increase in prepaid expenses (76) (105) Decrease in accounts payable Operating Expenses and accrued liabilities (2,160) (5,098) Salaries, wages and benefits 10,399 11,046 Increase (decrease) in Materials, services and supplies 7,395 6,908 deferred revenue 222 (59) General and administrative (note 10) 4,079 2,393 Increase in security deposits 166 571 Ground lease rent 3,191 — Cash provided by operating activities 14,696 11,085 Amortization 2,307 2,561 Property taxes 744 679 Investing Activities 28,115 23,587 Expenditures on capital assets (8,598) (12,369) Excess of revenues over expenses 13,630 13,524 Cash used in investing activities (8,598) (12,369) Net assets, beginning of year 34,651 21,127 Net assets, end of year 48,281 34,651 Financing Activities Increase in long-term debt 160 3,000 See accompanying notes to the financial statements. Repayments of long-term debt (1,966) (768) Cash (used in) provided by financing activities (1,806) 2,232

Increase in cash 4,292 948 Cash, beginning of year 2,092 1,144

Cash, end of year 6,384 2,092

See accompanying notes to the financial statements. NOTES TO FINANCIAL STATEMENTS December 31, 2003 (tabular amounts in thousands of dollars)

1. General Assets Rate The Halifax International Airport Authority (the “Authority”) was incorporated on Computer hardware and software 20% - 33% November 23, 1995 as a corporation without share capital under Part II of the Leasehold improvements 2.5% - 10% Canada Corporations Act. On February 1, 2000, the Authority signed a 60-year Machinery, equipment, furniture and fixtures 5% - 20% ground lease with Transport Canada and assumed responsibility for the Vehicles 5% - 17% management, operation and development of Halifax International Airport. Excess revenues over expenses are retained and reinvested in airport operations Construction in progress is recorded at cost and is transferred to leasehold and development. improvements when the projects are complete and the assets are placed into 18 The Authority is a dynamic and multi-faceted aviation enterprise that provides service. air access to the world, facilitates personal and business connections and Organization costs promotes regional economic growth. Organization costs represent start-up expenditures, including due diligence, The Authority is governed by a Board of Directors whose members are engineering studies, and legal fees, incurred by the Authority in advance of the nominated by the Halifax Regional Municipality, the Province of Nova Scotia and transfer of operations to the Authority from Transport Canada. Organization the Federal Government, as well as the Metropolitan Halifax Chamber of costs were amortized to operations on a straight-line basis over a period of Commerce. The nominated members can also appoint additional members who three years and were fully amortized in 2003. represent the interests of the community. Revenue recognition The Authority is exempt from federal and provincial income tax, federal large Landing fees, terminal fees, parking revenues and passenger security fees are corporation tax, and Nova Scotia capital tax. recognized as the airport facilities are utilized. Concession revenues are recognized on the accrual basis and calculated using agreed percentages of 2. Significant Accounting Policies reported concessionaire sales, with specified minimum guarantees where The Authority’s financial statements have been prepared in accordance with applicable. Rental revenues are recognized over the lives of respective leases, Canadian generally accepted accounting principles. The preparation of financial licenses and permits. Airport improvement fees (“AIF”) are recognized when statements requires management to make estimates and assumptions that affect originating departing passengers board their aircraft as reported by the airlines. the reported amounts of certain assets and liabilities at the date of the financial Deferred revenue consists primarily of concession revenue for minimum statements and the reported amounts of certain revenues and expenses during guarantees and license fees received in advance of services being rendered. the year. Actual results could differ from those estimates. Employee benefit plans Inventories The Authority sponsors a pension plan on behalf of its employees which has Inventories consist of materials, parts and supplies and are stated at the lower of defined benefit and defined contribution components. In valuing pension cost determined on an average cost basis and estimated replacement cost. obligations for its defined benefit plan, the Authority uses the accrued benefit Ground lease actuarial method prorated on services and best estimate assumptions. Pension The ground lease with Transport Canada is accounted for as an operating lease. plan assets are valued at current market values. The excess of the accumulated Capital assets net actuarial gain or loss over 10% of the greater of the accrued benefit Capital assets are recorded at cost including interest on funds borrowed for obligation and the fair value of the plan assets is amortized over the average capital purposes, net of contributions and government assistance and are remaining service life of employees. Defined contribution plan amounts are amortized over their estimated useful lives on a straight-line basis as follows: expensed as incurred. 3. Capital Assets 5. Long-Term Debt 2003 2003 2002 Accumulated Net Book $ $ Cost Depreciation Value Halifax Regional Municipality deed transfer tax loan, unsecured, $$$non-interest bearing, repayable in monthly instalments of $5,633. 73 140 Computer hardware and software 1,555 939 616 Canadian Imperial Bank of Commerce demand instalment Leasehold improvements 44,594 1,909 42,685 loan, bearing interest at prime rate less 70 basis points, Machinery, equipment, furniture and fixtures 2,602 786 1,816 repayable in monthly instalments of $50,000. 1,900 2,500 Vehicles 5,269 2,104 3,165 Transport Canada non-interest bearing debt, secured by a general 19 Construction in progress 2,594 — 2,594 security agreement, repayable in annual instalments of $1,298,000 56,614 5,738 50,876 commencing January 1, 2003 through January 1, 2006. 3,893 5,192 Transport Canada deferred rent, non-interest bearing, repayable 2002 in monthly instalments of $6,700 commencing in 2006. 160 — Accumulated Net Book 6,026 7,832 Cost Depreciation Value Current portion of long-term debt 1,965 1,965 $$$ 4,061 5,867 Computer hardware and software 1,240 620 620 Leasehold improvements 23,212 723 22,489 Principal repayments required in each of the next five years are approximately as Machinery, equipment, furniture and fixtures 1,850 571 1,279 follows: Vehicles 4,542 1,656 2,886 2004 $ 1,965 Construction in progress 17,220 — 17,220 2005 1,903 48,064 3,570 44,494 2006 1,978 2007 180 4. Organization Costs 2008 — 2003 2002 The Authority has authorized credit facilities with the Canadian Imperial Bank of $ $ Commerce for $27.0 million, which, in the event of default, will be secured by an Organization costs 3,290 3,290 agreement containing a fixed mortgage by way of sublease of the Authority’s interest in Accumulated amortization (3,290) (3,199) the lease with Transport Canada, and a security interest in all of the other assets of the — 91 Authority. This security is not registered, recorded or filed in any public registry until an event of default has occurred. The credit facilities consist of an operating line of credit to a maximum of $3.0 million bearing interest at prime rate less 70 basis points. A demand instalment loan to finance construction costs is available to a maximum of $24.0 million and bears interest at prime rate less 65 basis points. Interest on long-term debt of $113,000 was capitalized as part of leasehold improvements during the year. NOTES TO FINANCIAL STATEMENTS (cont’d.) December 31, 2003 (tabular amounts in thousands of dollars)

