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Saint John 2008 Annual Report YHZYTZYOWYULVRAYSJYHZYTZYTZYOWYHZYTZYOWYULVRAYSJYHZYTZYTZYOW VRAYOWYULVRAYSJYHZYTZYOWVRAYSJVRAYOWYULVRAYSJYHZYTZYOWVRAYSJ Saint John Airport

Checking In Welcome to our 2008 Annual Report

Saint John Airport Inc. is a local, not-for-profit company operated by a management team and governed by variously nominated, and subsequently elected, members of a Board of Directors.

The board is comprised of 12 directors All surplus funds generated by the nominated by community stakeholder Airport are reinvested in facilities to groups from our region. better serve our passengers.

The Saint John Airport serves a On June 1, 1999, the Saint John Airport population of approximately 300,000 became a local airport authority in the area extending from St. Martins operated by Saint John Airport Inc., to Sussex to St. Stephen. The Saint and entered into a 60-year lease with John Airport is a key element to the Transport . economic and social development of greater Saint John and southwestern New Brunswick.

1 2008 Annual Report

Taking off

Saint John Airport Inc. operates with the highest Environment: standards of ethics and integrity. The many facets of environmental sustainability important to our The primary, strategic goal for the Airport’s board, community will be met or exceeded. management and staff is to ensure there are appropriate Relationships: travel opportunities and choices for business and Service and professionalism will be the defining factor in all relationships, leisure travelers alike. This means convenient and cost- partnerships and alliances. Our effective routes – originating in Saint John. success will be further enhanced by our selection of business partners who will act as ambassadors for Stakeholder Value: our industry. There are many elements of value Leadership: important to and expected by our Saint John Airport will be a varied stakeholders. Saint John Airport major contributor to the economic will be a prominent and active part of development of the region and act the social and economic fabric of the as a leader in business standards community. in the community. Regulatory Responsibilities Financial: & Obligations: A concise, forward-looking strategic All regulatory responsibilities and plan provides the basis for our annual obligations will be achieved and Business Plan. The Business Plan will wherever reasonable, standards will be a dynamic, evolving document that be exceeded. will form the building blocks for future Service: development, planning and progress. The Financial Plan will be the summary This will be our focus. Our of revenue and expense initiatives differentiating competitive strength driven by the objectives identified in will be to deliver first class service to the Business Plan. our customers. The primary focus is to design a Safety: strategy that will ensure long-term Safety is paramount to our business. financial stability. The business Security: enterprise will be viable and self- Deviation from security standards, sustaining and able to support long in fact or implied, is unacceptable, term capital reserves. without exception. Standards directed by federal legislation will be considered a minimum for developing local protocols.

2 Saint John Airport

Soaring to new heights

Message from Paul S. Doiron

Chairman of the Board of Directors

Once again our fiscal and operating results for 2008 were very satisfying and augur well for the future. Despite the challenges faced by our airline partners and the near unprecedented volatility of world financial markets, we were able to set yet another record for domestic passenger traffic, exceeding 245,000.

Our airline partners continue to service our needs. Air Canada’s increased capacity and WestJet’s renewal of seasonal service to Toronto in May of 2009 are terrific examples of this. We were also pleased to see the return of at a much earlier time this year with direct service to Cuba and Mexico. We will continue to work with our airline partners to develop additional destinations for the travelling public.

We cannot overemphasize the fact that we need your support of the Saint John Airport and our partner airlines that service our communities. We will continue to work with the City of Saint John, Enterprise Saint John, the Saint John Board of Trade and our neighbouring communities, as well as those organizations involved in tourism to further develop travel alternatives. Our financial results for 2008 were very positive2009 and we Annual very proudly continue Report to operate debt-free. However, there is a need to make major investments in the short term. We need to increase terminal capacity to allow for additional airline partners and a more efficient check-in procedure, expand and re-configure our short and long term parking, and invest in runway improvements. Your Board of Directors is working hard to deliver on all of these in fiscal 2009. We cannot forget the substantial future capital improvements that will be required to ensure a viable airport for the long term.

Under the guidance of our President & CEO, Bernard LeBlanc, our management team continues to operate the airport efficiently, meeting and exceeding regulatory requirements. This was once again confirmed during a recent audit undertaken by . All of our employees continue to demonstrate exemplary service in a professional manner and on behalf of the board, I want to thank them for their outstanding commitment over the last year.

