Trail Regional Airport Economic Impact Assessment

TRAIL REGIONAL AIRPORT ECONOMIC IMPACT ASSESSMENT

PREPARED FOR: REGIONAL DISTRICT OF KOOTENAY BOUNDARY

September 21, 2012

Submitted By:

Wave Point Consulting Ltd.

In Association With: Davies Transportation Consulting Inc.

TABLE OF CONTENTS 1 EXECUTIVE SUMMARY ...... 4 2 STUDY OBJECTIVES ...... 18 3 DEMAND FOR TRANSPORTATION SERVICES ...... 18 3.1 West Kootenay Demographic Trends ...... 18 3.2 West Kootenay Regional Economic Overview ...... 19 3.2.1 Kootenay Boundary Community Profiles ...... 19 3.2.2 Central Kootenay Community Profiles ...... 25 3.2.3 Regional Employment Income ...... 28 3.3 Regional Transportation – Nodes and Networks ...... 29 3.3.1 Overview ...... 29 3.3.2 Highways & Airports ...... 31 3.3.3 Discussion of Survey Findings ...... 40 3.3.4 Airports in Close Geographic Proximity – Comparative Insights ...... 43 4 TRAIL REGIONAL AIRPORT: CURRENT AIR TRAFFIC ANALYSIS ...... 46 4.1 Airport Operations & Infrastructure ...... 46 4.2 Scheduled Air Service ...... 46 4.3 General Aviation Overview ...... 48 4.3.1 Registered Aircraft ...... 49 4.3.2 Charter & Company Owned Aircraft ...... 50 4.3.3 Recreational Flying & Flight Training in Trail ...... 50 4.3.4 Air Ambulance Service ...... 53 4.3.5 Wildfire Protection & Emergency Management ...... 54 4.3.6 Aircraft Maintenance & Engineering ...... 56 5 ECONOMIC IMPACT ANALYSIS ...... 57 5.1 Methodology ...... 57 5.2 Input- Output Direct Economic Impacts ...... 58 5.3 Collection of Beneﬁts Economic Impacts ...... 62 5.3.1 Air Service & Fares ...... 62 5.3.2 Airline Costs ...... 64 5.3.3 Air Fares and Travel Costs ...... 66 5.3.4 Assessment of Benefits ...... 68 5.4 Social Values - Non-Monetary Impacts ...... 72 6 TRAIL REGIONAL AIRPORT: FUTURE AIR TRAFFIC ANALYSIS ...... 72 6.1 Demand Scenario ...... 72 6.2 Influence of Air Service Competition ...... 74 7 AIRPORT OPERATIONS & INVESTMENT RISK ASSESSMENT ...... 76 7.1 Benefits of Airport Capital Investment ...... 76 7.2 Airport Operations Benefits & Risk Framework ...... 80 7.3 Trail Regional Airport Infrastructure Specific Risk Assessment ...... 82 7.4 West Kootenay Regional Airport Discussion ...... 86 8 CONCLUSIONS ...... 89

1 9 RECOMMENDATIONS ...... 92 10 APPENDIX A – LITERATURE REVIEW ...... 95 11 APPENDIX B – AIRPORT GOVERNANCE MODELS ...... 98 12 APPENDIX B – EMPLOYER SURVEY ...... 102 13 APPENDIX D – TRAVELLER SURVEY ...... 111 14 APPENDIX E – ORGANIZATIONS CONTACTED ...... 124

Table of Figures Figure 3-1 Trail Employment by Industry Sector 2006 ...... 19 Figure 3-2 Rossland Employment by Industry Sector 2006 ...... 21 Figure 3-3 Montrose Employment by Industry Sector 2006 ...... 22 Figure 3-4 Fruitvale Employment by Industry Sector 2006 ...... 23 Figure 3-5 Grand Forks Employment by Industry Sector 2006 ...... 24 Figure 3-6 Castlegar Employment by Industry Sector 2006 ...... 25 Figure 3-7 Nelson Employment By Industry Sector 2006 ...... 26 Figure 3-8 Average Annual Income by Community 2008 ...... 29 Figure 3-9 Highway Network ...... 31 Figure 3-10 Airports in South Central BC ...... 32 Figure 3-11 Castlegar Annual Aircraft Movements ...... 33 Figure 3-12 Castlegar Domestic Aircraft Movements by Type ...... 34 Figure 3-13 Castlegar Aircraft Movements by Power Plant ...... 34 Figure 3-14 Heliports in South Central BC ...... 35 Figure 3-15 Cranbrook Domestic Aircraft Movements by Type ...... 36 Figure 3-16 Castlegar and Cranbrook Aircraft Movement Comparison ...... 37 Figure 3-17 Spokane International Airport Service ...... 38 Figure 3-18 Spokane International Total Passengers ...... 39 Figure 3-19 Spokane International Total Cargo ...... 39 Figure 4-1 Scheduled Air Service – Annual Passenger Traffic Trail ...... 47 Figure 4-2 Trail Regional Airport – Monthly Passenger Traffic ...... 47 Figure 4-3 West Kootenay Registered Aircraft Population ...... 49 Figure 4-4 West Kootenay Registered Aircraft by Location ...... 50 Figure 4-5 Trail Flying Club Aircraft Movements ...... 51 Figure 4-6 West Kootenay Air Ambulance Traffic ...... 53 Figure 5-1 Pacific Coastal Service to Trail – Revenue, Fees & Taxes ...... 58 Figure 5-2 Direct Employment - Full Time Equivalents ...... 59 Figure 5-3 Direct Wages and Salaries ...... 60 Figure 5-4 Airport Generated Income to RDKB ...... 60 Figure 5-5 Air Service Summary – Southern Interior Airports ...... 62 Figure 5-6 Southern Interior Airports Weekday Airline Capacity – Flights to YVR ...... 63 Figure 5-7 Air Fare Comparisons – Southern Interior Airports to YVR ...... 63 Figure 5-8 Southern Interior Air Fares per Kilometre ...... 64 Figure 5-9 Castlegar and Trail Airport Fees ...... 65 Figure 5-10 Nav Canada Fees Castlegar and Trail ...... 65

2 Figure 5-11 Total Fees Trail and Castlegar ...... 66 Figure 5-12 Trail & Castlegar Airfares ...... 66 Figure 5-13 Trail and Castlegar Air and Private Vehicle Travel Costs ...... 67 Figure 5-14 Increase in Travel Costs – Relocation of Pacific Coastal to Castlegar ...... 70 Figure 5-15 Pacific Coast Airlines Withdrawal: Airline Capacity Scenarios ...... 71 Figure 5-16 Estimated Travel Cost Impact Pacific Coast Withdrawal ...... 72 Figure 6-1 Waneta Dam Expansion Impact on Air Passenger Traffic at Trail Airport ...... 74 Figure 7-1 Benefits from Airport Investment ...... 77 Figure 7-2 Typical Airport Revenue Sources ...... 80 Figure 7-3 Comparative Airport Fees Castlegar and Trail ...... 82 Figure 7-4 Airport Infrastructure Types ...... 83 Figure 7-5 Project Specific Airport Investment Risks ...... 85 Figure 11-1 Not for Profit Governance Model ...... 99 Figure 11-2 City Owned – Contracted Support Governance Model ...... 99 Figure 11-3 City Owned – Separate Department Governance Model ...... 100 Figure 11-4 City Owned – Split Between Departments Governance Model ...... 101 Figure 12-1 Type of Organization ...... 102 Figure 12-2 Mileage to Trail Airport ...... 102 Figure 12-3 Frequency of Use by Employers ...... 104 Figure 12-4 Frequency of Use by Customers ...... 104 Figure 12-5 Frequency of Use for Courier/Freight ...... 105 Figure 12-6 Company Use of Chartered Aircraft ...... 105 Figure 12-7 Use by Company Owned Aircraft ...... 106 Figure 12-8 Customer’s Awareness of Trail Airport ...... 106 Figure 12-9 Impact on Business if Trail Airport Not Available ...... 107 Figure 12-10 Importance of Specific Airport Services ...... 107 Figure 12-11 Cost Savings to Business ...... 108 Figure 12-12 Employer Satisfaction Levels ...... 109 Figure 12-13 Employer Future Intentions ...... 109 Figure 12-14 Likelihood of Recommending Airport ...... 110 Figure 13-1 Origin of Outbound Trip ...... 111 Figure 13-2 Origin of Inbound Trip ...... 111 Figure 13-3 Purpose of Using Trail Airport ...... 112 Figure 13-4 Frequency of Use ...... 112 Figure 13-5 Ticket Booking Timeframe ...... 113 Figure 13-6 Day of Week ...... 113 Figure 13-7 Impact on Travel if Trail Airport Not Available ...... 114 Figure 13-8 Importance of Factors Impacting Use ...... 114 Figure 13-9 Nights in Great Trial Area ...... 115 Figure 13-10 Nights in Other Locations ...... 115 Figure 13-11 Estimate of Spending in Greater Trail Area ...... 116 Figure 13-12 Customer Satisfaction ...... 116 Figure 13-13 Future Use ...... 117 Figure 13-14 Likelihood of Recommending Airport ...... 117

1 EXECUTIVE SUMMARY

"Airports don't stand alone. They are an integral part of our national aviation infrastructure and are best examined in that context. Airports rarely lead. They respond to and best they anticipate the needs of the users."1

The Regional District of Kootenay Boundary recently completed an Airport Master Plan to develop and facilitate future airport operations that may be required to maintain both current and/or future service level expectations. Prior to facilitating and/or advancing the initiatives outlined in the Master Plan, the RDKB wishes to complete an Economic Impact Assessment Study of the airport to evaluate and determine the full economic impact of the facility/service within the Greater Trail geographic area. Thus the project team will present conclusions that will address the main findings with respect to the following research questions:

o A complete evaluation and determination of the full economic impact of air transportation and its collective logistics activities in the Greater Trail geographic area. o An economic assessment of the air transportation service industry in the Greater Trail area; o The RDKB also wishes to know what the impact would be, if any, should the West Kootenay Regional Airport be successful in significantly improving their landing reliability.

Role of the Trail Regional Airport To gain a better understanding of role that Trail Regional Airport plays in the regional transportation network three important factors were considered: nodes, networks and demand. 2

1 Szurvoy, G. (2003), The American Airport, published by MBI Publishing, p. 6.

2 These factors also play a role in the spatial pattern of economic activity and thus form a distinct branch of analytical inquiry called transportation geography. In contrast an economic impact study is concerned with analysing the macroeconomic effect on commerce, employment and incomes produced by an activity, or decision.

4 In other instances, the presence of two or more aviation nodes (airports) in close proximity to one another may serve to either enhance economic activity through the provision of services that relieve congestion, or offer increased consumer choice. In instances where there are high costs to the development of a transportation infrastructure, nodes in too close a proximity may compete for scare capital dollars with limited the net benefit to a region. Whether the presence of a specific type of transportation node such as an airport services to increase the amount of economic activity in region is heavily influenced by number of alternative nodes of a similar nature, the nature of the competing transportation networks, and the nature of demand for travel. However, in any analysis it is important to identify and distinguish the economic impact arising from a transportation service (airline) and the economic impact that arises from a specific transportation node such as an airport. The primary method for analyzing the separate impacts of the transportation service and the transportation node is to identify the physical location of where the monetary benefits flow. Since none of the airlines serving either Trail Regional Airport, or the West Kootenay Regional Airport are located in either community the bulk of the direct, economic benefits from the purchase of an airline ticket represent a leakage to the local economy. Likewise, the indirect and induced economic benefits are greater in locations with the largest direct economic benefits. This does not mean that a transportation node does not perform a valuable social role in a community for those with a need, or desire for increased mobility. Rather, it is simply recognizes the fact that the geographic location of the transportation service providers network for such tasks as management, marketing, maintenance and operations are generally the physical locations where the most significant economic benefits are likely to accrue. These types of commercial activities are often very limited at smaller transportation nodes and more highly developed at larger centers but may not necessary occur at the site of a specific transport node.

Transportation Networks: is the second factor to consider in terms of how a region's mobility and accessibility needs are met. A transport network represents the structure and organization of transportation infrastructure like roads or airports that either run through an area, or allows connections to be made within a region. Transportation networks connect the nodes and are significant because they can directly affect the capacity and efficiency of the movement of people and goods. For example, a well- developed network provides for the efficient and cost effective movement of people and goods. Residents of the West Kootenay area have access to three international airports, in Spokane, Kelowna and Cranbrook and two regional airports in Castlegar and Trail via a paved highway network. Both the distance between transportation nodes and the cost effectiveness of ground transportation have a significant impact on the type of aviation node that can be developed at Trail.

5 development of an airport in the belief that increase competition will fully address regional transportation needs. However, analysis of the demand for aviation services alone is insufficient to determine if additional airport infrastructure investment would yield economic benefits. Analysis of the supply of aviation services and the technical factors influencing the reliability of air service are just two of the main factors in addition to demand that must be considered. However, it is important to note that the size of the local population and the nature of the local economy play the lead roles in influencing the demand for transportation services.

Survey Results in Regard to Role of the Trail Regional Airport The research results indicate that the Trail Regional Airport plays a valuable niche role in a local passenger transportation network that is characterized by good highway access between two regional airports in relatively close proximity. The transportation role that the Trail Airport plays is also heavily influenced by the presence of two international airports that have the ability to draw customers from a wide geographic area. As a result, Trail Regional Airport’s dominant role is to connect residents of Trail with the Lower Mainland of British Columbia and support travel into the community from the same destination.

The niche passenger service role that Trail Regional Airport plays is influenced by the size of the market, the airline service and destinations offered, the competitive alternatives, the present business model and physical infrastructure at the airport.

Employers within 20 kilometers of the airport placed significant importance on the ease of access to Vancouver that the Trail Airport helps facilitate and a small majority of employers indicated in their survey responses that they used the airport more than six times per year. In turn, their customers and business associates also used the airport. Less than seven percent of employers indicated that they did not use the Trail Airport at all. A key research finding is that 52% of employers indicated that they would have flown to another airport, and 36% would have travelled by another mode if Trail Regional Airport were not available. Frequency of air service, destinations served by the airlines and cost of air travel were very important factors in employer’s use of Trail Regional Airport. A small percentage of employers used the Trail Regional Airport for cargo/courier, air charter, or for private aircraft purposes.

The research findings for air passenger travellers indicate that the Greater Trail area was the origin of the vast majority of customers. However, the Trail Regional Airport served customers from both Castlegar and Nelson. The Lower Mainland was the primary destination of passengers’ most recent trips, with Vancouver Island being the second most popular destination.

The primary reasons cited for travel by passengers using Trail Regional Airport included to visit friends and family a mix of business and pleasure and for business purposes only.

The research findings suggest that Trail Regional Airport performs a very valuable role in connecting the community to other locations. This important outbound transportation role while not contributing to direct local economic impact in the Greater Trail area should be kept in mind when making decisions about the level of future airport investment. The convenience of travel in terms of time saved and cost, and the ability to travel from a rural community for pleasure, business and personal reasons contribute to the local quality of life. Yet, this must be tempered by the fact that almost half of the survey respondents indicated that they would have flown using another airport and 38% indicated that they would have travelled by another mode of transport. Nine percent of survey respondents indicated that they would not have travelled to the Greater Trail area.

The research findings indicate that the airport plays a very modest role in the development of the inbound tourism industry in the region with only 12% of total survey respondents indicating that they used Trail Regional airport solely for vacation/pleasure purposes. In fact, direct stakeholder discussions indicate that in terms of tourism industry destination development both the type of air carrier, the customer requirements in terms of airport amenities and service level make it much less attractive than the competing West Kootenay Regional Airport, or Spokane International Airport.

The Trail Regional Airport plays a very modest role in terms of the general aviation industry within the Kootenay Boundary area due to a limited market and competition from other airports such as Nelson, Grand Forks, Castlegar and even Creston.

Economic Impact of Trail Regional Airport The research findings discussed below are derived from both the Input-Output and Collection of Benefits methodology.

Economic impact of the Trail airport based on input/output analysis is relatively small. This is primarily due to the relatively low level of passenger traffic, the business model used to operate the airport and the relatively minor contribution that the small general aviation sector is able to generate.

The Pacific Coastal Airlines service has a significant impact on the provincial economy. Estimates of total revenue attributable to the Pacific Coastal service to Trail are shown below:

Pacific Coastal Service to Trail – Revenue, Fees & Taxes Pacific&Coastal&Revenue,&Fees&and&Taxes Trail&Passenger&Annual&Traffic& Trail&to&YVR 20495 Ticket&Price Revenue Estimated&Passenger&Revenue &&&Bravo&fare&(15%&of&tickets) $139 $427,321 &&&Classic&fare&(65%&of&Tickets $166 $2,211,411 &&&Encore&fare&(20%&of&tickets) $229 $938,671 Blended&Fare $175 $3,577,402 Aviation&Surcharges Fee &&Carbon&Surcharge $3 $69,683 &&Fuel&Surcharge $5 $102,475 &&Security&Surcharge $7 $145,924 Total&Blended&Fare&Plus&Fees $190 $3,895,485 Total&+&HST& $213 $4,362,943

However, it is important to note that with the exception of local purchases and employment in the Greater Trail region all of this revenue flows outside of the region, and cannot be considered regional economic impact attributable to the Trail airport.