6. Airport Improvement Fees 7. Commitments On January 1, 2001, the Authority implemented an AIF of $10 per local boarded Transfer agreement passenger to fund the cost of a major capital program. These fees are collected Effective February 1, 2000, the Authority signed a 60-year ground lease with by the air carriers for a fee of 8% of the amount collected (decreasing to 7% Transport Canada (the “Landlord”) which provides for the Authority to lease the effective January 1, 2004) under an agreement between the Authority, the Air Halifax International Airport (the “Airport”). A 20-year renewal option may be Transport Association of Canada, and the air carriers serving Halifax exercised, but at the end of the term, unless otherwise extended, the Authority International Airport. Under the agreement, AIF revenues may only be used to is obligated to return control of the Airport to the Landlord. pay for the capital and related financing costs as jointly agreed with air carriers The operating lease for the Airport requires the Authority to calculate rent 20 operating at the Airport. payable to the Landlord utilizing a formula reflecting annual Airport revenues, A summary of the AIF collected and capital and related financing passenger volumes, and predetermined base operating costs and capital expenditures are as follows: expenditures. The estimated lease obligations over the next five years are 2003 2002 approximately as follows: $ $ 2004 $ 4,240 AIF revenue (net): 2005 4,324 AIF revenue 11,097 9,459 2006 4,554 AIF collection costs (898) (764) 2007 4,646 10,199 8,695 2008 4,738 Expenditures: Projects ratified 7,869 12,223 Pension Projects pending ratification 729 — As a condition of transfer, the existing Government of Canada pension assets 8,598 12,223 and accrued benefits obligation for certain employees may be transferred to the Excess of AIF revenue over expenditures Authority under a Reciprocal Transfer Agreement. Employees had up to June (expenditures over AIF revenue) 1,601 (3,528) 25, 2003 to direct the disposition of their Government of Canada pension funds. Excess of expenditures over AIF revenue, The remaining assets of the plan, together with the actuarially determined beginning of year (19,942) (16,414) pension benefit obligation, will be transferred to the Authority’s pension plan on Excess of expenditures over AIF revenue, end of year (18,341) (19,942) a fully funded basis. The amount and timing of this transfer to the Authority cannot be determined at this time. Net assets of the Authority as at December 31 are as follows: Construction in progress 2003 2002 At December 31, 2003, the Authority had outstanding contractual construction $ $ commitments amounting to approximately $1.0 million (2002 - $2.7 million). Net assets provided by airport improvement fees 27,222 17,023 Net assets provided by other operations 21,059 17,628 Net assets, end of year 48,281 34,651 8. Pension Other information related to the Authority’s defined benefit plan is as follows: The Authority sponsors a pension plan (the “Plan”) on behalf of its employees 2003 2002 which has defined benefit and defined contribution components. The defined $ $ benefit component is for former Transport Canada continuing full-time Employer contribution 595 612 employees who were employed by the Authority on February 1, 2000 and Employees’ contribution 207 207 previously participated under the Public Service Superannuation Act (“PSSA”) Benefits paid 45 17 Plan. However, these employees may elect to become members of the defined contribution plan in lieu of the defined benefit plan. All other employees will Pension expense for 2003 amounted to $119,000 (2002 - $126,000) for the become members of the defined contribution plan. defined contribution plan and $595,000 (2002 - $612,000) for the defined benefit 21 An actuarial valuation has been prepared as of January 1, 2003, for purposes plan. of funding the Plan. The existing Government of Canada pension assets and accrued benefits obligation for certain employees may be transferred to the 9. Financial Instruments Authority as described in note 7. Until such time as the Pension Transfer Fair value Agreement has been finalized and the transferred employees have chosen to The carrying values of cash, accounts receivable, accounts payable and transfer their PSSA Plan pension credits to the Plan, there will be no liability for accrued liabilities, and security deposits approximate their fair value due to the pensionable service prior to the effective date of February 1, 2000. relatively short periods to maturity of the instruments. At December 31, 2003, As at December 31, 2003, the value of accrued pension benefits related to the fair value of long-term debt was $3,684,000 (2002 - $4,866,000) relative to the defined benefit plan was estimated to be $3,376,000 (2002 - $2,473,000) the carrying value of $6,026,000 (2002 - $7,832,000). and the market value of pension fund assets related to the defined benefit plan The fair values of long-term debt were estimated based on the present value was $3,605,000 (2002 - $2,532,000). The balance sheet carrying amount of the of contractual future payments of principal and interest, discounted at the accrued asset is $nil (2002 - $nil). current market rates of interest available to the Authority for similar debt The significant actuarial assumptions adopted in measuring the Authority’s instruments. accrued pension benefits are as follows: Credit risk 2003 2002 The Authority is subject to credit risk through its accounts receivable. A % % significant portion of the Authority’s revenues, and resulting receivable balances, Discount rate 6.50 6.50 are derived from airlines. The Authority performs ongoing credit valuations of Expected long-term rate of return on plan assets 7.00 7.25 receivable balances and maintains reserves for potential credit losses. Rate of compensation increase 4.00 4.00 10. Bad Debt Included in general and administrative expenses is a provision for amounts owing from Air Canada as a result of its filing for protection under the Companies’ Creditors Arrangement Act in the amount of $1,100,000. The original observation deck at Halifax International Airport in 1960.