As Bernard also notes in his message, the Saint John Airport said goodbye to some dedicated members of our team. Wayne McAllister, our long time Vice President of Operations, retired after a 30-plus year career with the Airport. We would be remiss if we did not thank Wayne for his years of hard work and loyalty. In addition, Judith Brown joined the team as Manager of Finance & Administration, replacing Katherine Ambrus, and, of course, our CEO Bernard joined us in April. Welcome to all, and great thanks to Angela McLean, our Manager of Regulatory Affairs & Communications and Randy Herrell, Manager of Maintenance & Operations for stepping up during the transition period.

We also thank those members of our board who retired. Long serving members Harold Tennant, Jim Russell, Rod Cox, Pat Riley, Paul Harquail and David Barry all reached the end of their terms. Thanks in particular, to David for his years of dedicated service and leadership. We also want to welcome our new members, Ron Oldfield, Gary Rent, Troy Northrup, Georgie Day and Philip Reeves, all of whom are making a positive contribution on your behalf.

I would like to thank the board for their cooperation and support over the past year. You have a strong and dedicated board who are always open to your comments. We look forward to working together and to your continued support.

Yours truly,

Paul S. Doiron

Chairman of the Board of Directors

3 2008 Annual Report

Soaring to new heights

Message from Bernard LeBlanc, President & CEO

To all Saint John Airport users, passengers, and stakeholders:

When I joined Saint John Airport Inc. (SJAI) in April of 2008, I was looking for a “new challenge” and during the interview process the board members made it clear that this would in fact be the case at SJAI…I am not 100 per cent sure that they meant that:

• Fuel pricing would reach an all time high…

• Air carriers’ livelihood would be threatened, as a result, they would implement “capacity reductions” and re-evaluate all their existing routes…

• The economy would become severely challenged such that predicting “ongoing passenger traffic” would become increasingly difficult…

The great news is that even in view of these dramatic “outside factors” the SJAI team still managed to post its best annual traffic volume ever at 245,102 passengers (this even after having reached a significant milestone with a 25 per cent increase in 2007). Such performance is only possible with the full support of the local community and area travelers in terms of using the Saint John Airport for all its business and leisure travel needs. Thank you!

The winter of 2008 brought back Sunwing with “sun destination” flights to La Romana, Dominican Republic and Cancun, Mexico. Both were well received destinations by the Saint John area clientele and made these great sellers for Sunwing over the March to April 2008 period. This strong support in 2008 also benefited the 2009 program in that Sunwing opted to once more offer the Cancun, Mexico destination as well as a new Varadero, Cuba one with the additional benefit of a mid-February to May operation, so five additional weeks of operation for each destination, plus a much anticipated service over the busy and in demand March Break.

WestJet similarly operated its service from the first of the year until the end of October 2008 whereby it reverted to a “May to October” seasonal service for the Saint John Airport, with its larger 737-300 aircraft to fill, they deemed it difficult to maintain their desired fill capacity during the November to April timeframe. WestJet has continued to be a great asset to our community through its involvement in local projects and fundraisers and brings a unique culture and contribution to the competitive air travel industry. Our objective remains to work with WestJet and the Saint John community to expand their successful seasonal service to/from Toronto into a year-round service to/from Saint John. WestJet is a valued partner for the Saint John Airport and we need to ensure that this is on a 12 month basis.

Air Canada Jazz remains the staple service for the Saint John Airport and our community. With strong daily service offerings to Toronto, Montreal, Halifax and Ottawa, we continue to work with this key partner and contributor to ensure that our level of service and destinations served are enhanced and grow to provide further options to local passengers. The size of aircraft, the timing of flights, the capacity available, and the destinations served are all regular topics of discussion between Air Canada Jazz and the Saint John Airport and we aim to keep enhancing these as business activity and demand continues to grow in Saint John.

In 2008, the amount of capital invested into the Saint John Airport infrastructure was limited as we worked with provincial and federal governments to determine the feasibility of joint “major infrastructure project” funding. This remains a key priority. At year end, the Board of Directors was able to put aside an amount of $855,000 towards our Capital Asset Replacement Fund to assist in long term critical infrastructure replacement (e.g. runway resurfacing). Capital projects undertaken over 2008 totaled $137,230.

4 Saint John Airport

2008 was also a year of transition at SJAI with a new CEO, new Manager of Finance & Administration, retirement of the VP of Operations, and change to 50 per cent of the Board of Directors’ composition. Notwithstanding these operational and administrative changes, SJAI employees and subcontractors managed to deliver outstanding results and an enviable performance record. Thanks to all these dedicated employees and airport service providers for their commitment and hard work.