The table below indicates that the annual direct employment impacts attributable to the Trail Regional Airport are equivalent to 3.85 full time positions. This includes employment from the Regional District of Kootenay Boundary (RDKB), Pacific Coastal Airlines (PCA) and the business involved in aircraft maintenance and engineering (AME). The Trail Regional Airport volunteers who diligently complete tasks such as sweeping/snow ploughing, inspection of the runway prior to every flight, weather/visibility observations, parking maintenance, landscaping, pest control, access control and record data for Transport Canada provide work equivalent to 3.2 full time positions.

Direct Employment - Full Time Equivalents Direct Effects (FTE) 2012

Paid (RDKB, PCA, AME) 3.85

Volunteers 3.2

Total Direct FTE Jobs 7.05

Paid (RDKB, PCA, AME) 55%

Volunteer 45%

Total FTE Jobs 100%

The table below indicates that the annual direct wage and salary impacts attributable to the Trail Regional Airport are equivalent to $228,428 for the Regional District of Kootenay Boundary (RDKB), Pacific Coastal Airlines (PCA) and the business involved in aircraft maintenance and engineering (AME). The Trail Regional Airport volunteers contribute labour that has an estimated market value of $180,825.

Direct Wages and Salaries

Direct Effects $ 2012 Paid (RDKB, PCA, AME) $228,428 Volunteers $180,825 Total Employment Income $409,253 Paid 56% Volunteer 44% Total Employment Income 100%

Direct economic impacts generated by airport operations are provided in the table below. The table below shows the income from airport operations that are earned by the Regional District of Kootenay Boundary from non-taxation sources, either directly from the local property tax base, or through transfers from other levels of government such as the federal Airport Capital Assistance Program.

Airport Generated Income to RDKB 2011 Direct Aviation $0 Passenger Fees $127,380 Concession Fees $47,437 Property & Non-aviation $4,214 Total $179,031

Direct economic impacts also include local expenditures by visitors. The expenditures attributable to the Trail airport include only those of travellers who would not have travelled within the region if the airport was not available. Based on the traveller survey responses, this applies to 9.2% of travellers. Applied to the current estimated total traffic level of 20,495 passengers, this amounts to 1885 passengers. The average spending level reported in the traveller surveys was approximately $216. At this spending level, the annual direct economic impact of traveller spending applicable to the airport is estimated at $407,160.

Benefits of Air Service at Trail Regional Airport Scheduled service at Trail does provide significant benefits in terms of meeting mobility needs of residents in the Greater Trail area primarily in the areas of travel convenience and airfare cost savings for passengers. The availability of an alternative air service to Air Canada Express provides benefits to all scheduled air passengers including those who use the West Kootenay Regional Airport in Castlegar due to the competitive effect on airfares. The estimated impact on regional travel costs of a withdrawal of Pacific Coastal service is shown below.

Estimated Travel Cost Impact Pacific Coast Withdrawal Increase in Travel Costs - Withdrawal of Pacific Coastal Traffic Segment Annual Current Blended New Blended Cost Increase Cost Increase Passengers Fare Fare Including HST Trail Passengers Diverted to Castlegar 10250 $174.55 $218.19 $447,284 $500,959 Castlegar Passengers 70000 $174.55 $218.19 $3,054,625 $3,421,180 Total Air Travellers 80250 $3,501,909 $3,922,139 Current Total Annual Total Costs Cost Increase Costs Air Travel Cost Increase Passengers Private Vehicle Including HST (incl HST) Trail Passengers Shift to Private Vehicle 7175 $212.88 $246.46 $240,933 $240,933 Grand Total $3,742,842 $4,191,983

However, the provision of Pacific Coastal scheduled service to the region is not entirely dependent on the availability of the Trail Airport. This is evidenced by the fact that Pacific Coastal Airlines will use the West Kootenay Regional Airport in Castlegar when the need arises. To address the question on the magnitude of the potential economic impact or harm to the Greater Trail area based on a hypothetical relocation scenario by Pacific Coastal Airlines to re-locate air service operations to West Kootenay Regional Airport the project team completed the analysis detailed below. The results of the analysis indicate that approximately $2.2 million in additional costs to air travelers would be incurred on an annual basis.

10 Hypothetical Relocation of Pacific Coastal Airlines to West Kootenay Regional Airport from Trail Regional Airport: Increase in Travel Costs Increase in Travel Costs - Relocation of Pacific Coastal to Castlegar Traffic Segment Annual Current Blended New Blended Cost Increase Cost Increase Passengers Fare Fare Including HST Existing Trail Passengers - Air Fare 10250 $174.55 $192.55 $184,500 $206,640 Existing Trail Passengers - Surface Transportation to Castlegar 20495 $0.00 $13.69 $280,577 $280,577 Castlegar Passengers 70000 $174.55 $192.55 $1,260,000 $1,411,200 Total 100745 $174.55 $192.55 $1,725,077 $1,932,086 Current Total Annual Total Costs Cost Increase Costs Air Travel Cost Increase Passengers Private Vehicle Including HST (incl HST) Trail Passengers Shift to Private Vehicle 7175 $212.88 $246.46 $240,933 $240,933 Grand Total $1,966,009 $2,201,931

In terms of benefits from airport operational and infrastructure improvements there are a couple of major categories of users benefit groups that can be identified: existing users and benefits from new additional generated air traffic. The table below summarizes the airline customer traffic types, the likelihood and the nature of any direct economic impacts in the Greater Trail area.

Benefits from Airport Investment Category Airline Customer Traffic Type Likelihood & Direct Impact in Trail Area Existing Pacific Coastal Airlines: new Possible: continuation of same economic Users destinations such as Kelowna. impact trends outlined in this report. Not likely: incremental direct local Regional Airline economic impact doubtful because of New the low probability of service being Additional established. Traffic Air Charter Operator Not likely: small incremental local impact.

Existing Users - Scheduled Passenger Service Pacific Coastal Airlines: The results of the Traveller Survey indicated that almost half of the respondents spent one to five nights in locations other than Trail on their most recent trip. One quarter indicated that they spent zero nights in other locations.

11 This suggests that the air service functions as a significant commuter service for a number of travellers. When asked about the purpose of their trip that used the Trail Regional Airport the most frequent response cited was “visiting friends and family”, followed by a “mix of business and pleasure” and then for “business” purposes only. Consistent with the trip purpose almost two thirds of the Traveller Survey respondents indicated that they purchased their ticket between one to four weeks in advance. Survey respondents in an open-ended question revealed that a new short-haul service to a destination such as Kelowna for medical appointments, business or other purposes was of interest. However, before a new commuter air service could be offered to a location other than Vancouver International Airport’s south terminal from Trail issues such as “airport security” at Trail airport would need to be addressed. While a new commuter destination may be interest to some travellers it needs to be considered alongside the cost and travel impacts that may occur to the existing traffic base. Survey respondents overwhelming indicated that ease of travel, and cost of flying, from Trail Regional Airport were two of the most important factors in determining their existing use. Finally, an increase in commuter traffic may result in a need for better aviation fuelling infrastructure.

New Additional Traffic - Scheduled Passenger Service Airlines face an opportunity cost in terms of the choice of locations on where to deploy their aircraft. Thus, it is not surprising that it may be hard to attract another regional carrier to West Kootenay Regional Airport, or Trail. While regional airline service to a destination such as Calgary may be interest to some travellers it needs to be considered alongside the cost and travel impacts that may occur to the existing traffic base.

Survey respondents overwhelming indicated that ease of travel, and cost of flying, from Trail Regional Airport were two of the most important factors in determining their existing use. Finally, the size of the aircraft used in providing regional air service and the physical size of the Trail Regional Airport property would limit the nature of the infrastructure investments that could be made at the airport. Limiting the size of the aircraft that can visit impacts regional airlines’ economies of scale and how competitive they can be in terms of pricing their fare from a cost perspective.

It is unlikely that Air Canada Express will establish operations at Trail or offer service. Any incremental direct local economic impact is doubtful because of the low probability of service being established. There are two primary reasons for reaching this conclusion: the close proximity of their current base of operations, West Kootenay Regional Airport in Castlegar, and the presence of Spokane International Airport. Direct stakeholder discussions with a representative of Spokane International Airport indicated that the entrance of South West Airlines into the regional marketplace has had a major impact. This low cost operator has helped reduce airfares and increased passenger volumes in Spokane.

12 These passengers have access to a strong and competitively priced network of short and long haul destinations. As a result of this type of airline competition there is significant airline competition in the West Kootenay region in terms of airports and air service.

The major cost savings through the use of Trail Regional Airport rather than West Kootenay Regional Airport are due to lower airport and air navigation fees. The RDKB has been able to keep airport fees low due to the availability of volunteer labour. This calls into question the sustainability of low cost operations under the current airport management business model in the long run, or with increased traffic. However, It also calls into question the ability of the airport owner to generate financial returns to fund airport infrastructure investment from the operation of the airport. The research findings indicate that private interests, either individual travellers, employers, or the airlines capture the full benefits of this lower airport management cost structure.

The air cadet program benefits from the airport by providing for glider training and furthering the aviation qualifications of the cadets. On occasion the airport serves corporate owned, or chartered aircraft. From a general perspective the airport also provides an airstrip for itinerant aircraft encountering problems while traversing the mountainous terrain and needing a place to land.

Airport Related Risks Associated with Provision of Air Service at Trail

Airport Financing The project team does not foresee a situation in the near or mid-term future where sufficient commercial air passenger traffic will be generated to cover the cost of airport operations. Therefore, It is unlikely that additional airport costs will be fully recoverable from users because of the relatively small level of commercial air passenger traffic and general aviation activity and because the airport users who provide a social benefit to the community do not directly make a financial contribution to airport operations.

The risk characteristics in two areas where costs are likely to increase are as follows:

a) Increased operational costs from a non-volunteer business model; these costs would largely disappear if the air service does so they represent a variable cost to the RDKB.

b) Capital costs for infrastructure investment, which will persist even if the air service declines, vanishes, or grows. Thus, they represent a fixed sunk cost once an investment has been made.

As a result the financial burden will continue to rest on local taxpayers to the extent that additional monies cannot be obtain via senior levels of government. Ultimately, it is a political decision as to whether this is an appropriate cost to attempt to ensure that the mobility and social benefits currently provided by the airport are maintained. Since the economic benefits are largely captured by private interests; either by an employer, or traveller in the Greater Trail area a local taxation model to fund airport operations is consistent with the benefits received by many members of the local community who use the airport. It is recommended that the:

o RDKB engage in sensitivity analysis of the property tax impacts before any major airport infrastructure investment is made.

Airport Operations & Management The study team explored the issue of whether Trail Regional Airport was a good candidate for the provision of contracted management of the airport by a firm specializing in airport management to see if there were economies of scale that could be achieved in terms of costs and business development.

The project team concluded that private sector airport management firms consider what the existing situation is at an airport then they look at the potential to grow the business. They also examine what the situation is in terms of existing equipment, facilities, infrastructure etc. and whether they will need to be replaced. These firms also perform a market assessment to look at where the competition is and what the situation is at a specific airport property. Firms providing airport management services want to know the local demographics and whether the key industries are stable and if the airlines are stable. Airport management firms prefer longer-term contracts such as 15 to 20 years but if there is some uncertainty they will look at shorter contracts. Based on the above considerations it is unlikely that a specialized private sector airport management firm in analyzing Trail would find the opportunity sufficiently profitable, due to the close proximity of Castlegar. Thus some form of public sector management and oversight will be required for continuing operations and future development.

14 An alternative may be to contract airport operations on a cost basis. This scenario is unlikely to provide significant costs savings in airport management since the contractor would undoubtedly require additional resources to manage the facility to offset the work presently performed by the volunteers and also include the potential for some level of profit for their efforts.

While the positive economic impact generated by airline competition in the West Kootenay area is indeed an outcome of the operation of the Trail Regional Airport the sustainability of the current business model at the Trail Airport over the longer term is a topic that warrants serious discussion. Airlines such as Pacific Coastal Airlines and the general aviation community in Trail are price sensitive. Thus, there are some very real upward limits in terms of how the cost of airport operations can be transferred either directly to the customers, or indirectly onto the passengers. This will require the RDKB to continue focus on innovate ways to maintaining a low cost airport business model that is sustainable in the long term. It is recommended that the following actions be considered as ways to continue with providing a low cost airport:

o Have a discussion between the RDKB and the airport volunteers to determine their intentions, willingness and ability to recruit new volunteers to perform the tasks currently being undertaken if airport traffic was to increase. This would help establish a forecast of the baseline volunteer labour force that might be available and the level of training required to support airside activities.

o Consider collaborating with other partners to reduce airport management and operating costs. There is some merit in exploring a potential agreement with West Kootenay Airport in Castlegar to help provide regulatory and air service oversight by their airport manager and to provide training for maintenance staff etc. This could also extend to an advisory role on such things as Airport Capital Assistance Program. For those interested in the future direction of low cost airport operations, serious consideration of whether it is desirable for firms to engage in co-operative or competitive behaviour is required. Research by Song (2003) utilizes a conceptual framework called co-opetition: a mixture of competition and co-operation. Co-opetition suggests that firms engaged in the same or similar markets should consider a deliberate win-win strategy, rather than a win-lose one. Such a model may well help airlines industry and airport executives alike reconcile the often-conflicting evidence in the literature that suggests an either/or approach to a market development strategy. An important aspect of a co-opetition approach is that it must be a deliberate strategy choice on by two or more parties mutually agreeing to purse a specific course of action and it is not the accidental by-product of existing management actions.

15 The concept of co-opetition would seem to occupy the middle ground between the co-operative and competitive approach that typifies much of the local media coverage. Thus, it may well prove useful as concept for discussing issues such joint marketing of the West Kootenay airports to those outside of your local markets.

Airport Infrastructure Investment Recent rapid growth in passenger traffic is significantly influenced by the major capital projects (for example, the Waneta Dam expansion). As a result of temporary nature of major capital projects, there is unlikely to be sustained increase in long-term demand unless the economic activity generated (by these large capital projects) is replaced by some form of new economic activity of a similar magnitude. Since the operating phase of a dam infrastructure is less labour intense than the construction phase investment in improvements to Trail Regional Airport facilities to accommodate shorter-term demand growth represent an area of significant risk to the extent that an airport owner relied on this additional traffic as being representative of the base load demand for air travel. In addition to the possibility of declining passenger traffic, risks include increased costs due to regulatory requirements for adoption of standard security practices, and potential changes in airline competitive services, which would make the airport less competitive and perhaps redundant for scheduled service.

Specific principles that should be considered in terms of Trail Regional Airport business development and infrastructure investment decision-making include:

Airport Business Development o Recognize that infrastructure investments are part of a system, and need to be coherent with how the system will eventually evolve; o Act cautiously before focusing on a single course of action, and most especially on a single expensive airport project; o Think Complementarily, how does the proposed action provide distinct benefits that cannot be easily duplicated and help contribute to a robust distributed network of airports in the region.

16 o Scaled development of the site, for example by delaying runway expansion, or the full construction of a building so it meets immediate needs, o Design of flexible terminal building facilities to continue development as required, o Deferring investments until their need has been fully demonstrated.

West Kootenay Regional Airport There are many factors which impact on reliability of service into TRA and WKRA. Everything from weather reporting, the height of mountains, the approaches and different approach limits but it appears that the most significant aspect is the business models of the two carriers which allows one to provide a flexibility in service that the other can’t provide.

17 2 STUDY OBJECTIVES The Regional District of Kootenay Boundary (RDKB) owns and operates the Trail Regional Airport, located along Highway 22A, approximately five kilometers southeast of the City of Trail and within close proximity to the Canada-US Waneta Border Crossing.

The Trail Regional Airport’s nearest competitor, the West Kootenay Regional Airport, is located approximately 26 kms away in Castlegar, BC. Thus, the RDKB envisions “a synergistic role with other airports in the region to provide the most accessible airport in the West Kootenay”.

The KBRD’s goals for the airport include maintenance of existing scheduled air service to the Trail Regional Airport since competition from air service providers in the greater geographic area helps to keep air travel affordable. The RDKB also wishes to improve the reliability of t air travel in the region. . One potential tool to accomplish these goals is to undertake airport infrastructure development that will improve safe aircraft access and service to customers. The RDKB is also mindful that the airport plays a role in the full transportation and logistics activities in the Greater Trail geographic area and is part of the overall transportation network that business and citizens rely on. The RDKB therefore seeks to strengthen the relationship between the airport and the regional community and businesses.

Recently, the RDKB completed an Airport Master Plan to develop and facilitate future airport operations that may be required to maintain both current and/or future service level expectations. Prior to facilitating and/or advancing the initiatives outlined in the Master Plan, the RDKB wishes to complete an Economic Impact Assessment Study of the airport to evaluate and determine the full economic impact of the facility/service within the Greater Trail geographic area. The RDKB also wishes to know what the impact would be, if any, should the West Kootenay Regional Airport be successful in significantly improving their landing reliability. The RFP requirements indicated that there are two deliverables associated with this project work task:

o An economic assessment of the air transportation service industry in the Greater Trail area; o A complete evaluation and determination of the full economic impact of air transportation and its collective logistics activities in the Greater Trail geographic area.