During 2003, the Governance Committee of Senior Officers’ Salaries CORPORATE the board reported that there were no breaches President & CEO: R. Milley ...... $180,000 of the conflict of interest guidelines by any officer Vice President Operations: P. Clarke. . .$115,000 or director of the airport authority. Vice President Finance: J. Carter . . . .$113,000 GOVERNANCE Compensation of the senior officers and Senior executive officers are also included in a directors of the airport authority is reviewed management incentive plan. Payments under this Halifax International Airport corporate strategies, plans and financial annually. Amounts paid to the airport authority’s plan are contingent upon the achievement of Authority is a dynamic and multi- objectives; appoints the chief executive officer; officers and directors during 2003 follow. individual, business unit, and corporate 22 faceted aviation enterprise that assesses the performance of the board and the objectives, including financial performance. In provides air access to the world, chief executive officer; ensures effective Board of Directors 2003, a total of $113,000 was paid to the senior facilitates personal and business communication with the nominators and the Total Compensation executive officer group for management connections, and promotes community; and ensures the effectiveness of the Chairman: B. F. Miller ...... $ 66,400 performance. regional economic growth. airport authority’s internal controls and systems Vice Chairman: F. Matheson ...... $ 25,800 The airport authority is governed by a board in preserving and enhancing the airport Secretary: J. S. Cowan ...... $ 38,500 Contracts in Excess of $85,000 consisting of 13 directors nominated by the authority’s assets and pursuing its mission. The Directors: Halifax International Airport Authority, in following entities: board meets as often as is required to carry out M. R. Brooks ...... $ 13,400 accordance with its lease with Transport Canada, Federal Government ...... 2 its responsibilities and maintains four standing P. Champagne ...... $ 19,800 is required to report all contracts in excess of Provincial Government ...... 1 committees that make recommendations to the P. Gurr ...... $ 3,677 $85,000 ($75,000 in 1994 dollars adjusted for Halifax Regional Municipality ...... 4 board with respect to matters within their D. Mills ...... $ 15,200 Consumer Price Index) that were entered into Metropolitan Halifax Chamber of Commerce . .3 jurisdiction, including the Governance Committee, A. W. D. Pickup ...... $ 4,100* during the year and that were not awarded on HIAA Board of Directors ...... 3 chaired by James S. Cowan; the Finance and R. Rideout ...... $ 14,400 the basis of a public competitive tendering Generally, a director may serve no more than Audit Committee, chaired by Frank Matheson; the R. J. Scott ...... $ 14,600 process. The following contract was in excess of a total of nine years from the date of transfer, Human Resources and Pension Committee, F. Smithers ...... $ 12,200 $85,000 and was awarded without public tender: February 1, 2000. Collectively, directors are chaired by Bernie Miller; and the Capital, Safety K. Streatch ...... $ 14,200 InterVISTAS Consulting Inc., contract value up expected to possess knowledge relating to the and Environment Committee, chaired by Stephen S. L. Wallace ...... $ 24,500 to $150,000. This supplier was uniquely qualified aviation industry, air transportation, business, Wallace. The airport authority has adopted J. R. Winters ...... $ 14,200 in the area of work required as its team’s finance, administration, law, government, conflict of interest guidelines to govern the expertise and network contacts with integral engineering, labour organizations, and the conduct of, and the disclosure and avoidance of * Mr. Pickup completed his term in December decision-makers in the aviation industry has interests of consumers. conflicts of interest for, all officers and directors. 2002. This compensation represents fees translated into a superior success record. After The board oversees the conduct and operation This disclosure is updated as required but no incurred in 2002 but paid in 2003 according to an evaluation process, this contractor was of the airport authority; reviews and approves less frequently than once each year. HIAA’s quarterly payment schedule. determined to be the most qualified. Dalhousie University and past chair of the Atlantic and is a former director of the Small Business Provinces Transportation Commission. Since 1995, Jim Development Corporation for the province of BOARD has acted as board secretary and general counsel to Nova Scotia. the airport authority. Fred