• In May 2006, we saw the departure of our Finance & Administration Manager Katherine Ambrus and we thank her for her contribution during her stay at the Airport.

• Judith Brown, CA joined SJAI as Finance & Administration Manager in July 2008. Judith brings many years of senior financial management experience to the airport team. Her first challenge was to improve the monthly financial reporting, including revising the forecast model and managing the installation of new accounting software. Judith continues to focus on further improving our financial, flight information, and parking systems to generate long term benefits to all users and customers.

• Our VP of Operations and interim President & CEO, Wayne McAllister, retired in April 2008 after 34 years of employment with SJAI prior to and subsequent to transfer from the federal government. I would like to personally2009 thank Wayne Annual for the dedicated Report service he provided SJAI over the years as well as for his assistance in the transitioning of the CEO role.

• Early 2008 with its very heavy snowfalls and weather impacts truly brought out the capabilities and dedication of our winter operations personnel. Through long hours of work, our staff were able to maintain the operational availability of our runways albeit at a much higher operational cost (e.g. fuel, equipment, hours of work) than budgeted due to sheer volume and fuel pricing. This combined with a hectic 2008 operational schedule allowed Randy Herrell our Manager of Operations & Maintenance, and his team, to show that this is where experience counts by meeting the challenges presented to them.

• The continued growth of regulatory requirements as a result of Transport Canada or other federal regulations also required a focused effort to ensure ongoing compliance. This involved the coordination of a variety of internal and external resources, including security providers, policing, tenants, regulatory agencies, and government departments. This coordination has been the responsibility of Angela McLean as Manager of Regulatory Affairs & Communications. Over 2008, Angela’s role has also evolved to incorporate the marketing and communications aspects of our operation.

The management team’s role at the airport is to ensure long term sustainability and growth of our facility to best meet the area travelers and users present and future needs.

To do so, a multi-year strategic plan was developed by the Saint John Airport. This plan details the development work and initiatives that need to take place over the next few years (over and above day-to-day regulatory and operational requirements) to ensure long term viability. This strategic plan is based on four key pillars, Destinations and Services, Infrastructure, Communications and People.

Over 2008, airport personnel and board members have started to focus their efforts on these strategic initiatives and will continue to do so over 2009. The aim is to further enhance the benefits of using and supporting our airport through implementation of our strategic action items.

5 2008 Annual Report

In 2009, we also face several operational demands that require a significant team effort:

• Negotiation of a new collective agreement with PSAC Local 60615

• Implementation of federally legislated programs such as Safety Management Systems, Security Management Systems, Fuel Tanks on Federal Lands, etc.

• Tender for Cleaning Services

• Establishing the feasibility of proceeding with proposed infrastructure investments

• Closer interaction with municipal, provincial, and federal governments to ensure alignment of our strategies and consistent long term direction.

• Uncertainty surrounding traffic volumes, fuel pricing, air carrier viability, and other potential economic impacts

The good news is that several enhancements are already in the works and others are already in place (e.g. new restaurant concession operator, additional leased land and a new hangar facility). A key component of our efforts in 2009 will be to ensure a more thorough community communications effort in terms of what is happening at the airport as well as getting your feedback regarding what you would like to see at your airport.

I would like to thank our Board of Directors and Chair Paul Doiron for their support and sharing of experience over my first year at the airport, as well as outgoing members and Chair David Barry for allowing me the opportunity to take on this challenge. Also, many thanks to all users, travelers, board members, employees and airport service providers for your strong support in 2008 and looking forward to an even more successful 2009!

Bernard F. LeBlanc

President & CEO

6 Saint John Airport

Making your ConneCTion

2009 - 2013 PRoJeCTIonS:

White text represents Saint John black text represents Saint John Airport actual traffi c to date and Airport passenger projections, based passenger projections, subject to on Transport Canada's March 2009 local energy-related projects. average Canadian traffi c projections.