3 DEMAND FOR TRANSPORTATION SERVICES 3.1 West Kootenay Demographic Trends BC population forecasts suggest a stable regional population over the next 10 to 20 years, with only modest growth anticipated.

3.2 West Kootenay Regional Economic Overview 3.2.1 Kootenay Boundary Community Profiles Trail The population of Trail was estimated at 7242 in 2010. The distribution of employment by Industry sector in 2006 based on census data is shown below:

Figure 3-1 Trail Employment by Industry Sector 2006

Trail Employment by Industry Sector 2006 Forestry Mining 2% 2% Other Services 43% Food and Agriculture 0%

Construction 5%

Other Goods- Producing 18%

Accom. & food Retail Trade 17% services Trans. & Wholesale 9% Warehousing Trade 1% 3%

The “Other Goods-Producing” category includes smelter operations.

Trail Major Industry The major industrial operation in Trail is the lead-zinc smelter. Following the merger of Teck Corporation with Cominco in 2001, Teck Cominco Metals Ltd operates the smelter. It includes one of the world’s largest fully integrated zinc and lead smelting and refining complexes and the Waneta hydroelectric dam and transmission system. The metallurgical operations produce refined zinc and lead and a variety of precious and specialty metals, chemicals and fertilizer products. Refined zinc production was 291,000 tonnes in 2011, up from 278,000 tonnes in 2010.

In September 2011 Teck announced plans to invest $210 million at their Trail Operations to significantly increase the capacity to recycle end-of-life electronics. The $210 million project includes the construction of a new slag fuming furnace and a settling furnace that will integrate into the existing lead smelting process.

19 Construction on the project will begin in 2012, with completion scheduled for 2014. In November 2011, Teck announced an additional investment of $125 million for installation of a new acid plant, which will replace two existing plants and is expected to deliver enhanced operating reliability and flexibility as well as improved environmental performance. Construction is scheduled to begin in April 2012, with the new plant expected to go into service in late 2013.3

The smelter operation has generated a number of green and high-tech spinoff companies geared to the metallurgical sector. Companies include Firebird Technologies, a new division of Montreal-based 5N Plus, which develops high-quality indium antimonide crystals for the electronics industry and which recently opened a new 40,000-square-foot facility. Firebird Technologies emerged from Teck’s research division in the 1990s before being bought by 5N two years ago. Teck supplies Firebird with the metals required for its technologies.

Others in Trail’s high-tech cluster include KC Recycling Ltd., which operates a major lead- acid battery recycling plant, with the lead processed at Teck’s metallurgical complex. As well, Toxco Waste Management Ltd., which established the world’s first lithium battery recycling operation south of Trail, is positioning itself to service the emerging electric auto industry. Toxco, which operates out of a 70,000-square-foot facility, collects and sorts alkaline batteries that are then sent to Teck to produce zinc. Teck Cominco is contracted to use its Trail smelting operation to handle and “refine” computer waste after it is collected4.

Trail Major Projects Columbia Power Corp. has commenced work on the $900 million Waneta Power Plant Expansion. The project involves a 335 MW expansion of the existing dam, by a subsidiary of Columbia Power Corporation. It includes the design and construction of a second powerhouse at the Waneta Dam on the Pend d’Oreille River, south of Trail, BC. The project has been certified under the BC Environmental Assessment Act. Three proponents developed proposals to construct the project: Peter Kiewit Sons Co., SNC- Lavalin Inc., and Bilfinger Berger - North America Construction Joint Venture. SNC- Lavalin Inc. was chosen for the $587 million design/build contract. In Aug 2010, a joint venture of Columbia Power Corp. and Columbia Basin Trust reached an agreement with Fortis Inc., for the development of the project. The project is anticipated to be complete in 2015.

3 Teck 2011 Annual Report p. 34. http://www.teck.com/Generic.aspx?PAGE=Teck+Site%2fInvestors+Pages%2fFinancial+Reporting+Pages% 2fAnnual+Reports&portalName=tc 4 “Small town Trail emerges as green, high-tech companies' hub” August 3, 2011 http://www.scrapmonster.com/news/small-town-trial-emerges-as-green-high-tech-companies- hub/1/2739

20 Rossland was designated as one of the 13 resort municipalities in British Columbia as a result of a 2007 agreement signed under the B.C. Resort Municipality Initiative with the Province5. Rossland’s population was estimated at 3554 in 2010. The distribution of employment by Industry sector in 2006 based on census data is shown below:

Figure 3-2 Rossland Employment by Industry Sector 2006

Rossland Employment by Industry Sector 2006 Forestry Mining 3% 1%

Other Services Food and 48% Agriculture 1%

Construction 11%

Other Goods- Retail Trade Producing Accom. & food 13% 15% Trans. & Wholesale services Warehousing Trade 7% 1% 0% The relatively high share of employment in the “Other Goods Producing” sector presumably consists primarily of employment at the Trail smelter.

Rossland Major Industry Based on BC Ministry of Forests data, there are two forest product firms located southwest of Rossland: Jones Ties and Poles operates a small sawmill, and Patterson Pole Ltd. produces utility poles.

Rossland Tourism Situated at the top of the long hill that separates Rossland from the neighbouring community of Trail, Rossland’s major tourism industry activities are centred on Red Mountain. Red Mountain Resort was recently rated in the top 10 elite resorts in North America by Forbes Traveller and one of the ultimate mountain towns by National Geographic Adventure Magazine, Thus, it is not surprising that the Red Mountain Resort partners with travel professionals and tour wholesalers from around the globe to market its product. Tour operator listings for Red Mountain indicate a market presence in other parts of Canada, Western United States, the South Pacific and Europe.

5 http://www2.news.gov.bc.ca/news_releases_2005-2009/2007CS0031-000527.htm

21 Winter activities in Canada’s Alpine Resort community focus on snowboarding, downhill, cross-country, cat, heli and backcountry ski and touring opportunities. The International Mountain Biking Association has recognized the Seven Summits mountain bike trail as ‘epic’. The area’s extensive trail network attracts both hard-core bikers and enthusiasts. Festivals, golfing, hiking and fishing round out the main components of the local tourism industry.6 Red Mountain Resort has an ongoing master plan that includes the construction of environmentally responsible condominium or single-family dwelling units. These new homes will feature spacious, luxury condos or single-family dwellings.7

Rossland Major Projects Red Mountain Ventures began undertaking the development and expansion of Red Mountain Ski Resort in 2005. The $900 million development is to be constructed in 5 phases over 15 years. The resort will be expanded from 1,200 acres to more than 4,000 acres. Plans include upgrading ski lifts and expanding ski terrain. Residential developments include 1,400 housing units, including 100 single-family lots as well as condominium and hotel units. Salmon Creek, a 150,000 sq. ft., two building condominium started construction in the summer of 2006. Hannah Creek, a Phase 2 development will consist of two buildings of 25 units. A 3000-acre beginner ski area will be the first of a 2,600-acre ski terrain expansion. A new quad chairlift completed construction, and a 75-unit boutique hotel. The $2.8 million conference centre has been completed ($2.8 million).

Montrose: the population of Montrose was estimated at 1046 in 2010. The distribution of employment by Industry sector in 2006 based on census data is shown below:

Figure 3-3 Montrose Employment by Industry Sector 2006

Montrose Employment by Industry

Sector 2006 Forestry Mining 2% 4% Food and Agriculture 0% Construction 3% Other Services Other Goods- 52% Producing 13%

Retail Trade 13% Wholesale Trade 0%

Accom. & food Trans. & services Warehousing 10% 3%

6 Kootenay Rockies Travel Guide 2011. 7 http://www.redresort.com/

22 As with Rossland and Warfield, the relatively large share of employment in the “Other Goods-Producing” category is associated with the Trail smelter operations.

Fruitvale: is mainly a residential area for the employees working in the industries located in and around the area. Fruitvale’s population was estimated at 2012 in 2010. The distribution of employment by Industry sector in 2006 based on census data is shown below:

Figure 3-4 Fruitvale Employment by Industry Sector 2006

Fruitvale Employment by Industry Sector 2006 Forestry Mining 3% 2% Food and Agriculture Other Services 0% 39%

Construction 8%

Other Goods- Producing 19%

Accom. & food Retail Trade services 18% 5% Trans. & Wholesale Warehousing Trade 6% 0%

Fruitvale Major Industry Atco Lumber operates a veneer mill with a capacity of 108 million square feet (3/8” basis) at Fruitvale. The ATCO plant is linked to the Kettle Falls International Railway’s (KFR) Kettle Falls Subdivision at Columbia Gardens by the International Rail Road Systems (IRRS) short line railway. IRRS purchased the line from Columbia Gardens to Salmo from BNSF in 1998. The portion of the line from Park Siding to Salmo was abandoned in 1998. In May 2010 IRRS was purchased by ATCO and continues to operate from Fruitvale to interchange with KFR. KFR interlines with BNSF at Chewelah Washington.

Grand Forks The population was estimated at 3998 in 2010. The distribution of employment by Industry sector in 2006 based on census data is shown below:

Figure 3-5 Grand Forks Employment by Industry Sector 2006

Grand Forks Employment by Industry Sector 2006 Forestry 16% Mining Food and 1% Agriculture 4% Construction 8%

Other Goods- Producing 4% Other Services Retail Trade Wholesale 41% 13% Trade 1%

Accom. & Trans. & food services Warehousing 9% 3%

Grand Forks Major Industry There are three major industrial operations in Grand Forks. International Forest Products Ltd. (Interfor) operates a sawmill with an estimated capacity of 197 million board feet (MMBF).8 Pope and Talbot operated the mill from 1969 to its purchase by Interfor in 2008.

Pacific Abrasives produces granulated slag in the community. The slag pile that provides the raw material for the Pacific Abrasives operation is waste from the Granby smelter that closed in 1919. Sufficient reserves exist to sustain operations for approximately 30 years. The slag is crushed and transported a short distance by truck to the rail loading facility in Grand Forks where it is screened, dried and loaded to railcars.

Roxul Inc. operates a plant producing mineral wool insulation in Grand Forks. Roxul Inc. is part of the Danish firm Rockwool International, the world's largest producer of mineral wool insulation with 23 facilities in 15 countries. Roxul purchased the Grand Forks mill in 1999 from Enertek Products International Inc. All products are currently shipped from the mill by truck.

Canpar operated a particleboard plant manufacturing components for hollow core doors in Grand Forks until 2007. This plant used waste softwood sawmill residues as raw material, including chip undersize, planer shavings and sawdust, and wood from one pulp mill.

8 “Acquisition of Three Sawmills from Pope & Talbot” Updated December 4 2007; Interfor http://www.interfor.com/pdf/Acquisition%20of%20Pope%20%20Talbot%20mills%20updated%20Dec%20 4.pdf

24 Raw materials were sourced from plants within a 150 km radius of the mill. Canpar shut down in December 2007, and the mill equipment was auctioned in July 2008. Roxul Inc purchased the land and building.

3.2.2 Central Kootenay Community Profiles Castlegar The population of Castlegar was estimated at 7879 in 2010. The distribution of employment by industry sector in 2006 based on census data is shown below: Figure 3-6 Castlegar Employment by Industry Sector 2006

Castlegar Employment by Industry Sector 2006 Forestry 11% Mining Other Food and 0% Services Agriculture 44% 1% Constructio Othern Goods-8% Producing Accom. & Trans. & 6% Wholesale food Warehousin Trade services g Retail Trade 16% 2% 7% 5%

Castlegar Major Industry The largest industrial employer in the Castlegar area is the Zellstoff Celgar pulp mill owned by Mercer International. The mill produces approximately 520,000 Air-Dried Metric Tonnes (ADMTs) annually. In 1993, a C$850 million rebuild and modernization transformed Celgar into a high quality, continuous process pulp mill with modern power generation and environmental treatment facilities. When Mercer completed the US$210 million acquisition of Celgar in February 2005, the mill had an annual production capacity of about 430,000 ADMTs. Mercer increased the mill’s capacity to 500,000 ADMT’s in 2007 through the $28 million "Project Blue Goose" project which is designed to achieve operational efficiencies, increase production and improve environmental stewardship, including reduced consumption of energy and chemicals. Additional process efficiencies have further increased annual production capacity to 520,000 ADMTs. Celgar also became a net exporter of electricity with the potential to fulfill a growing demand for "green" energy. Celgar currently employs approximately 422 people in its operations at Celgar.9

9 Mercer 10K Annual report, p. 22.

25 In 2010 Celgar completed its Green Energy Project. The C$64.9 million project included the installation of a second turbine-generator set with a design capacity of 48 MW to increase the mill's installed generating capacity to 100 MW, and upgraded the mill's bark boiler and steam facilities. In connection with the Green Energy Project, Celgar finalized a 10-year Electricity Purchase Agreement with BC Hydro under which it will sell electrical energy at "green' rates. Interfor operates a sawmill with a capacity of 264 mmbfm at Castlegar. The mill was formerly owned by Pope and Talbot and was purchased in the same transaction as the Grand Forks mill. Kalesnikoff Forest Products operates a sawmill with a capacity of 122 mmbfm at Thrums, north of Castlegar.

Castlegar Major Projects BC Hydro is proposing a $102 million upgrade of the spillway gates of the Hugh Keenleyside dam to meet flood discharge reliability requirements. The project is in the early Identification or Definition Phases and final costs are as yet uncertain. The project proponent is looking to have the project finished by the fall of 2013.

Nelson The population of Nelson was estimated at 9794 in 2010. The distribution of employment by industry sector in 2006 based on census data is shown below:

Figure 3-7 Nelson Employment By Industry Sector 2006

Nelson Employment by Industry

Sector 2006 Forestry Mining 3% 1% Food and Agriculture 0%

Construction 8% Other Services Other Goods- 54% Producing 7%

Retail Trade Wholesale 14% Trade 3%

Accom. & food Trans. & services Warehousing 7% 3%

Nelson Major Industry Springer Creek Forest Products owns a sawmill with a capacity of 118 mmbfm at Slocan, approximately 70 km north of Nelson on Highway 6. In May 2011 the company indicated the mill would be shut down indefinitely due to low lumber prices, exchange rates, and transportation costs, and because the mill’s wood waste market has dried up. The mill had been selling their sawdust and bark to Avista Power Corp. in Kettle Falls, Washington as hog fuel, but they no longer need it.10 Purcell Green Power Inc. is proposing a run-of-river hydro plant with a 90.5 MW capacity, flowing into the Duncan Reservoir consisting of power stations at Glacier Creek of 40.5 MW and Howser Creek of 50 MW. The $240 million Glacier/Howser/East Energy project has been selected in the BC Hydro 2006 call for power and is in the review phase under the Environmental Assessment Act. Project is registered under ecoENERGY for Renewable Power. The project was to commence in 2011 and be completed in the same year.

Nelson Tourism Nelson is surrounded by the rugged Selkirk Mountains and sits on the shores of the West Arm of Kootenay Lake. It is a community with vibrant arts and cultural scene, and a large local population of outdoor enthusiasts. Major attractions are Ainsworth Hot Springs, Arts & Culture, Capital Theatre, 350 Heritage Buildings, Kokanee Creek & Glacier Provincial Park and the Touchstone Museum of Art & History and Whitewater Ski Resort.11

The community's tourism links with recreational opportunities along Kootenay Lake is evidenced by the recent formation of the Nelson Kootenay Lake (NKL) Destination Tourism Marketing Organization. 12 It covers an area from Nelson (including Whitewater Winter Resort) Balfour, Proctor, Harrop, Ainsworth, Kaslo and Meadow Creek. The organization’s mandate is to actively market this region as a distinct four season tourism destination on behalf of its stakeholders and communities, in partnership with Kootenay Rockies Tourism and the provincial tourism authority, Tourism British Columbia. The organization's new logo and tag line is designed to attract first-time and repeat visitors from the regional rubber-tire market as well as from national and international markets. In 2008 Whitewater Ski Resort was purchased by Knee Deep Development, a Calgary based corporation. The company reviewed the existing Master Plan started to improve infrastructure and base area facilities in 2009. Expanded terrain, lift installation and real estate development are planned for the near future. When the Ministry of Tourism approved the Master plan in 2010 the resort expanded by 303 hectares and installed a triple chair December 2010.13

10 “Springer Creek Forest Products mill soon to be indefinitely idled” May 11, 2011 http://foresttalk.com/index.php/2011/05/09/springer-creek-forest-products-mill-soon-to-be-indefinitely- idled/ 11 http://www.discovernelson.com/htdocs/activities.html 12 http://www.bclocalnews.com/kootenay_rockies/nelsonstar/business/119441584.html 13 .http://www.skiwhitewater.com/whitewater_ski_resort_history.php

27 Nelson Major Projects Kootenay Lake Hospital initiated a redevelopment and facility expansion project at Kootenay Lake Hospital in 2009 to triple the size of the existing emergency department to 9,946 sq. ft. and establish a new CT scanner suite. Project will meet LEED Gold standards for Leadership in Energy and Environmental Design. The $15 million Emergency Department Redevelopment and CT Scanner Suite project is scheduled to be completed in late 2011. New Future Developments is proposing a 5-storey residential resort development will include an assisted living complex and a private marina. The $15 million Kutenai Landing Village Development project will proceed as market indicates.