Smithers, Director Fred is president Paul Gurr, Director Paul is president, Atlantic and CEO of the Secunda Group of Companies, and the OF DIRECTORS Region, and sits as a member of the Canadian president and owner of Granite Springs Golf and executive committee for Labatt Breweries of Canada. Country Club. He is the chairman of ProGear, a golf Bernard Miller, Chairman A senior executive University and is a professor of marketing and Paul currently serves as a director of the Halifax club manufacturing company. He is the Honorary with Air Canada until he retired in 1991, Bernie has transportation at the university. She currently chairs Chamber of Commerce, is a member of the advisory British Consul for the Maritime Provinces. He serves over 45 years of aviation experience. Since 1992, he the International Trade and Transport Committee at the board to the Sobey School of Business at Saint Mary’s on the board of governors of Saint Mary’s University has been closely involved with the transfer and Washington-based Transportation Research Board. University, and is a governor for Junior Achievement of and the Nova Scotia College of Art and Design. He operation of Halifax International Airport and served as Pierre Champagne, Director Pierre is a Nova Scotia. serves on the board of directors for The Shaw Group the airport authority’s CEO for much of the first year graduate of Saint Mary’s University with 38 years of Don Mills, Director Don is president and and Order of St. John. after the transfer. He is a member of the Faculty of aviation experience, of which 26 years were involved CEO of Corporate Research Associates Inc., CEO of Ken Streatch, Director Ken has over 30 Management at Saint Mary’s University and is a in airport operation and management in senior level CorporaTel, and vice chair of CCL Group. He is years of senior management experience in both management consultant. Bernie also chairs the board positions. Pierre served as an officer in the RCAF and currently chair of the Greater Halifax Partnership business and government. He is president and CEO of the Nova Scotia International Air Show. currently resides in Halifax. and is past president of the Canadian Association of of Sunberry Cranberry Producers Inc., and chairman Frank Matheson, Vice Chairman Frank is Norbert Comeau, Director Norbert is a Marketing Research Organizations. He also serves as of the board of Atlantic Canada Cranberries Inc. president and CEO of Homburg Canada Inc., an retired principal of École Stella-Maris (Acadian School) a director for the United Way Advisory Board, the board Ken has held a number of portfolios with the international real estate company with holdings in in Meteghan, Nova Scotia. He has served as a member of trustees for the YMCA, Dalhousie University, The government of Nova Scotia, including minister of residential, commercial, industrial, and retail of the Nova Scotia Human Rights Commission, chaired Office Interiors Group, Ashburn Golf Club, Market transportation and communications and minister of properties. Frank is a past chair of the Halifax School the organizing committee for FANE (Acadian Federation Decisions (LLC - Maine), the Professional Market economic development. Board and the Halifax Forum Commission and has of Nova Scotia), and is the past president of various Research Society, and Total Marketing & Stephen L. Wallace, Director Stephen is served on many community and industry-related community organizations. Communications (). president of the Bedford-based consulting firm Terrain boards and commissions. James S. Cowan, QC, Director Jim is a Roy Rideout, Director Roy is past chairman Group Inc. He is a former director of the Nova Scotia Mary R. Brooks, Director Mary holds the partner in the law firm Stewart McKelvey Stirling and CEO of Clarke Inc., a publicly traded company in chapter of the Urban Development Institute and past William A. Black Chair of Commerce at Dalhousie Scales. He is the chair of the board of governors of the transportation industry. He is also a director of president of the Consulting Engineers of Nova Scotia. Fortis Inc. Prior to 1988, Roy held senior executive J. Robert Winters, QC, Director Bob is positions with both Eastern Provincial Airways and the chair of Napwick Holdings Limited of Truro and International for 15 years. Roy is a counsel to the law firm of Burchell MacDougall. He is chartered accountant. also director of High Liner Foods Inc., chair of the Robert J. Scott, Director Bob is executive board of regents of Mount Allison University, and a vice president of Glenora Distillers International Ltd. member of the advisory boards of Oxford Frozen Foods Limited and Inland Technologies Inc.