300,000

250,000

200,000

150,000 231,131 233,442 246,515 259,334 269,448

100,000

50,000 179,874 177,397 194,864 243,526 245,102 250,000 265,000 275,000 275,000 275,000

0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

our four pillarS for growTh

deStinationS infraStructure communicationS people and SerViceS

Implementation of: • Terminal Building • Community • Collective • Passenger Survey and Parking Lot Presence and Agreement Community Support Negotiations • • Improvements Service • • Enhancements to Runways and Eff ective, Proactive Succession Airside Lighting Communications, Planning, • Additional Capacity, • Land and Service with Key Training and Destinations and Stakeholders Development Carriers Development • Motivated 1 2 3 4Employees 7 2008 Annual Report

The Gateway

to the Business Hub of the Province and the • Recent agreement between UNB Saint John and Dalhousie University for four year Energy Hub of the Eastern Seaboard undergrad medical program in Saint John beginning September, 2010. Saint John Airport is proud to be an enabler of these extraordinary development With record setting economic indicators such opportunities which will change the face of as employment levels, housing and multiple the entire region: unit starts, and retail investment, the region is poised to meet the demands of planned • Refurbishment of the Point Lepreau Nuclear industrial development. Generating Station, and the possibility of a second one on the way; (Printed with permission from the Atlantica Centre for Energy) • Irving Oil Refinery - Canada’s largest, and YSJ Travel Mix a second refinery being considered to double capacity; Leisure • Canada’s first-to-market liquefied natural gas facility - Canaport LNG; 40% Travel

• Vast hydroelectric resources generating 800 MW of clean renewable power on the St. John River;

• A bold plan to make New Brunswick the sixth largest wind power generator in the world; 60% • A $1.6 billion potash mine in Sussex; Business • 20 new ICT companies launched in Saint Travel John over the past three years with 1,300 new technology hires forecast by 2011; and

Making your Reservation A few infrastructure enhancements currently under consideration include:

Terminal Building Expansion Parking Lot Relocation and Expansion

We continue to work with our federal and provincial partners to secure the additional funding required to ensure these critical projects.

8 Saint John Airport

The Gateway

to New Brunswick’s Top Tourism Destinations Our university, the University of New Brunswick (Saint John) boasts Canada’s The oldest incorporated city in Canada, Saint most international student population, John is rich in Loyalist history and home to with over 55 countries represented, Saint national historic sites, world-class shopping John Airport now welcomes visitors, from local artisans and a thriving festival and students and immigrants from around arts community. With the only convention the world. Saint John is also the closest centre in the province, Saint John hosted 304 maritime city (and Airport) to the US Border meetings, conventions and events in 2008, via the largest border crossing for Atlantic bringing 26,659 visitors and $12 million Canada (St. Stephen, NB) — the fifth busiest in revenue to the area — most arriving by in Canada. air. An estimated $300 million in waterway and waterfront development initiatives are underway, including a new cruise ship terminal. In 2008, our Port hosted 80 cruise ships and 181,880 visitors, many of whom have indicated an interest in returning to the region by air. Saint John Airport is also the gateway to internationally recognized sites including Fundy National Park, the Fundy Isles, and the Fundy Trail. In 2008, the City celebrated the highest hotel occupancy rate east of Winnipeg.

to a Growing International Community

The Airport is a vital link in the community’s efforts to attract new immigrants. A community-led Immigration Board has been formed, along with the formation of several cultural support groups.

Runway Lighting Upgrades New Tenants A new tenant hangar is under construction.

9 2008 Annual Report

Disclosures:

There were no tendered contracts valued over $75,000 awarded.

A contract for facility security services was awarded, by invitation, to the Canadian Corps of Commissionaires.

Code of Conduct:

All Directors have completed “Disclosure Statements” and there were no instances of real or potential “Conflict of Interest” brought 2009before the BoardAnnual of Directors Report during 2008.

Transport Canada Funding for Safety and Security Upgrades:

(made possible through the use of Transport Canada Restricted Funds)

Enhancements to the terminal building security camera system represent a value of $4,164.

Finance, Audit & Investment Committee:

A committee of three directors, as well as the CEO and Manager of Finance and Administration meet on a monthly basis to review the operational and corporate financial activities, review the Annual Business Plan & Financial Budget and make appropriate recommendations to the Board of Directors.

Likewise, the annual audit is reviewed with the corporation’s auditors prior to presentation to the Board of Directors for their approval in advance of the corporation’s Annual General Meeting. The Finance & Audit Committee will also, as required, recommend to the Board of Directors, options for the appointment of the corporation’s auditors.

Personnel Committee:

A committee of three directors meets, as required, to develop a recommendation to the Board of Directors, the CEO’s compensation and performance evaluation criteria. The committee, joined by the CEO, also meets to review and recommend to the Board of Directors the corporation’s strategy for collective bargaining.