3.2.3 Regional Employment Income The level of employment income in a region influences the demand for passenger air travel. The figure below reveals that among communities on the Highway 3 Corridor in the Southern Interior, Average Annual Incomes are highest in the communities such as those in the Greater Trail Area. This is attributable to the fact that a higher proportion of employment occurs in major industries such as coal mining in the Crowsnest Pass and smelting in the Greater Trail Area.14

The Lower Columbia Initiatives’ recently released “2012 Economic Outlook” indicates that Greater Trail employment incomes are driven by the metallurgy and healthcare sectors where with over three quarters (2,500) of those in Trail working for either Teck Trail Operations or the Interior Health Authority—the area’s residents have enjoyed wages and employment opportunities that have proven to be recession resilient. Mr. Sandy Santori, the executive director of the Lower Columbia Initiatives Corporation (LCIC) indicated in a media release that “those industries are rosy right now, a factor that has helped Trail weather the recent financial downturn that has afflicted most areas of the West Kootenays”. In the LCIC’s “2012 Economic Outlook” the economic future of the region is positive, he said. “With over $1.25 billion in projects currently underway, the 2012 Economic Outlook … can be summarized as an economic boom in the short-term, and as stable with steady incremental growth in the long-term.15

14 Source: BC Stats Community Profiles. 15 http://www.lcic.ca/2012/05/positive-outlook-for-the-lower-columbia-region-economy/

Figure 3-8 Average Annual Income by Community 2008

Average Annual Income 2008

$60,000 $50,000 $40,000 $30,000 $20,000 HWY 3 Communities $10,000 BC Average $0

3.3 Regional Transportation – Nodes and Networks 3.3.1 Overview To gain a better understanding of role that Trail Regional Airport plays in the regional transportation network there are three important factors to consider: nodes, networks and demand.

Nodes: are the beginning and end points for transportation between geographic areas. Vancouver International Airport is an example of the most important aviation node in British Columbia because it is the major starting and ending point for the movement of passengers and the shipment of air cargo to and from the Canada. The presence of a transport node is typically important economically because it can aid in the development of a city due to jobs for example. In other instances, the presence of two aviation nodes (airports) in close proximity to one another may serve to either enhance economic activity through the provision of services that relieve congestion, or offer increased consumer choice. In instances where there are high costs to the development of a transportation infrastructure, nodes in too close a proximity may compete for scare capital dollars with limited net benefit to a region. Whether the presence of a specific type of transportation node such as an airport services to increase the amount of economic activity in region is heavily influenced by the nature of the competing transportation networks, and the nature of demand for travel. However, in any analysis it is important to identify and distinguish the economic impact arising from a transportation service (airline) and the economic impact that arises from a specific transportation node such as an airport. The primary method for analyzing the separate impacts of the transportation service and the transportation node is to identify the physical location of where the monetary benefits flow, rather than attributing all economic activities to a single airport.

29 Since none of the airlines serving either Trail Regional Airport, or the West Kootenay Regional Airport are located in either community in terms of any activity beyond ticketing and passenger handling the bulk of the direct economic benefits from the purchase of an airline ticket represent a leakage to the local economy. This does not mean that a transportation node does not perform a valuable social role in a community for those with a need, or desire for increased mobility. Rather, it is simply recognizes the fact that the geographic location of the transportation service providers network for such tasks as management, marketing, maintenance and operations are generally the physical locations where the most significant economic benefits are likely to accrue. These types of commercial activities are often very limited at smaller transportation nodes and more highly developed at larger centers but may not necessary occur at the site of a specific transport node. The changing nature of the helicopter industry and the resulting trend to have bases physically located at an off airport site and fly supplies, material, equipment and people to a remote work camp is perhaps one of the most visible examples of how a node can serve an important transport function but the economic benefits may largely accrue in another location.

Transportation Demand: is based on the public demand for different types of transportation. For example if residents of an area are experiencing high aviation fares, poor or unreliable service on a frequent basis, public demand might support the development of an airport in the belief that increase competition will fully address regional transportation needs. However, analysis of the demand for aviation services alone is insufficient to determine if additional airport infrastructure investment would yield economic benefits. Analysis of the supply of aviation services and the technical factors influencing the reliability of air service are just two of the main factors in addition to demand that must be considered. However, it is important to note that the size of the local population and the nature of the local economy play the lead roles in influencing the demand for transportation services.

The section below will more fully describe the major transportation nodes and networks that impact the provision of air service in the Greater Trail area. This will be followed by a section that more fully explores the nature of the demand for air transportation in the community.

3.3.2 Highways & Airports The geographic location of the communities, the nature of the highway network and the location of airports and heliports influence the regional transportation system in the Kootenay Boundary region. The primary function of the Highway 3 Corridor is to serve origin and destination traffic within the corridor, rather than through traffic. Traffic is concentrated on the eastern and western ends of the corridor. As such, cost effective and reliable air service is important to the West Kootenay area.

Figure 3-9 Highway Network

Airports

Figure 3-10 Airports in South Central BC

The transportation network in the Kootenay Region is influenced by the presence of two regional airports, a number of heli-ports and two international airports that will be discussed in greater detail in the paragraphs below.

Trail Regional Airport The Trail Regional Airport serves the approximately 31,000 residents of the RDKB and some of the neighbouring 61,000 Central Kootenay residents. Located in Trail, the airport is served by daily flights to Vancouver International Airport’s South Terminal. Direct discussion with Trail Airport volunteers indicated that air traffic consists of 1,032 annual scheduled aircraft movements (approximately 86 flights per month), and 20,495 annual passengers. Pacific Coastal Airlines also offers air cargo service to Trail from their base at Vancouver’s South Terminal.

For travel within the region there are relatively few ground transportation options at Trail Regional Airport. Two car rental companies provide service at the airport: Budget and PractiCar. In addition, Rossland based Sweetfield Shuttle is available for airport pickups and private hire. There is no public transit to the Trail Regional Airport and Champion Cabs provides limit taxicab service.

West Kootenay Airport Located in Castlegar the airport offers daily flights to/from Vancouver and Calgary. Air traffic consists 74,000 annual passengers and of 12,500 annual aircraft movements.16 Aircraft fuelling facilities are available for both aviation gasoline (avgas) and jet fuel.

16 http://www.wkrairport.ca/

32 Aircraft maintenance services are available from Southern Aircraft Services and Selair Pilots.

For travel within the region there are a number of ground transportation options including two car rental companies located within the West Kootenay Regional Airport: Enterprise and Budget. In addition, Queen City Shuttle and Charters operates an Airport Shuttle daily between Castlegar and Nelson. Two taxi firms operate in Castlegar: Castlegar Taxi & Transportation Services and Champion Cabs. Public Transit includes the following three routes: o Route 3 picks up at Airport and can connect to other service in the Castlegar area, including region communities, o Route 99 operates between Nelson and Castlegar. Connection to Route 9 will deliver you to the doorstep of the Airport, o Route 9 operates between Castlegar and Trail, and includes a stop at the Airport.

The charts on the following pages summarize the aircraft movements in Castlegar.

Figure 3-11 Castlegar Annual Aircraft Movements Castlegar Annual Aircraft Movements 2000 - 2011

30000 25000 20000

15000 Local movements 10000 Itinerant movements 5000 0

Figure 3-12 Castlegar Domestic Aircraft Movements by Type Castlegar Domestic Aircraft Movements by Type of Operation

14000

Government military 12000 movements

10000 Government civil movements 8000 Private movements 6000

4000 Other commercial movements

2000 Air carrier movements, level IV-VI 0

Figure 3-13 Castlegar Aircraft Movements by Power Plant Castlegar Aircraft Movements By Power Plant

14000 12000 10000 Gliders 8000 Helicopters 6000 Piston engines 4000 2000 Turbo-propellers 0 Jet engines

The graphic below provides the location of heliports on South Central British Columbia. It is important to note that many heliports are located on sites that are not directly shared with winged aircraft and this has the effect of reducing the demand for airport services.

Figure 3-14 Heliports in South Central BC

Canadian Rockies International Airport Canadian Rockies International Airport is located on Airport Access Road, a short distance off Highway 95A, approximately 15 km from Cranbrook and 20 km from Kimberley. Airlines providing scheduled service include:

o Air Canada Express offers air service to the Main Terminal at the Vancouver International Airport and also flies to Calgary in conjunction with Air Georgian. o Integra Air offers direct nonstop service to the Executive Flight Centre at the Edmonton International Airport with convenient flight times to connect with Fort McMurray and beyond. o Pacific Coastal Airlines flies to and from the South Terminal at the Vancouver Airport, linking the East Kootenay Region to the Lower Mainland with connections to Vancouver Island.

Both Air Canada Express and Pacific Coastal advertise the availability of air cargo services. High Terrain Helicopters provides service for industries such as forestry and for heli-skiing. Ground transportation includes taxis and Backside Tours Inc. who offers chartered ground transportation to a number of area ski resorts and golf courses. They also offer guided trips of the Canadian Rockies region. Canadian Rockies International

35 Airport is a designated international point of entry. Custom services are available on request with prior notice.17

Figure 3-15 Cranbrook Domestic Aircraft Movements by Type Cranbrook Domestic Aircraft Movements by Type of Operation Government military 35000 movements

30000 Government civil movements 25000 Private movements 20000

15000 Other commercial 10000 movements

5000 Air carrier movements, level IV-VI 0 Air carrier movements, level I-III including 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 foreign air carriers

The chart below provides a comparison of Castlegar and Cranbrook in terms of air carrier (Class I-III) movements18. The chart indicates that both airports experienced a decline in traffic from 2000-2001. This is probably due to the AC-CP merger; however Cranbrook recovered while Castlegar did not. It is possible that some of this air traffic diverted to Trail as a result of the introduction of scheduled air service by Pacific Coastal Airlines in the last six years. Nevertheless the chart does show that the regional demand for air traffic has fluctuated over the last twelve years and has not been subject to strong growth pressures.

17 http://flycanadianrockies.com/about 18 Class I-III air carriers include commercial airlines with more than $2 million in annual revenue.

Figure 3-16 Castlegar and Cranbrook Aircraft Movement Comparison Castlegar and Cranbrook Air Carrier ACM 2000 - 2011

10000 9000 8000 7000 6000 Castlegar Total Air 5000 Carrier 4000 3000 Cranbrook Total Air 2000 Carrier 1000 0

Spokane International Airport (SEG) Spokane International Airport (SIA) Master Plan documents indicate that SIA is the second busiest airport Washington State in terms of passenger and cargo service. Total passenger movements are approximately 3.0 million. Airport officials indicated to the study team that up to 2.5% of their passengers (75,000) are expected to be from Canada. Spokane is approximately 230 km by road from Trail, with an estimated driving time of 3 hours.

The airport’s service areas vary by customer type. For commercial scheduled air service SIA draws travellers from a large region because Spokane is an economic hub. As a result, the service area is vast and includes eastern Washington, northern Idaho, western Montana, and southern British Columbia, Canada.19 Direct conversation with Airport officials indicated that their prime market is Spokane and Coeur d’ Alene area with a population of 600,000 people.

The major scheduled passenger carriers serving the airport include Alaska Airlines, Delta Airlines, Frontier Airlines, Southwest Airlines, United/United Express and US Airways. Direct non-stop service is offered to the following markets: Seattle, Portland, San Francisco, Oakland, San Jose, Las Vegas, Phoenix, Boise, Salt Lake City, Denver and Chicago. Air cargo carriers include Federal Express and United Parcel Express.

19 Spokane International Airport Master Plan (January 2011 Administrative Draft), retrieved July 10, 2012. http://www.meadhunt.com/client/Spokane/default.html

37 The chart below, provided by the Spokane International Airport’s Director Marketing/Public Relations, demonstrates the geographic reach of air service originating in Spokane.

Figure 3-17 Spokane International Airport Service

The following graphs on the following page demonstrate the historical pattern of total passengers and cargo volume at Spokane International Airport.

38 Figure 3-18 Spokane International Total Passengers Spokane International Airport Total Passengers (1990-2011)

4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Figure 3-19 Spokane International Total Cargo Spokane International Airport Total Cargo in Tons (1990-2011)

80,000.00 70,000.00 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Spokane Airport officials indicated to the study team that the Teck plant in Trail, BC attracts passenger traffic from professionals in various industries including software development. These specialists travel from a wide variety of destinations before arriving in Spokane and accessing the Trail area by road. Another factor influencing air traffic by Canadian travellers through the Spokane airport is the historically high value of the Canadian dollar relative to the US dollar. This along with Internet based comparison- shopping for airfares makes it attractive for some Canadians to travel to Spokane to use the airport.

39 Fares are lower, and the airport has tried to accommodate visitors by ensuring 24-hour custom services. Many Spokane hotels offering free parking to airport guests and some hotels have a shuttle to the airport, or passengers are served by an effective cab service.

3.3.3 Discussion of Survey Findings As part of the research for the Trail Regional Airport Economic Impact Assessment Study an on-line confidential survey of Employers and Travellers was conducted during the period June 23 to July 25, 2012. During that period the on-line survey collected over 200 responses. Summary information and graphics are provided in the respective Appendices and commentary and analysis on the research findings are provided in the main body of this report. The survey data contributed to the primary research objectives of documenting the role that that the Trail Regional Airport plays within the West Kootenay area transportation network. It also makes a significant contribution to helping better understand the nature of the demand for air service.

Employers Employer Survey respondents from the service sector accounted for the most significant portion of participants. Retail, government, and the non-government sector were also well represented. It is instructive to note that participation from employers in the tourism sector was the lowest in terms of the types of organizations responding.

The vast majority of Employer Survey respondent’s local place of business to the Trail Regional Airport was under 20 kms. However, there were a few organizations whose place of business was located beyond this distance.

The Employer Survey respondents indicated that the Trail Regional Airport (and the existing air service provider) plays an essential role in meeting the needs of business people, their associates and customers who needed to travel between Trail and the Vancouver/Lower Mainland. When provided an opportunity to respond to an open ended question regarding their purpose for business travel survey respondents indicated that business meetings, attendance at conferences/conventions, to participate in training opportunities were the most frequently cited reasons. However, it is important to note that Employers also used the Trail Regional Airport for accessing destinations beyond the Lower Mainland. Respondents also indicated that travel was undertaken for medical purposes and for shopping and entertainment purposes. One respondent indicated they travelled inbound using the Trail Regional Airport to work in a local clinic.

Given the multiple reasons for Employer travel it is not surprising that Employers indicated that their organizations, or their customers, use the Trail Regional Airport more than six times per year and less than ten percent indicated that they did not use the Trail Regional Airport at all.

40 At the present time the Trail Regional Airport plays a modest role in terms of the transportation of supplies, materials, for business correspondence, or as a hub material that needs to be sent by air as part of courier service. However, the impact of some of the large multi-year capital projects occurring in the region may be having some impact in terms of the use of the airport for “cargo” type purposes. Approximately 55% of the Employer Survey respondents indicated that they use the airport more than six times per year for the transport of goods rather than people.

Employers participating in this survey by a wide margin did not use the Trail Regional airport for company owned, or chartered aircraft. However, a small minority of employers did use the airport for company owned, or chartered aircraft.

A very strong majority of Employers indicated their customer use the Trail Regional. Yet, almost half of the survey respondents indicated that they thought their customers were only “somewhat aware” of the provision of air service in the community.

When Employer Survey respondents were asked, “How would your organization be affected if the Trail Regional Airport was not available to you?” a small majority (52%) of respondents indicated that their staff would have flown to another airport; approximately 36% indicated that their staff would have travelled by another mode. A small minority (6.5%) indicated that their staff would not have travelled to/from the Greater Trail area and/or they would have had to adjust their business practices to meet client needs (6.5%).

Perhaps not surprisingly the Employer Survey respondents indicated that frequency of air service (72%), destinations served by airlines (52%,) and cost of air travel (47%) was very important in determining their organizations use of the Trail Regional Airport.

When Employer Survey respondents were provided with an opportunity to comment on whether scheduled air service to Trail Regional Airport provides any cost savings to their organizations the overwhelming majority (97%) indicated that it does. The typical open- ended responses suggested that business travellers received benefits including lower air fares, more efficient travel to corporate head offices in Vancouver, reduced travel time and expense, and greater reliability than alternative air service. It is important to note that the list of benefits cited by the Employer Respondents are all private cost savings and thus support the use of the “Collection of Benefits” economic impact analysis that appears later in this report.

Finally amongst the Employer Survey respondents it is a reasonable comment to suggest that this segment of the market represents a core level of demand that constitutes a secure customer base. This is evidenced by the strong majority of respondents who were “very satisfied” with their use of Trail Regional Airport, the overwhelming majority who indicated they “definitely will” use the airport again in the future and “definitely have” recommended the use of the airport to others.

41 Travellers The vast majority of Traveller Survey respondents indicated that the Greater Trail area was the origin of their most recent outbound trip using the Trail Regional Airport. The Lower Mainland area was identified as the dominant origin of their most recent inbound trip to that required the use of the airport.

When asked about the purpose of their trip using the Trail Regional Airport the most frequent response cited was “visiting friends and family” (36%), followed by a “mix of business and pleasure ” (26%) and then for “business” (19%) purposes only. Consistent with the trip purpose almost two thirds of the Traveller Survey respondents indicated that they purchased their ticket between one to four weeks in advance.

Traveller Survey respondents indicated that they most frequently use the Trail Regional Airport one to two times per year (39%), with a significant number making use of the airport three to four times (34%) in an typical year. A very small percentage of survey respondents indicated that they did not use the Trail Regional Airport.