Back row from left: Robert J. Scott, J. Robert Winters, Ken Streatch, James S. Cowan, Fred Smithers, Roy Rideout, Don Mills, Stephen L. Wallace, Pierre Champagne. Seated from left: Reg Milley, Mary R. Brooks, Bernard Miller, Frank Matheson. Missing: Paul Gurr, Norbert Comeau. EXECUTIVE MANAGEMENT as of December 31, 2003 Reg Milley, President & CEO TEAM Joyce Carter, Vice President Finance Peter Clarke, Vice President Operations Larry Butler, Acting Director Planning & Engineering Pat Chapman, Director Communications & Public Affairs* John MacLean, Corporate Counsel Jerry Staples, Director Marketing & Business Development * replacing Gina Connell on maternity leave Halifax International Airport Authority is a dynamic and multi- faceted aviation enterprise that provides air access to the world, facilitates personal and business connections, and promotes regional SEVEN economic growth. STRATEGIC PRIORITIES

• Optimize Safety and Security • Sustain and Grow Air Traffic • Optimize Financial Performance • Enhance User Experience • Optimize Community Economic Growth • Enhance Corporate Reputation • Realize Human Potential

< Spectators gather to witness this Trans Canada Airlines plane, one of the first jets to land at Halifax International Airport. Circa 1960. HALIFAX INTERNATIONAL AIRPORT AUTHORITY

1 Bell Boulevard, Enfield, Nova Scotia B2T 1K2 Tel: 902.873.4422 Fax: 902.873.4750 www.halifax-airport.com