10 Saint John Airport

Governance Committee:

A committee of three directors, the CEO and the Manager of Regulatory Affairs meet to review board policy and will, from time-to-time, draft relevant amendments to board policy for consideration as required. The committee also reviews the corporation’s by-laws to ensure compliance with relevant legislation, regulations and current policies and procedures. New board member attraction and orientation is the responsibility of this committee. strategic Planning Committee:

A committee of three directors and the CEO meet as required to provide guidance to the Saint John Airport CEO and Leadership Team regarding short and long term strategic objectives and to oversee the development and execution of the strategic plan.

Marketing / Business Development Committee:

A committee of three directors, the CEO, and the Manager of Regulatory Affairs, as well as community representatives (on an ad-hoc basis) meet as required to determine air service priorities and develop strategies for airline attraction. Committee members also seek and recruit community partners for airline attraction activities and participate in presentations to potential airline partners.

Facilities and Infrastructure Committee:

A committee of three directors and senior management meets, as required, to develop recommendations for the Board of Directors on infrastructure improvements and development, and strategies for commercial development opportunities.

The CEO’s Community Consultative Forum:

The CEO has constituted a forum of community and business leaders to carry out effective dialogue for the attraction of new airline service to the community and to provide effective feedback to airlines regarding enhancements to existing air service.

11 2008 Annual Report

2008 - Compensation for 2008 Compensation the Board of Directors of Officers (honoraria, meeting fees, mileage) $313,489 Barry, David (*) $645 President & CEO Bernard LeBlanc (*) Cox, Rod (*) $558 VP Operations, Interim President Day, Georgie $ 900 Wayne McAllister (*) Doiron, Paul $ 3,545 Manager Regulatory Affairs & Communications, Gaudett, Doug $3,191 Board Secretary, Angela McLean Harquail, Paul (*) $940 Manager, Finance & Adminstration, Board Treasurer, Katherine Ambrus (*) MacDonald, Kathleen $1,389 Manager, Finance & Adminstration, Northrup, Troy $900 Board Treasurer, Judith Brown (*) $ Oldfield, Ron 745 * indicates partial year Power, Wayne $1,258 Reeves, Philip $600 Rent, Gary $1,784 Riley, Pat (*) $22 Russell, James (*) $377 Tennant, Harold (*) $1,126 Waldschutz, Christopher $1,366 Wittrien, Noel $1,816 TOTAL $21,162

* indicates term expired mid-year

Auditors Legal Counsel Bank Teed Saunders Doyle & Co. Lawson & Creamer RBC Royal Bank 39 Canterbury Street 133 Prince William Street 100 King Street PO Box 6668 PO Box 6787, Station A PO Box 787 Saint John, NB Saint John, NB Saint John, NB E2L 4S1 E2L 4S2 E2L 4B3

12 Saint John Airport

your Crew

SAInT JoHn AIRPoRT BoARD of DIReCToRS

paul Doiron wayne power Board Chairman Nominated by Nominated by City of Saint John Saint John Board of Trade Term ends July ’09 Term ends Oct.’09

D. noel wittrien Christopher waldschutz Nominated by Nominated by Saint John Airport Inc. Transport Canada

Term ends Feb.’10 Term ends Dec.’09

Douglas gaudett georgie Day Nominated by Nominated by Enterprise Charlott e New Brunswick Dept. of Transportation Term ends Dec. ’09 Term ends July ’11

Troy northrup ron oldfi eld Nominated by Nominated by Enterprise Saint John Saint John & District Labour Council Term ends May ’11 Term ends May ’11

gary rent philip reeves Nominated by Nominated by Enterprise Fundy Regional Mayors Caucus

Term ends May ’10 Term ends July ’11

kathleen MacDonald vacant Nominated by Nominated by City of Saint John Transport Canada

Term ends Nov. ’09

13 2008 Annual Report

Executive Management

President & CEO Bernard LeBlanc (506) 638-5558 [email protected]

Manager, Regulatory Affairs Angela McLean & Communications (506) 638-5578 [email protected]

Manager, Finance & Administration Judith Brown (506) 638-5552 [email protected]

Manager, Randy Herrell Maintenance & Operations (506) 638-5574 [email protected]

Corporate Contact Information

Saint John Airport Inc.

4180 Loch Lomond Road Saint John, NB Canada E2N 1L7

Telephone Main Administration (506) 638-5555 Fax: (506) 638-5550 E-mail: [email protected] Website: www.saintjohnairport.com

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