When asked how their most recent trip would have been affected if the Trail Regional Airport was not available approximately half of the Traveller Survey respondents indicated that they would have flown to another airport and a little over one third indicated that they would have travelled by another mode. A small percentage of respondents (9.4%) indicated that they would not have travelled to the Greater Trail area, or would have visited another destination in the region (3%).

As in the Employer Survey results, the Traveller Survey respondents indicated that destinations served by airlines (57%), cost of air travel (53%) and frequency of air service (49%) was very important in determining their use of the Trail Regional Airport.

Over one third of the Traveller Survey respondents indicated that they did not stay overnight in the Greater Trail area on their most recent trip using the airport. However, almost one third of the respondents indicated that they stayed more than ten nights in the Greater Trail area. Thus, it is possible that the major capital projects that are being undertaken in the area are requiring the use a non-resident labour force that is traveling to the area via the Trail Regional airport.

Almost half of the respondents indicated that they spent one to five nights in locations other than Trail on their most recent trip. One quarter indicated that they spent zero nights in other locations. This suggests that the air service functions as a significant commuter service for a number of travellers.

Amongst the Traveller Survey respondents it is a reasonable comment to suggest that this segment of the market represents a core level of demand that is fairly secure customer base. This is evidenced by the strong majority of respondents who were “very satisfied” with their use of Trail Regional Airport, the overwhelming majority who indicated they “definitely will” use the airport again in the future and “definitely have” recommended the use of the airport to others. This group of travellers, were slightly more satisfied than the Employer Survey respondents, perhaps owing to their less frequent use of the airport.

3.3.4 Airports in Close Geographic Proximity – Comparative Insights The project team will now review the insights that can be gleaned from comparing the experience of other communities were there are airport in close geographic proximity. To increase the relevancy of this analysis the project team will focus on communities and airports that are directly comparable to the situation at Trail Regional Airport and the West Kootenay Regional Airport. Thus, our analysis will preclude a discussion of aviation services provided to communities on Vancouver Island where floatplanes compete directly with services offered at airports in Nanaimo and Victoria for service to Vancouver. Likewise, a comparison of situations where there is a large urban area (such as the Lower Mainland) and competing airports such as Abbottsford International Airport and Vancouver International Airport along with significant general aviation airports in Maple Ridge, Langley and Boundary Bay are beyond the scope of this analysis.

Although the Trail Regional Airport and the West Kootenay Regional Airport situation is unique; in the opinion of the study team the best comparable example of a relatively small community airport with scheduled passenger service in relatively close geographic proximity to other airports is Dawson Creek British Columbia. Dawson Creek airport is near two other regional airports: Fort St. John, B.C.; and Grande Prairie, Alberta. Fort St. John airport (North Peace Regional Airport) is located 73 highway kilometres north of Dawson Creek. From there Air Canada Express offers direct flights to Vancouver while Central Mountain Air offers direct flights to Prince George, Fort Nelson and Edmonton (there are also connects to Kamloops and Kelowna). One hundred and thirty road kilometers to the southeast is Grand Prairie airport, with scheduled passenger air service to Edmonton and Calgary provided by Air Canada Express and WestJet.

The study team will compare three key issues: the demand for air travel, the level of taxpayer financial support and airport infrastructure development in terms of a runway expansion to ascertain the key research findings.

Demand for Air Travel A 2012 study entitled “Passenger Leakage Study” for Dawson Creek Airport suggests that the total passenger leakage of air travellers from the airport’s primary catchment area was between 58,310 and 61,000 Origin/Destination passengers per year.

43 The study also concluded that in determining the market potential for any new air service in Dawson Creek would be determined by three key factors: better flight schedule, better price and non stop flights. The authors of the report suggest that Dawson Creek is a market characterized by limited schedule availability, to only a few destinations, with limited connectivity onward, and what is essentially single carrier served markets and high airfare. Without discussing the reasons why airfares from Grand Prairie were 40% to 60% lower than Dawson Creek the authors note that such price difference make it an easy choice for travellers who are not only price sensitive, but looking for choice of airlines offering a greater range of final destinations, to make a decision regarding the use of an airport other than Dawson Creek. While Spokane International Airport is a bit further in distance from Trail than Grand Prairie is to Dawson Creek both communities like many in Canada are prone to some form of passenger leakage for scheduled air service.

The author of the Dawson Creek Leakage study concludes by suggesting that a new air service into Dawson Creek, with the lower fee structure, no Airport Improvement Fee, and no public parking fees, has the potential to attract customers that are presently be lost to other airports. However, it is important to note that the author of the “Passenger Leakage Study” fail to account for the fact that these “competitive advantages” are presently in place and require no change in airport policy at Dawson Creek.20 The authors of this present report suggest if air traffic leakage is indeed occurring (at the rates suggested in this report) then there must be factors beyond the three factors mentioned in their study. The present authors of this present study also suggest that it would be difficult and perhaps impossible for users to pay the cost of airport operations and infrastructure development at Dawson Creek based on their present business model. In addition, any new airport costs for travellers, or airlines is likely to increase the price discrepancy between Dawson Creek and Grand Prairie airport. Dawson Creek airport runs the very real risk that an increase in passenger service levels will result in increased airport operating costs that would need to be covered by the local tax base, or by infrastructure grants from the senior levels of government.

Level of Taxpayer Financial Support Earlier in this section of the report the topic of transportation nodes was introduced. It is worth repeating the statement that the presence of a transport node is typically important economically because it can aid in the development of a city due to jobs for example. In other instances, the presence of two aviation nodes (airports) in close proximity to one another may serve to either enhance economic activity through the provision of services that relieved congestion, or increased consumer choice.

20 The Dawson Creek Airport Sustainability Report indicates that Mr. Ian Darling is contracted by the City through his company Taygus Management Ltd.

44 In instances where there are high infrastructure costs to the development of a transportation infrastructure, nodes in too close a proximity may compete for scare capital dollars with limited net benefit to a region.

The 2011, Dawson Creek Airport Sustainability Report observed that it is a “cold fact is that no small airport is profitable. Every airport depends on grants and subsidies of some form, whether they come from federal, provincial or municipal governments.” The 2011, Dawson Creek Airport Sustainability Report states that “The City of Dawson supports the airport financially by subsidizing the annual operating costs of the airport approximately $500,000 per year. This requires use of general tax revenue that reduces the opportunity to invest in other areas of the community. The only way to reduce the amount of the subsidy is to seek increases airport revenues.” The report mention the fact that airports earn revenue from six key areas:

1. Airplane Landing Fees 2. Vehicle Parking Fees 3. Concession Fees 4. Leases and Rents on Lands and Hangars 5. Airport Improvement Fees 6. Fuel Fees

We provide a more detailed analysis of airport revenue sources in this report. The analysis will show that that larger airports have a greater capacity to generate concession fees and diversify revenue streams from activities such as property and non- aviation uses of airport lands than a smaller airport. Trail Regional Airport and Dawson Creek Airport and other smaller airports all face challenges in increasing revenue from airport operations in the face of price sensitive customers and alternative airport nodes offering competitive air service. In terms of airport business models we note that Fort St. John and Cranbrook airports each earn sufficient revenue to both make some contribution to capital. Like many other smaller airports in BC they do require financial assistance from government to fully cover the cost of capital investment.

Infrastructure Development – Runway Extension The 2011, Dawson Creek Airport Sustainability Report considered the issue of infrastructure development. While not exactly the same as the situation at Trail Regional Airport the report concluded that extending the Dawson Creek Runway would cost between $8 to $14 Million. The consulting team for the Dawson Creek Airport Sustainability Study noted that while an extended runway would provide more options, the desire for larger aircraft does not seem warranted in the short term. A decision on the extent of the runway extension (1,000 or 1,500 feet) will be a result of the success of the marketing studies, the liaison with industry, the continued economic growth in the region and the amount of money available to the City for the expansion. While many people in the community seem to feel that grant money is readily available, the amount of money required for the runway extension may be difficult to access.

The Regional District of Kootenay Boundary is also likely to face infrastructure development pressures from aviation enthusiasts that may not be shared equally by all members of the community. The present study team concurs with the authors of the Dawson Creek study that a major runway improvement project should be accompanied by careful analysis of the incremental benefit such an investment would contribute to both airport revenue generation and economic impact in the region.

4 TRAIL REGIONAL AIRPORT: CURRENT AIR TRAFFIC ANALYSIS 4.1 Airport Operations & Infrastructure Airport infrastructure consists of one 4,000 ft. (1,219.5 m) by 75 ft. (22.7) asphalt runway. The runway is constrained by the current airport boundaries, which limits its capacity to handle larger aircraft. There is a small terminal building located on one of the Aprons. The current terminal, which is a leased area in the clubhouse of the local flying club, is very constrained in space and amenities and does not afford a reasonable level of service to air passengers.

Services available at the airport include Aviation 100 LL fuel and Jet A fuel.

The utility systems at the airport are practically nonexistent and the Master Plan has observed that this serves as a constraint to marketing much of the airport land for commercial development.

The airport is partially funded from fees paid by the current air service operator with any budgetary shortfall covered by property taxes from the contributing communities.

4.2 Scheduled Air Service Northern Hawk initiated and operated scheduled air to Trail Regional Airport in the 2004 to 2005 period. Pacific Coastal Airlines entered the scheduled air service market in Trail in 2006.

Pacific Coastal Airlines operates a twice-daily scheduled service in the winter and 3 flights per day in the summer between Vancouver International Airport (South Terminal) and the Trail Regional Airport, providing convenient and low-cost air transportation to the Lower Mainland with connections to other destinations in British Columbia and beyond.

Figure 4-1 Scheduled Air Service – Annual Passenger Traffic Trail YEAR 2006 2007 2008 2009 2010 2011 Passenger 7,058 14,711 13,810 11,336 15,456 20,495 Volume

The chart below provides a summary of the passenger traffic at Trail Regional Airport for the period 2007 through 2011.

Figure 4-2 Trail Regional Airport – Monthly Passenger Traffic Trail Regional Airport Passenger Traffic (By Month 2007 through 2011)

2,500

2,000 2007 1,500 2008 1,000 2009 500 2010 - 2011

Passenger traffic was reduced from previous levels in 2008 and 2009, a period of reduced economic growth in the province. Scheduled flight operations were affected in early 2010 due to security protocols during the Winter Olympics in Vancouver.

The recently completed Trail Regional Airport Master Plan 2011-2031 (Master Plan) indicates that the success that Pacific Coastal has enjoyed at Trail was attributable to a number of factors including the belief that Trail provides higher reliability of air access in winter time, the strong community support for the airport and the carrier service and the low cost of operation enjoyed by the carrier

In 2011 annual passenger traffic volume at the airport was approximately 20,000 passengers, or about 55 people per day. In order to determine the size of the facilities at the airport, the associated peak activity levels were established in the Master Plan.

47 The Base Case was established at around 55 passengers (enplaned and deplaned) with the possibility that this could increase to 75 passengers in 20 years, in the High Case demand scenario, an increase of approximately 1 peak period passenger per year.

4.3 General Aviation Overview In terms of general aviation activity, the Trail Regional airport can accommodate air charters, business and personal aircraft. Additionally the British Columbia Air Ambulance Service uses the airport as its primary access point for servicing patients at the Kootenay Boundary Regional Hospital, located within a 10-minute drive to the City of Trail. The Master Plan observed that aviation related commercial activity at the Trail airport has limited prospects given the ample competing supply of airport lands in the region. However, it is beneficial to take a closer look at the trends driving general aviation activity.

General Aviation (GA) is an important segment of the overall air traffic in Canada. In 2007 the GA fleet accounted for nearly 80% of the total Canadian aircraft fleet.21 The sector includes private, government, military, and small commercial non-scheduled and air industrial activities. Examples of GA activities include: o Aviation supported businesses, o Charter and Corporate aviation activity, o Flight/Site Seeing, o Flight Training, o Law Enforcement, o Heli-Hiking & Heli-Skiing o Medevac, o Personal business flying, o Recreational aviation, o Spraying, o Surveying, o Wildlife Management.

Due to the very broad nature of the GA sector and data limitations it is difficult to capture the full extent of economic importance of GA activity in a region. The information and analysis contained in the following paragraphs uses existing secondary data sources and the feedback and comments received from stakeholders by the study team.

21 LPS Avia Consulting (2007), ‘ECATS Phase II General Aviation Assessment’, prepared for Transport Canada Aviation Statistics, Forecasts and Economic Analysis, p. 1-2.

48 It is also important to note that the demand for these types of services is driven by the primary demand activity (the reason an aircraft is required) rather than the presence of airport infrastructure since many of the GA activities take place outside of an airport’s physical boundaries for economic, business or other reasons.

4.3.1 Registered Aircraft No single data source accurately captures the size of the general aviation market in British Columbia. Analysts must often use existing provincial data sets to draw insights into the nature of regional transportation markets. The data used in this airport marketing study is no exception. Transport Canada reports that civil aviation personnel licenses and permits in British Columbia declined by 1.2% between 2008 and 2009.

The rate of decline was slightly higher than the national average of 1%. In 2009, 12,322 BC residents had a current civil aviation personnel license. Presently there are 4,934 aircraft registered in British Columbia. This information indicates the BC civil aviation marketplace is characterized by a ratio of 2.5 civil aviation license holders per every registered aircraft.

A major portion of general aviation activity at small airports is typically associated with aircraft based on site. The figure below depicts the distribution of registered aircraft in the West Kootenay Region.22 It is important to note that due to operational requirements or business opportunities some aircraft may not actually be resident in the registered locations. Figure 4-3 West Kootenay Registered Aircraft Population Aircraft Category Base Location Total Aeroplane Castlegar 16 Creston 24 Grand Fork 15 Nelson 37 Trail 11 Aeroplane Sub-total 103 Gyroplane Creston 1 Gyroplane Sub-total 1 Helicopter Castlegar 2 Creston 1 Grand Fork 2 Nelson 7 Trail 0 Helicopter Sub-total 12 Grand Total 116

22 Source: Transport Canada Civil Aviation Register Database.

49 The population of registered aircraft in the West Kootenay area totals 116 as indicated in the table above. Single engine fixed wing piston aircraft dominate with 88% of the fleet, followed by helicopters with 11%. Communities with registered helicopters include Castlegar, Creston, Grand Forks and Nelson

Figure 4-4 West Kootenay Registered Aircraft by Location

Analysis of this data highlights typical characteristics of the general aviation industry in West Kootenay area of British Columbia. The first characteristic is the dominance of light single engine piston aircraft in the fleet. These small aircraft represent the demand for aviation infrastructure and support services from within the region.

4.3.2 Charter & Company Owned Aircraft Direct stakeholder consultation indicates that Northern Thunderbird Air uses the Trail Regional Airport one to two times per year for air charter activity. The company typically does not purchase aviation fuel at the airport and pilots generally do not have a need to travel into the community. The company typically uses aircraft such as a Beech 1900 or Beech 350.

Feedback from the Employer Surveys indicated that at least one company in the Greater Trail area has used Trail Regional Airport for charter, or company owned aircraft.

4.3.3 Recreational Flying & Flight Training in Trail Flying Club Direct stakeholder interviews indicate that the Trail Flying Club has about 55 members: 20 who fly; 10 who own their own aircraft, 10 model planes operators; and 15 who have a general interest in aviation (former pilots etc.). The club owns a Cessna C172 that is used for between 75 and 150 hours of flying per year. The aircraft is rented to members for $125 per hour wet. There is no flying training done by the club.

There are 10 aircraft based at the airport: 4 are parked outside and 6 are in hangars (this includes the Club’s aircraft). There are a variety of single engine aircraft including Cessna, Pipers, Bonanzas and a couple of home built aircraft. Airport officials were unable to confirm the number of local flight movements by general aviation aircraft. However, the Trail Flying Club supplied the following data in the table below to the consulting team members. The data indicates that from 2006 through 2011 the average number of aircraft movements by the Flying Club was 92. However, there was considerable variation in the amount of general aviation activity generated by the local aircraft population.

Figure 4-5 Trail Flying Club Aircraft Movements Year Take-offs Landings 2006 36 36 2007 112 112 2008 135 135 2009 160 160 2010 28 28 2011 79 79

In terms of itinerant traffic there is some single engine Instrument Flight Rules (IFR) traffic but not much. Single engine IFR in the mountains is a challenge and most people fly Visual Flight Rules (VFR). Global Positioning System (GPS) technology has been very helpful.

The Trail Flying Club purchases 15,000 to 17,000 litres of fuel per year. A B train truck delivers fuel once a year, usually in the spring. Fuel is purchased from a wholesaler in Cranbrook. Fuel is available for sale to itinerant pilots but the club is not equipped to handle credit card transactions so payment is made either by cash, or cheque. The Club sells approximately 100 to 150 litres of fuel per year to itinerant pilots.

The model plane operators operate from a small paved strip at the North end of the airport. They use a radio when flying and shut down operations if aircraft are approaching or operating at the airport. There have been no conflicts with airport traffic. They usually operate Sunday and Wednesday mornings. There are no Notices to Airmen (NOTAMS) issued for this activity.

Selkirk College Aviation Program & Air Cadet Program Selkirk College makes use of the airport for training purposes. The College has 36 students in their program and the students use 7 aircraft (5 single engine and 2 multi- engine aircraft) for training purposes. The College purchases approximately 100,000 liters per year of aviation fuel from Brilliant Aviation in Castlegar and do not require fuel to be purchased in Trail.

51 Selkirk Colleges owns and operates their own aircraft maintenance shop. The College’s aviation program has 8 full time employees, a single contract aircraft maintenance and engineering support person, and 6 full time instructors.

Selkirk College does use the Trail Regional Airport. The South Training area is just north of the TECK plant and they will use Trail for touch and goes, for forced approaches and mountain arrivals and departures. These activities account for between three and four hundred aircraft movements per year. However, in their training exercises the Selkirk College aircraft do not normally stop at Trail Regional Airport.

Direct stakeholder consultations with the Selkirk College Aviation program indicated that there would be some impact on their operations if Trail Regional Airport were not available to them. The Chief Flight Instructor advised that “It would certainly reduce our students' exposure to another mountain airport and its unique operational requirements. We would also miss the emergency/diversion capability. With Castlegar being a 1runway airport, any sort of aircraft disabled on the runway or abnormal weather can shut the airport down. Having nearby airports such as Trail, Nelson and Grand Forks available to divert to is important to us.”23

Direct stakeholder interviews indicated that the 531 Trail Air Cadets squadron uses the Trail Regional Airport to carry out their Glider Flying Program. This is carried out twice a year, in the fall (usually September and in the spring (May). The Gliding Program is an essential part of the Air Cadet Program and is one activity within the overall program that helps to generate an interest in aviation which could lead to cadets receiving there Glider and Power Pilots License.

Without the airport runway, they would not be able to operate locally and would have to travel to Oliver, or some other airport to carry out this training. Having to transport cadets to and from another airport, could, in some cases, be difficult to handle for parents, and would be more costly than conducting training in the immediate area. Training outside of the Greater Trail area could create a situation where some cadets would miss out on the training because of the additional costs and or time.

Officers with the Trail Air Cadets from time to time are required to take flights out of the Trail Airport to other training locations to carry out specialized instruction geared to working with youth. They require a reliable air service to get them out and back again in a timely manner so not to impede the cadet-training schedule. Having the Trail Airport accessible to travellers that require air transportation alleviates any unnecessary travel tome associated with taking personal vehicles, or travelling to other airports.

23 Personal communication with consulting team member on July 19, 2012.

52 4.3.4 Air Ambulance Service The BC Ambulance Service (BCAS) Air Ambulance program provides critical transportation linkages between hospitals and referral centres across the province for patients requiring a higher level of care. All requests for Air Ambulance, neonatal, maternal and paediatric services are processed through the Provincial Air Ambulance Coordination Center (PAACC) located in Victoria, British Columbia.24

Operating from 3 flight centers located in Vancouver, Kelowna and Prince George, the Air Ambulance Program employs dedicated aircraft and uses commercial and charter aircraft when required. Aircraft includes: 6 fixed wing planes (2 turboprops and 1 jet based in Vancouver, 2 turboprops based in Kelowna and 1 turboprop based in Prince George), and 3 helicopters (2 based in Vancouver and 1 based in Prince Rupert). BCAS also employs approximately 40 charter carriers throughout British Columbia. The fleet also includes four helicopters (two based in Vancouver, one in Prince Rupert and one in Kamloops).25

The 2010 annual figures for the entire Air Ambulance Program describe the split in use between rotary and fixed wing aircraft26: o Rotary (Helicopter) Hours Flown: 2,339 o Fixed Wing (Plane) Miles Flown: 2,515,649

In 2010/11 BCAS provided air evacuation services to over 7,700 patients across the province.

Information provided by the BC Ambulance Service reveals the following West Kootenay specific traffic levels during their fiscal year 2011/2012. Trail Regional Airport records indicate that for the period January 1 to July 12, 2012 there have been 41 medivac flights requiring the use of the airport so far this year.

Figure 4-6 West Kootenay Air Ambulance Traffic British Columbia Ambulance Service Air Transports From or To Specific West Kootenay Locations (Fiscal Year 2011/2012) Location From To Total Trail Airport 105 31 136 Trail Hospital Helipad 7 6 13 Castlegar Airport 50 19 69

Direct discussions with Northern Thunderbird Air indicate that they use the Trail airport for medivacs approximately 12 times per year. Aircraft types used for this service include Beech 1900 and King Air 350.

24 http://www.bcas.ca/EN/main/services/air-ambulance.html 25 http://www.bcas.ca/EN/main/services/air-ambulance.html 26 (Note: the BCAS is try to get some data relevant for the RDKB study)

53 If it is dark then other arrangements have to be made such as using another airport. The only service used at the Trail airport is occasional fuel purchases.

4.3.5 Wildfire Protection & Emergency Management Wildfire Protection The Wildfire Management Branch of the Ministry of Forest, Lands and Natural Resource Operations is responsible for forest firefighting in British Columbia. In terms of organization the province is divided into six Fire Centres: Coastal, Northwest, Prince George, Southeast, Kamloops, and Cariboo that are each responsible for wildfire management within their area of responsibility. Fire Centres provide administrative, wildfire suppression and aviation services to all staff within their area of operation. Fire Centres are staffed by forest officers, dispatchers, fire fighters and support staff that coordinate wildfire prevention, detection and suppression activities. Each Fire Centre is divided into Zones and within each zone there are one or more firebases. Fire fighters are dispatched from the bases which are strategically located so as to provide even coverage throughout the province.

The Southeast Fire Centre is one of six regional wildland fire centres operated by the B.C. Forest Service's Wildfire Management Branch. The main office for the Southeast Fire Centre is located at the Castlegar municipal airport. The main office is responsible for regional administration and also oversees all operations and dispatch.

The Southeast Fire Centre encompasses the area extending from the US Border to Mica Dam and from the Okanagan Highlands/west side of the Monashee Mountains to the B.C./Alberta Border. The Southeast Fire Centre is made up of six zones. The North Columbia zone office is in Revelstoke with a secondary base in Golden. Invermere zone office is located in Invermere. Kootenay Lake zone office is located in Nelson. The Arrow zone office is located in Castlegar and there is a secondary base in Nakusp. Cranbrook zone office is in Cranbrook and Boundary zone office is in Grand Forks with a secondary base in Rock Creek.27

Direct stakeholder correspondence with the Senior Protection Officer - Aviation for the ministry revealed the following information:

o Historically, the West Kootenay area of the Southeast Fire Centre (formerly the Nelson Forest Region) has utilized the Castlegar airport as the primary strategic location for aviation support.

27 http://bcwildfire.ca/aboutus/organization/southeast/

o Critical operational support has included a fixed wing air tanker base since the early 1970’s. Today, Castlegar is one of 18 tanker bases managed centrally through the Provincial Air Tanker Centre in Kamloops. (PATC) Through PATC, air tanker groups are moved seamlessly throughout the province, based on resource need. In 2010, significant improvement investments were completed at the Castlegar tanker base.

o In addition to airport apron upgrades, the retardant loading pits were re- configured to accommodate simultaneous loading of two heavy air tankers, greatly improving capacity and fire response from this location.

o There are two (2) helicopter companies working from the Castlegar airport. The Fire Centre accommodates additional “as and when” rotary wing aircraft for deployment to fires as the activity dictates. A small fixed wing operator provides important aerial fire detection and reconnaissance from the Castlegar location.

o The infrastructure and building at the Castlegar air tanker base were upgraded in 1996, and 2001 to accommodate the administrative and operations centre established as the Southeast Fire Centre. The Southeast fire Centre houses nineteen (19) permanent staff, and thirty-eight (38) staff through the fire season. This number may expand to as much as double this number in active seasons where additional staff resources are called upon to fill administrative and operational functions.

o Nelson airport is a local base which houses two(2) to three(3) rotary wing operators utilized by the SEFC for fire work as fire load dictates. Traditionally, Nelson has served as support centre for ongoing fires, aircraft staging, and positioning for initial attack response. Nelson has both jet and aviation fuel, and local operators have generously accommodated visiting aircraft with hangar access for servicing needs. Nelson has had a number of small fixed wing operators in past years. There are currently no such operators at the Nelson location. Limitations on this site include aircraft parking space, and airspace congestion concerns. Proximity to the city, and the nature of the tight valley make noise complaints an issue for extended operational durations.

o The Trail Airport has been utilized little to support our operations in past years. The exception was 2007, when rotary wing aircraft utilized the airport as a staging area to support the large wildfire in the Pend D’Oreille area. This location worked very well for the duration required. There are no rotary wing or small fixed wing companies operating from Trail, and this location offers no significant benefit from an aviation response perspective. While not a strategic location for fire preparedness support, this airport would be best considered as a support centre for ongoing fires in the immediate vicinity.

Emergency Management Direct stakeholder contact indicated that the Kootenay Boundary Regional Fire Rescue has considered and will be approaching airport administration officials regarding the use the Trail Airport for the following purposes:

1. Staging area for fire department apparatus and personnel during any type of emergency event in the Industrial Park or the Pend D’Oreille water system. 2. Landing base for support helicopters and or fixed wing aircraft for any type of wild land fire, or emergency event in RDKB jurisdictional response area.

4.3.6 Aircraft Maintenance & Engineering At Trail Regional Airport there is one firm providing aircraft maintenance and engineering services (AME) on a part-time basis up to three days a week. The company does up to two-dozen annual checks per year plus other odd jobs like rebuilds and some overhauls. Most of the work is for local people and for others from Nelson, Creston and the general area. At various time customers have come from the Vernon and Kelowna areas and a customer comes from out of province. Based on stakeholder discussions AME business activity could generate between $40,000 to $50,000 in annual revenue for the business.

During a direct stakeholder interview with study team members it was confirmed that General aviation activity is limited and is dependent on disposable income. The AME segment of the aviation business in Trail is fairly consistent although there can be downturns due to local and national economic conditions. In terms of other AME work in the general area the Selkirk College aviation program generally performs AME work using College staff. The College may also use an individual in Castlegar who is an AMO but who does maintenance work for other people.

56 5 ECONOMIC IMPACT ANALYSIS 5.1 Methodology There are three principal methods for estimating the economic impact of an airport: 28

1. The principal method of determining the economic impact of an airport is the Input-Output method. This method typically measures three separate effects – direct, indirect, and induced effects. Direct effects include employment and output generated directly by the airport. For example, the direct impacts results from spending in the local area by visitors who arrive by air, as well as spending in the local-area for goods and services by airport tenants. Indirect effects represent employment and output generated by firms primarily off-airport, but whose activities are attributable to the airport; for example, the estimated flow of dollars generated from the supply of materials, goods and services attributable to the airport and its tenants. Induced effects are the multiplier effects caused by successive rounds of spending through the economy as a result of an airport’s direct and indirect effects. For example, employees use their salaries and wages to purchase goods and services from other businesses. Businesses make their own purchases and hire employees who in turn make their own purchases. In the input-output method, an airport’s total economic impact is the sum of the direct, indirect and induced effects.

2. Collection of benefits method: Quantitative or qualitative measures of benefits and costs brought about by an airport, including time saved; costs avoided by using air transportation; capacity improvements from reliever airports; and stimulation of business, recreation, commercial activities, and community benefits.

3. Catalytic method: Measurement of spillover impacts or how the airport benefits performance in the supply-side of the economy including impacts on investment, trade, and overall productivity of the economy. Unlike the collection of benefits methods, catalytic impacts are usually quantified in monetary terms.

To the extent possible the project team has endeavoured to measure the economic impact of both Scheduled Air Service and General Aviation activity at Trail Regional Airport using the Input-Output and Collection of Benefits methods described above. This includes a review of potential for growth across the various industries, (aeronautical and non-aeronautical) related to potential demand that would support airport infrastructure development.

Analysis of the economic impact of the Trail airport must also take into account the distinctive situation of the availability of two airports with scheduled service – Trail and Castlegar - in close proximity in a relatively sparsely populated area.

28 ACRP SYNTHESIS 7 (2008) Airport Economic Impact Methods and Models, Transportation Research Board, Washington, D.C. www.TRB.org

57 During the study process the project team gathered information through direct stakeholder interviews, reviews on airline web sites for pricing data, the results of the confidential on-line surveys and material provided by the RDKB. 5.2 Input- Output Direct Economic Impacts This section attempts to estimate the air services and airport’s annual economic impact from the use of Trail Regional Airport in terms of three outputs:

o Trail Regional Airport employment (number of jobs measured as full time equivalents – FTE), o Trail Regional Airport employment income (wages and salaries in $ per year), o Trail Regional Airport estimated value of volunteer labour at the airport.

Pacific Coastal Service to Trail – Revenue, Fees & Taxes The Pacific Coastal Airlines service has a significant impact on the provincial economy. Estimates of total revenue attributable to the Pacific Coastal service to Trail are shown below: Figure 5-1 Pacific Coastal Service to Trail – Revenue, Fees & Taxes Pacific&Coastal&Revenue,&Fees&and&Taxes Trail&Passenger&Annual&Traffic& Trail&to&YVR 20495 Ticket&Price Revenue Estimated&Passenger&Revenue &&&Bravo&fare&(15%&of&tickets) $139 $427,321 &&&Classic&fare&(65%&of&Tickets $166 $2,211,411 &&&Encore&fare&(20%&of&tickets) $229 $938,671 Blended&Fare $175 $3,577,402 Aviation&Surcharges Fee &&Carbon&Surcharge $3 $69,683 &&Fuel&Surcharge $5 $102,475 &&Security&Surcharge $7 $145,924 Total&Blended&Fare&Plus&Fees $190 $3,895,485 Total&+&HST& $213 $4,362,943

Direct Greater Trail Area Economic Impacts The economic impact analysis in this section of the study focuses on the Greater Trail area impacts attributable to airport operations and aviation activities occurring at the airport. To estimate these impacts consideration is given to analyzing the direct, indirect and induced impacts.

Direct impacts attributable to the airport include all on-airport activities including staff for scheduled passenger service, airport operations and on-site businesses, fuel sales, hangar leases, plane rentals and charters, and other similar activities. It includes for example all the airport businesses’ purchases in town on supplies, fuel, parts, and services. It also, significantly, includes spending by itinerant airport users, such as visiting pilots, their passengers, tourists, temporary stationed forest fire fighting or search and rescue crews on accommodations, gifts, food, entertainment and local transportation (car rentals, taxi, etc).

Figure 5-2 Direct Employment - Full Time Equivalents Direct Effects (FTE) 2012

Paid (RDKB, PCA, AME) 3.85

Volunteers 3.2

Total Direct FTE Jobs 7.05

Paid (RDKB, PCA, AME) 55%

Volunteer 45%

Total FTE Jobs 100%

Figure 5-3 Direct Wages and Salaries

Direct Effects $ 2012 Paid (RDKB, PCA, AME) $228,428 Volunteers $180,825 Total Employment Income $409,253 Paid 56% Volunteer 44% Total Employment Income 100%

Direct economic impacts generated by airport operations are provided in the table below. The table below shows the income from airport operations that is earned by the Regional District of Kootenay Boundary from non-taxation sources, either directly from the local property tax base, or through transfers from other levels of government such as the federal Airport Capital Assistance Program.

Figure 5-4 Airport Generated Income to RDKB 2011 Direct Aviation $0 Passenger Fees $127,380 Concession Fees $47,437 Property & Non-aviation $4,214 Total $179,031

Indirect & Induced Greater Trail Area Economic Impacts Indirect effects represent employment and output generated by firms primarily off- airport. Induced effects are the multiplier effects caused by successive rounds of spending through the economy as a result of an airport’s direct and indirect effects. Indirect and induced effects are difficult to measure directly. For this reason, a multiplier is commonly applied to the measured direct effect to arrive at the total impact.

60 Estimating a multiplier involves consideration of the size and level of diversification of the local economy, the range of goods and services produced locally as opposed to those that are imported and thus create “leakage” – local dollars leaving town. Indirect and induced impacts are also industry-specific. For example, other studies of community airports in small rural and economies (such as a project prepared for Nelson) have used a multiplier of 2.2. The project team carefully considered the issues related to accurately assessing the indirect and induced impacts and opted not to prepare an estimate for this project. A primary consideration was the very low level of activity at the airport. For example, the aircraft maintenance and engineering firm indicted that in direct discussion with the study teams members that only thing the firm purchases locally is oil and grease from the local Shell distributor lubricants and other shop supplies from a local auto parts store. The total value of these purchases was less than $1,000 annually. In contrast $15,000 per year in parts were purchased but the specialized nature of aviation parts required that they be purchased in the Spokane area.

Another reason for not attributing indirect and induced impacts of the Trail Airport has to do with the unique nature of the operations of Trail Regional Airport. Mr. Spencer Smith, Vice President of Pacific Coastal Airlines was quoted in a July 16, 2012 Vancouver Sun article as stating “I’ve never seen a group of volunteers take this much interest and do such an amazing job of taking care of the facility simply out of the spirit of encouraging the region to have good service”. While the level of volunteer effort is indeed commendable for the purposes of an economic impact study there are no indirect or induced wage impacts because no direct wages are paid to the volunteers. The estimate provided in the previous section is there for illustrative purposes only. The only indirect economic impacts that may occur would be attributable any travel stipend or honorarium that they may receive.

In regards to indirect and inducted impacts it is not possible to accurately estimate the impacts associated with tourism. However, the User Surveys contained in the Appendices do provide some indication of the level of spending by over 200 survey respondents.

5.3 Collection of Beneﬁts Economic Impacts For purposes of this study, the collection of benefits method for evaluating the economic impact of the Trail airport includes consideration of air service impacts and traveller cost and time savings.

5.3.1 Air Service & Fares Under current conditions the Pacific Coastal service from the Trail Regional Airport augments regional air service provided by the availability of Air Canada Express service from Castlegar. As a means of assessing the current level of service and costs relative to similar airports in the Southern Interior, analysis of fares and capacity for Cranbrook, Kamloops, and Kelowna relative to Trail/Castlegar has been conducted.

A summary of current service at each airport is shown below, based on current (mid- August 2012) weekday flight schedules.

Figure 5-5 Air Service Summary – Southern Interior Airports Air Service Summary - Southern Interior Airports Carriers Daily Flights to YVR Other Routes Catchment Area Trail/Castlegar Air Canada Express 6 Air Canada Express Central Kootenay (3), Pacific Coastal - Calgary (1) RD, Kootenay (3) Boundary RD Cranbrook Air Canada Express 5 Air Canada Express East Kootenay RD (2), Pacific Coastal - Calgary (3) (3) Kamloops Air Canada Express 5 Westjet - Calgary Thompson-Nicola (5) (2) Kelowna Air Canada Express 11 Multiple Central Okanagan, (8), Westjet (3) South Okanagan

A comparison of levels of service to YVR adjusted for population of the catchment area for each airport is shown below. The analysis excludes flights to other destinations.

Figure 5-6 Southern Interior Airports Weekday Airline Capacity – Flights to YVR

Airline Capacity - Southern Interior Communities 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Weekday Seats Per 1000 Population Trail-Castlegar Cranbrook Kamloops Kelowna

Based on this comparison, the level of service for the Central Kootenay and Kootenay Boundary Regional Districts is similar to other Southern Interior airports. Kamloops is the only airport with service from a single carrier on the route to YVR, and has the lowest level of service.

A comparison of published airfares for each airport on flights to YVR is shown below. The lowest fare is the Seat Sale fares for Air Canada Express and Westjet service from Kelowna to YVR.

Figure 5-7 Air Fare Comparisons – Southern Interior Airports to YVR

Air Fare Comparisons Southern Interior Airports $300 $250 $200

$150 Lowest $100 Tango Plus $50 $0 Castlegar - Cranbrook - Kamloops - Kelowna -

One Way Fare incl. Fees and Taxes YVR YVR YVR YVR

63 Air fares adjusted for flight distances are shown below. Flight distances and fares for Castlegar and Trail are essentially identical.

Figure 5-8 Southern Interior Air Fares per Kilometre

Southern Interior Air Fares per Km $1.20 $1.00 $0.80

$0.60 Lowest $0.40 Tango Plus $0.20 $0.00 Castlegar - Cranbrook - Kamloops - Kelowna - YVR YVR YVR YVR

Cranbrook has the lowest fare per kilometre, followed by Castlegar. This may be due in part to the airlines’ cost structure, where costs per kilometre typically fall for longer stage lengths (i.e. fixed costs such as airport landing and passenger fees are spread over a greater number of kilometres). Flight distances are 532 km and 395 km for Cranbrook and Castlegar respectively. The wide gap between Kamloops and Kelowna fares, which have similar flight distances, suggests that the lack of direct competition on the Kamloops-YVR route increases fare levels. Regular Tango Plus fares per kilometer are 25% higher than for Kelowna. However, as stated previously the actual fares paid by travellers depend on the proportion of fares offered in each fare category, so direct comparisons of published fares may not accurately reflect actual costs.

5.3.2 Airline Costs This section analyzes costs incurred by the airlines in serving the Trail and Castlegar airports. Note that these costs are already reflected in airfares, fees and surcharges of the airlines and so any benefits or costs cannot be considered in addition to any benefits reflected in lower fares.

Under the current agreement with RDKB Pacific Coastal pays a charge of $7.00 per passenger for use of the Trail airport. Castlegar imposes landing fees and general terminal charges based on aircraft characteristics. A comparison is shown below.

Figure 5-9 Castlegar and Trail Airport Fees Comparative Airport Fees Castlegar and Trail Airport Carrier Aircraft Landing Terminal Total Passenger Passenger Total Per Total per Fee Fee Fee Capacity Pax Pax (70% LF) Castlegar AC Express Dash 8-300 $27.05 $120.67 $147.72 $7.00 50 $9.95 $14.22 Castlegar Pacific Coastal Saab 340 $27.05 $84.49 $111.54 $7.00 30 $10.72 $15.31 Castlegar Pacific Coastal Beech 1900 $27.05 $48.20 $75.25 $7.00 19 $10.96 $15.66 Trail Pacific Coastal Saab 340 $7.00 30 $7.00 $7.00 Trail Pacific Coastal Beech 1900 $7.00 19 $7.00 $7.00

Because the Castlegar landing and terminal fees are based on aircraft characteristics rather than the number of passengers, the cost per passenger varies with the aircraft load factor (i.e. the number of passengers on the flight compared to aircraft seating capacity). At a 70% load factor, the cost per passenger at Castlegar is $8.66 per passenger higher for Beech 1900 flights, and $8.31 higher for Saab 340 flights.

Comparative air navigation fees for Castlegar and Trail flights are shown below. The data indicate a significant cost advantage for flights to Trail Regional Airport. 29

Figure 5-10 Nav Canada Fees Castlegar and Trail Nav Canada Fees Trail vs Castlegar Aircraft Aircraft MTOW Origin Destination Passengers Fee Fee per Fee per Code (tonnes) Passenger Passenger 70% LF Dash 8-300 DH8C 19 Castlegar YVR 50 $297.50 $5.95 $8.50 Dash 8-100 DH8A 16 Castlegar YVR 37 $261.38 $7.06 $10.09 Beech 1900 B190 8 Castlegar YVR 18 $155.56 $8.64 $12.35 Saab 340 SF34 13 Castlegar YVR 30 $223.66 $7.46 $10.65 Beech 1900 B190 8 Trail YVR 18 $33.23 $1.85 $2.64 Saab 340 SF34 13 Trail YVR 30 $42.36 $1.41 $2.02

Overall cost differentials attributable to airport and Nav Can fees are summarized below.

29 Source: Nav Canada Fee calculator http://www.navcanada.ca/NavCanada.asp?Language=en&Content=ContentDefinitionFiles\Services\Charg esAndAdmin\Calculator\default.xml

Figure 5-11 Total Fees Trail and Castlegar Total Fees Trail and Castlegar (70% Load Factor) Airport Carrier Aircraft Airport fees per Nav Can Fees per Total Passenger Passenger Castlegar AC Express Dash 8-300 $14.22 $8.50 $22.72 Castlegar Pacific Coastal Saab 340 $15.31 $12.35 $27.66 Castlegar Pacific Coastal Beech 1900 $15.66 $10.65 $26.31 Trail Pacific Coastal Saab 340 $7.00 $2.64 $9.64 Trail Pacific Coastal Beech 1900 $7.00 $2.02 $9.02

5.3.3 Air Fares and Travel Costs Published airfares for Pacific Coastal service from Trail to Vancouver and Air Canada Express from Castlegar to Vancouver are shown below.

Figure 5-12 Trail & Castlegar Airfares Trail and Castlegar Air Fares Pacific Coastal Trail - YVR Base Fare Taxes and Fees Total Bravo $139.00 $52.63 $191.63 Classic $166.00 $50.27 $216.27 Encore $229.00 $55.87 $284.87

Air Canada Jazz Castlegar - YVR Base Fare Taxes and Fees Total Tango (1) $145.00 $44.00 $189.00 Tango (2) $165.00 $47.00 $212.00 Tango Plus $210.00 $52.00 $262.00 Latitude $461.00 $82.00 $543.00

Both carriers offer similar base fares, as is typical for competing air services at a single location. However, the average fares paid by travellers may vary significantly due to differences in the proportion of travellers travelling within each fare category. Pacific Coastal offers additional fare discounts of at least 20% through their QuikPass program for frequent travellers, which requires an initial deposit and imposes some restrictions on seat availability and other conditions.

Estimates of the costs of air travel through Trail and Castlegar relative to travel by private vehicle are shown below. The analysis is based on the following assumptions:

66 o Air travel costs are based on the blended fare, fees and taxes estimated in section 5.2. o Private vehicle operating costs are estimated at $.20 per kilometre based on Canadian Automobile Association operating cost estimates for 2011. o The value of time is assumed to be $12.17 per hour. This is consistent with the value used by BC Ministry of Transportation and Infrastructures in their highway cost-benefit analyses (the MicroBenCost model). o Travel time from Trail to Vancouver is estimated at 6.85 hours, based on Google Maps estimate.

Stakeholder consultations suggest that travellers find the Pacific Coastal service more convenient because the lack of the requirement for security screening at the Trail airport and greater flexibility of Pacific Coastal services save time. This has been reflected in a reduction in overall travel time of 15 minutes in the calculations.

Figure 5-13 Trail and Castlegar Air and Private Vehicle Travel Costs Estimated Travel Costs - Private Vehicle vs Air Travel Private Vehicle Costs $/km1 One Way Trip km Total Operating cost $0.20 830 $163.10 Value of time Travel time ($/hr) 2 (hours) 3 Total Value of Time $12.17 6.85 $83.36 Total $246.46 1 Source: Average Operating Costs 2011 Canadian Automobile Association 2 BC MOTI MicroBen Cost 3 Source: Google Maps Air Travel Value of time Travel time Value of Time ($/hr) 1 (hours) 2 Total Pacific Coastal Airlines $12.17 1.3 $15.82 Air Canada Jazz 12.17 1.55 $18.86 1 BC MOTI MicroBenCost 2 Air Canada Minimum check in time of 30 min; PCA assumed 15 minutes One Way Cost Comparison Trail - Vancouver Travel Costs Time Costs Total Private Vehicle $163.10 $83.36 $246.46 PCA $212.88 $15.82 $228.70 Air Canada Jazz $212.88 $18.86 $231.74 Note: For Round Trip travel accommodation costs may also be incurred.

67 Additional travel costs to the airport will depend on the traveller’s point of origin. Travellers using Castlegar may incur additional charges for parking, and for round trip travel additional costs for accommodation are likely to be incurred.

5.3.4 Assessment of Benefits The comparative analysis in the previous sections suggests that following benefits to the region under current conditions.

o The level of service provided to travellers in the Central Kootenay and Kootenay Boundary Regional Districts in terms of seat capacity per capita for flights to Vancouver is comparable to that at similar airports in the region. Per capita capacity at Kamloops, the only regional airport with a single carrier providing service on this route, is 20% lower.

o Distance-adjusted published airfares suggest that fares between Trail/Castlegar and YVR are slightly higher than Cranbrook and Kelowna, but lower than Kamloops. The differences may be due in part to the airlines’ cost structure, where costs per kilometre typically fall for longer stage lengths. The wide gap between Kamloops and Kelowna, which have similar flight distances, suggests that the lack of direct competition on this route increases fare levels. Benchmark Air Canada Tango Plus fares per kilometre between Kamloops and Kelowna are 25% higher than comparable fares for Kelowna.

Extrapolating from these results, the availability of competitive air service for Trail and Castlegar may result in an increase of up to 20% in airline capacity and a reduction of up to 25% in fares. However, the assessment of the benefits of continuing scheduled service at the Trail Regional Airport depends on the assessment of the most likely scenario for air service should it close. Two possible outcomes are discussed below.

1. Pacific Coastal relocates their service to Castlegar airport. The most probable outcome should the Trail airport become unavailable for use for scheduled service is the relocation of existing Pacific Coastal services to Castlegar.30 Based on the analysis in section 5.3.2, this is estimated to add approximately $18.00 to the airline’s cost per passenger due to higher airport and Nav Canada fees. The relocation may weaken Pacific Coastal’s competitive position relative to Air Canada due to the loss of the unique advantages cited by survey respondents in terms of convenience and flexibility of current services at Trail. However it is worth noting that Pacific Coastal competes against Air Canada Express successfully at Cranbrook without the need for a separate airport.

30 Note: this is a hypothetical example only and is included in this report to more fully explore the potential economic impact in the change of location of air service since a carrier is not entirely dependent upon Trail Regional Airport to provide service to it’s customers.

68 For purposes of estimating the impact on travellers’ costs we have assumed that Pacific Coastal would increase their fares by the same amount as the increase in fees following the move to Castlegar. Based on the survey responses, in the event scheduled service was unavailable at Trail 49% of Trail passengers would use another airport, and 38% would shift to another mode (private vehicle or bus).

We have further assumed that Pacific Coastal is the price leader in this market, so Air Canada Express would follow their lead in raising fares in spite of the fact that their costs would not increase.

Under these assumptions, we estimate that costs for existing Trail and Castlegar passengers would increase by about $1.9 million, based on the current level of traffic at Trail and the assumption that 70,000 of the approximately 75,000 passengers at Castlegar are travelling between Castlegar and YVR (with the remainder travelling between Castlegar and Calgary).

Current Trail passengers would also incur additional surface transportation costs related to travelling to West Kootenay Regional Airport in Castlegar. Based on an average additional one way trip length of 26 km, and additional expense of $5 per (round) trip for airport parking, estimated incremental surface costs would average $13.69 per one way trip.

Estimated Incremental Surface Travel Costs - Trail Passengers Diverted to Castlegar Private Vehicle Costs $/km1 Two Way Trip km Total Operating cost $0.20 26 $5.11

Value of time Travel time ($/hr) 2 (hours) 3 Total Value of Time $12.17 0.5 $6.09 Parking $2.50 Total $13.69 1 Source: Average Operating Costs 2011 Canadian Automobile Association 2 BC MOTI MicroBen Cost 3 Source: Google Maps

The overall estimated impact on traveller costs is shown below.

Figure 5-14 Increase in Travel Costs – Relocation of Pacific Coastal to Castlegar Increase in Travel Costs - Relocation of Pacific Coastal to Castlegar Traffic Segment Annual Current Blended New Blended Cost Increase Cost Increase Passengers Fare Fare Including HST Existing Trail Passengers - Air Fare 10250 $174.55 $192.55 $184,500 $206,640 Existing Trail Passengers - Surface Transportation to Castlegar 20495 $0.00 $13.69 $280,577 $280,577 Castlegar Passengers 70000 $174.55 $192.55 $1,260,000 $1,411,200 Total 100745 $174.55 $192.55 $1,725,077 $1,932,086 Current Total Annual Total Costs Cost Increase Costs Air Travel Cost Increase Passengers Private Vehicle Including HST (incl HST) Trail Passengers Shift to Private Vehicle 7175 $212.50 $246.46 $243,659 $243,659 Grand Total $1,968,736 $2,204,984

The relocation of Pacific Coastal service to Castlegar would increase the revenue available to the West Kootenay Regional Airport by approximately $220,000 due to the increase in aircraft traffic and passenger fees. As costs would be unlikely to rise in proportion to the traffic, this might enable the airport to reduce its fee levels, which could mitigate the impact on traveler costs. If the West Kootenay Regional Airport did not reduce their aircraft and passenger fees than the former passengers and airlines that utilized Trail Regional Airport would experience an increase in costs compared to using Trail Airport.

2. Pacific Coast Airlines ceases service and Air Canada Express becomes the sole airline providing service to the Central Kootenay and Kootenay Boundary region. Elimination of the Pacific Coastal service31 would reduce capacity in the region by approximately 31%. However, should this happen Air Canada Express might increase capacity at Castlegar. To assess the potential impact on capacity, three scenarios are shown below, compared to current service levels. The scenarios include:

o Scenario 1: No additional service by Air Canada Express. o Scenario 2: One additional Air Canada Express flight per day using a Dash 8 100 aircraft. o Scenario 3: One additional flight per day using a Dash 8 300 aircraft.

31 Note: this is a hypothetical example only and is included in this report to more fully explore the potential economic impact in the change in air service.

70 Figure 5-15 Pacific Coast Airlines Withdrawal: Airline Capacity Scenarios

Air Service Scenarios Pacific Coastal Withdrawal 14.0 12.0 10.0 8.0 6.0 4.0 2.0

Weekday Seats Per 1000 Populaiton 0.0 Current Scenario 1 Scenario 2 Scenario 3

Extrapolating from the differential in fares per kilometre between Kamloops and Kelowna, the lack of competition should Pacific Coastal withdraw from the region air fares could increase as much as 25%. Under the assumption that the “alternative mode” was private vehicle, additional costs are estimated under the following assumptions: o Annual passenger volume of 20,000 passengers. o Based on responses from the employer and traveller surveys, we have assumed that in the event service was unavailable at Trail airport, 50% would have used Castlegar airport, and 35% would have travelled by private vehicle. Additional costs for the first two categories are estimated below. o Trip costs by air are based on the assumption of an average increase in airfares of 25% due to reduced competition.

Trip costs by private vehicle are based on the analysis in previous sections of this report.

Figure 5-16 Estimated Travel Cost Impact Pacific Coast Withdrawal

Increase in Travel Costs - Withdrawal of Pacific Coastal Traffic Segment Annual Current Blended New Blended Cost Increase Cost Increase Passengers Fare Fare Including HST Trail Passengers Diverted to Castlegar 10250 $174.55 $218.19 $447,284 $500,959 Castlegar Passengers 70000 $174.55 $218.19 $3,054,625 $3,421,180 Total Air Travellers 80250 $3,501,909 $3,922,139 Current Total Annual Total Costs Cost Increase Costs Air Travel Cost Increase Passengers Private Vehicle Including HST (incl HST) Trail Passengers Shift to Private Vehicle 7175 $212.50 $246.46 $243,659 $243,659 Grand Total $3,745,569 $4,195,037

Approximately 10% of survey respondents indicated that in the absence of service at Trail, they would not have travelled, and 5% would have visited another destination within the region. Potential impacts relating to these categories of travelers have not been estimated.

5.4 Social Values - Non-Monetary Impacts In addition to the economic benefits described in this report, the Trail Regional Airport provides access and some limited general aviation services that enhance the well-being of the Greater Trial area. Aviation activities that take place on a periodic basis in addition to scheduled commercial passenger service include air traffic from local and itinerant planes by individuals with a personal pilot's license involved in recreational flying, flight training, air ambulance and wildfire protection and emergency management. On occasion the airport serves corporate owned or chartered aircraft.

6 TRAIL REGIONAL AIRPORT: FUTURE AIR TRAFFIC ANALYSIS 6.1 Demand Scenario The Trail airport has seen rapid growth in passenger traffic starting in December 2009. The growth over this period coincided with construction activities related to the Waneta Dam Expansion that began in late 2010. Air passenger volumes in smaller communities are typically boosted temporarily by an influx of specialized labour due to local shortages of technical and management skills.

72 In the case of the Waneta dam expansion, the impact on air passenger volumes has probably been tempered by the local hiring preference provisions negotiated in the agreement for construction. Hiring of tradespeople for the Waneta Expansion Project is done through Columbia Hydro Constructors Ltd (CHC). Under the terms and conditions of the Collective Agreement between CHC and the Allied Hydro Council of BC, hiring preference is given to local residents. For calendar year 2011, CHC employment is estimated at 157 Person years, of which 82% were classified as local, compared to the target rate of 75%. Local management and engineering employment was estimated at 54 person years; data on the local hire rate is unavailable but the original project agreement called for 50% local hiring.

The local portion of trades employment is expected to vary with different stages of construction. As the need for electricians and pipefitters arises the size of the work crews that may need to travel into the area from further afield increases because the local supply of labour is insufficient to meet the demand for labour. Direct stakeholder discussion with officials involved in the Waneta Dam project revealed that the management and professional staff working on the project generate a more consistent short-term demand for air service. These individuals travel to weekly and/or monthly project management meetings, ad-hoc travel to perform on-site professional services such as geo-technical engineering and other activities. For some of the major contractors involved in the project and owners may have up to six or seven persons who would frequently use the air service provided at Trail Regional Airport.

This project-related travel demand appears to be the one of the most likely explanations for increased passenger traffic at the Trail airport. Tourism travel appears to have declined in the Greater Trail Area in 2011, based on local motel and hotel vacancy rates.32 Mr. Mike Martini, chairman of the Lower Columbia Community Development Team Society in the July 24-30, 2012 issue of Business in Vancouver indicated that Trail Regional Airport passengers growth of 30% this year was influenced by two key infrastructure projects the Waneta Dam expansion and the upgrades to Teck Resources Ltd’s smelter in Trail. Mr. Marinti indicated in the article that he was expecting the airport’s numbers to grow further, though at a more marginal rate.

An estimate of the impact of the Waneta expansion project is shown below, based on the assumptions listed below. The project team consulted extensively with both provincial and regional union, senior company officials from SNC Lavilin and others such as Columbia Hydro Contractors in direct telephone conversations before making the following assumptions:

• External workforce numbers are based on quarterly statistics published in Columbia Power Corporation Socio-Economic Monitoring Reports.

32 First Annual Socio-Economic Monitoring Report Waneta Expansion Project Revised Version January 1 to December 31, 2011 Columbia Power Corporation P. 17.

• CHC external workforce numbers are estimated based on the percentage of the workforce from outside of the local region (the local region for this purpose includes Trail, Castlegar, Nelson, Other West Kootenay, and Other Columbia Basin), • Local management and engineering workforce numbers are based on the 50% local employment target in the construction agreement. • Each external worker is assumed to take 2 trips per week (8 per month) via the Trail airport.

Based on direct stakeholder discussions that informed the assumptions in this report, travel related to the Waneta expansion project accounts for a significant portion of the growth in passenger traffic over the last two years. Passenger statistics have been converted to 12 month moving averages to more clearly illustrate traffic trends.

Figure 6-1 Waneta Dam Expansion Impact on Air Passenger Traffic at Trail Airport

Trail Airport Monthly Passengers - Estimated Waneta Expansion Impact 2000

1500

1000 Actual 12 month ma

500 Actual Less Waneta 12 month ma 0 Jan-10 Jun-10 Oct-08 Apr-11 Sep-11 Feb-12 Dec-07 Aug-09 Nov-10 Mar-09 May-08

The relatively large estimate of the Waneta expansion project impact suggests that passenger traffic may decline following completion of construction, unless similar large capital projects in the region are undertaken. This represents a risk to future airport revenue and air service frequency.

6.2 Influence of Air Service Competition Prior to deregulation of air carrier scheduled services in 1987 it was not uncommon for smaller airports to have scheduled services. The National Transportation Act 1967 granted wide ranging powers to regulate commercial aviation to the Canadian Transport Commission, including the power to issue licences and impose conditions on successful applicants.

74 Market entry and exit was regulated under criteria of public convenience and necessity and conditions were often imposed to limit competition. Airlines’ roles were strictly defined, with transcontinental scheduled services reserved for Air Canada and CP Air. Air BC became a major regional carrier when it was formed in 1980 after the merger (by the Jim Pattison Group) of a number of west coast domestic airlines: Canadian Air Transit, Flight Operation, Gulf Air Aviation, Haida Airlines, Island Airlines, Omineca Air, Pacific Coast Air Services and West Coast Air Services.

Domestic scheduled air service was effectively deregulated with the passage of the National Transportation Act 1987. Restrictions on market entry and exit, fares, and equipment were essentially eliminated.

Operationally, the air carriers had anticipated legislative deregulation and the restructuring of the Canadian domestic airline industry began in the fall of 1983. In October 1983, Pacific Western Airlines purchased 40% of Time Air. About the same time, the Alberta government privatised Pacific Western Airlines. On November 28, 1986 Air Canada purchased 100% of Air BC. On December 2, 1986 PWA purchased CP Air. On April 26, 1987, PWA and CP Air operations were integrated under the name Canadian Airlines International. Also in 1988, the Federal Government sold off 45% of its stake in Air Canada. The remaining shares were sold in 1989.

The consolidation of regional and local airlines under Air Canada resulted in a period of intense competition extending into smaller markets through their regional affiliates. Almost all smaller carriers withdrew from scheduled services during this period due to low fares.

Intense competition between Air Canada and Canadian Airlines resulted in significant financial losses for both airlines. Air Canada officially took control of Canadian Airlines, pending government approval, on December 8th, 1999. The Federal Competition Bureau cleared the way for the takeover on December 21, 1999 and Canadian Airlines officially became a subsidiary of Air Canada on December 23, 1999. Divestiture of Canadian Regional Airlines by Air Canada was mandated by the Competition Bureau to maintain competition in regional markets. However, no purchaser could be found and Canadian Regional Airlines was integrated into Air Canada Jazz (now Air Canada Express).

WestJet commenced operations in 1996 with three Boeing 737-200 aircraft and 220 employees serving Vancouver, Kelowna, Calgary, Edmonton, and Winnipeg. At the time of its entry into Western Canada, all segments of the market were dominated by Air Canada and Canadian Airlines either directly or through they’re regional subsidiaries and independent partner airlines. WestJet expanded rapidly following the merger between Air Canada and Canadian Airlines in 2000. WestJet has maintained its focus on serving medium to large markets using variants of the Boeing 737 jet aircraft.

75 In the Southern Interior, WestJet provides service between Kelowna and Vancouver and Calgary, and between Kamloops and Calgary.

The availability of low discount fares has effectively eliminated smaller carriers from larger markets. In smaller markets such as Castlegar and Trail, passenger volumes are sufficient to support scheduled services by two carriers, but not sufficient to provide an efficient load factor for WestJet’s B737. Pacific Coastal Airlines has provided competition to Air Canada Express (Jazz) for flights from Trail to Vancouver since 2006. Small airlines find it difficult to compete against larger carriers due to the economies of scale in flying larger aircraft.

7 AIRPORT OPERATIONS & INVESTMENT RISK ASSESSMENT 7.1 Benefits of Airport Capital Investment This discussion and analysis on the benefits of airport capital investment is prepared from the perspective of the airport owner: the Regional District of Kootenay Boundary. Since the airport owner primarily derives revenue from the scheduled passenger airline that serves the community the analysis is primarily focused on the types of airlines services offered in the marketplace, and the potential likelihood of one of these airline services being enticed to conduct new or expanded operations from Trail Regional Airport. It also includes a discussion regarding the business retention of the existing type of airline service being offered at Trail and a qualitative assessment about the general nature of any additional economic impacts to the community from the provision of new airline services.

The Air Canada Express and Pacific Coastal Airlines scheduled services currently serving the Central Kootenay and Kootenay Boundary regions differ in the type of service offered.

Air Canada Express is the regional carrier linking smaller markets to Air Canada’s network, and feeding passengers to the major carrier’s interprovincial and international network. As an integral part of Air Canada’s operation, Air Canada Express offers access to Air Canada’s Frequent Flier rewards program and seamless connections to other destinations via Vancouver International Airport’s main terminal. The aircraft used for the Castlegar-YVR route is the 50 passenger Dash 8 300.

Pacific Coastal Airlines can be characterized as a commuter airline based on its primary function of point-to-point service between the Greater Trail Region and Vancouver International Airport. Pacific Coastal offers limited connections to further destinations. As was noted in the traveller surveys, the vast majority of passengers are travelling between the Greater Trail Area and the Lower Mainland. The only other major destination noted in the traveller surveys was Vancouver Island, which is also served by Pacific Coastal from the South Terminal at YVR. Pacific Coastal uses 19 passenger Beech 1900 aircraft and a 30 passenger Saab 340 A on this route.

In terms of benefits from airport operational and infrastructure improvements there are a couple of major categories of users benefit groups that can be identified: existing users and benefits from new additional generated air traffic.33 The table below summarizes the airline customer traffic types, the likelihood and the nature of any direct economic impacts in the Greater Trail area.

Figure 7-1 Benefits from Airport Investment Category Airline Customer Traffic Type Likelihood & Direct Impact in Trail Area Existing Pacific Coastal Airlines: new Possible: continuation of same economic Users destinations such as Kelowna. impact trends outlined in this report. Not likely: incremental direct local Regional Airline economic impact doubtful because of New the low probability of service being Additional established. Traffic Air Charter Operator Not likely: small incremental local impact.

Existing Users Scheduled Passenger Service Pacific Coastal Airlines: The results of the Traveller Survey indicated that almost half of the respondents spent one to five nights in locations other than Trail on their most recent trip. One quarter indicated that they spent zero nights in other locations. This suggests that the air service functions as a significant commuter service for a number of travellers. When asked about the purpose of their trip that used the Trail Regional Airport the most frequent response cited was “visiting friends and family”, followed by a “mix of business and pleasure” and then for “business” purposes only. Consistent with the trip purpose almost two thirds of the Traveller Survey respondents indicated that they purchased their ticket between one to four weeks in advance. Survey respondents in an open-ended question revealed that a new short-haul service to a destination such as Kelowna for medical appointments, business or other purposes was of interest. However, before a new commuter air service could be offered to a location other than Vancouver International Airport’s south terminal from Trail issues such as “airport security” at Trail airport would need to be addressed. While a new commuter destination may be interest to some travellers it needs to be considered alongside the cost and travel impacts that may occur to the existing traffic base. Survey respondents overwhelming indicated that ease of travel, and cost of flying, from Trail Regional Airport were two of the most important factors in determining their existing use. Finally, an increase in commuter traffic may result in a need for better aviation fuelling infrastructure.

33 Jorge, Jose-Dormas and de Rus, Gines (2004), Cost-benefit analysis of investments in airport infrastructure: a practical approach, Journal of Air Transport Management, p. 311-326.

New Additional Traffic Scheduled Passenger Service Airlines face an opportunity cost in terms of the choice of locations on where to deploy their aircraft. Thus, it is not surprising that it may be hard to attract another regional carrier to West Kootenay Regional Airport, or Trail. While regional airline service to a destination such as Calgary may be interest to some travellers it needs to be considered alongside the cost and travel impacts that may occur to the existing traffic base.

It is worth noting that since the merger of Air Canada and Canadian Airlines, Air Canada Express (Jazz) is the only major regional airline operating in the southern portion of Western Canada. This is expected to change with the introduction of a new regional airline by Westjet, using Bombardier Q400 70 seat turboprop aircraft. Operations of the new airline are expected to begin in 2014. However, it is unlikely that the West Kootenays will be among the first sites served due to the relatively low passenger volumes; and in the event the new airline did provide service it is most likely to use the Castlegar airport. The minimum take-off distance for the Q400 aircraft exceeds the current runway length at Trail.

Potential Risks to Scheduled Service 1. Financial distress or withdrawal of the existing carrier (Pacific Coastal Express): One potential risk to continued scheduled service at the Trail airport is financial distress or withdrawal from the market by Pacific Coastal Airlines. However, the major factor in the viability of the service is the local demand and competitive conditions. The existing Pacific Coastal Service enjoys a high level of customer satisfaction and community support. Under these conditions, a change in the corporate structure of Pacific Coastal Airlines or entry of a replacement service following the withdrawal of Pacific Coastal may not significantly impact service. HawkAir service to Northern BC provides a relevant example. Hawkair started air passenger services between Vancouver and Terrace in 2000. They quickly expanded to serve most of the airports of northern British Columbia. In October 2005, they were forced to file for protection under the Company Creditors' Arrangement Act (Bankruptcy protection) and reduced the number of aircraft in their fleet from 5 to 3. Hawkair was purchase by the Alberta firm Bar XH in 2007, and then by Central Mountain Air in 2010. Service continues between Terrace, Smithers, and Prince Rupert and YVR`s South Terminal using two Dash 8-100 and two Dash 8-300 aircraft in spite of the original company`s financial difficulties. HawkAir moved their operations from the South Terminal to the Main Terminal at YVR in 2011.

2. Entry of WestJet`s regional airline into the region: Should Westjet`s new regional airline offer sevice to Castlegar, it is unlikely that the existing scheduled service at Trail would survive for two reasons: • Entry of a new competitor into a local airline market typically results in substantial fare discounts for a period of time. • Whereas regional airlines such as Air Canada Express and WestJet`s new regional airline provide additional revenue to their respective major carriers by feeding passengers onto their larger networks, Pacific Coastal`s service is dependent on the economics of the existing point to point service, which makes them more vulnerable to competition.

General Aviation Air Charter Operator: could be either fixed wing or rotary based. An opportunity could arise in the future as a result of a specific project but with the airport in Castlegar the chances of attracting a permanent long-term customer at Trail Regional Airport is likely to be low based on the foreseeable level of activity.

79 7.2 Airport Operations Benefits & Risk Framework Analysis of the benefits and risks of airport operations and of specific airport infrastructure capital investments needs to be placed in the context of how an airport owner derives revenue to cover the expenses since the ability to generate revenue is the prime risk management tool used by airport management. Airports earn revenue essentially by charging direct and indirect fees on aircraft and passengers for the use of facilities. Typical airport fees and charges in British Columbia include: a) Direct aviation and security charges (general terminal charges, landing fees, aircraft parking fees, fuel commissions). b) Passenger fees (for transiting the airport & Airport Improvement Fees). c) Concession fees (parking, taxis and ground transportation services such as car rental). d) Property income (retail, office rental, leases). e) Non-aviation related (commercial property development, golf courses, etc.).

An airport's ability to earn revenue from the above sources is a function of the demand for air service, the customer types served by the airport, the geographic location of the physical infrastructure among other factors.

The table below highlights the source of revenue earned at Terrace, Comox and Victoria, airports.34 It also provides a common ratio analysis to illustrate the relative contribution that each of the revenue source makes to their respective operation. The table also shows that larger airports such as Victoria International have a greater capacity to generate concession fees and diversify revenue streams from activities such as property and non-aviation uses of airport lands than a smaller airport. It also shows that Comox airport, which is located on the Canadian Air Force base, is more dependent on direct aviation fees than some of their peers because they do not have larger property holdings to develop.

Figure 7-2 Typical Airport Revenue Sources Airport Terrace Comox Victoria Revenue Sources Terrace Ratios Comox Ratios Victoria Ratios Direct Aviation $62,559 3% $1,811,721 49% $2,941,521 13% Passenger Fees $1,280,052 63% $734,970 20% $9,891,358 42% Concession Fees $642,599 32% $900,443 24% $6,950,924 30% Property & Non-aviation $50,964 3% $281,331 8% $3,493,203 15% Total Revenue $2,036,174 100% $3,728,465 100% $23,277,006 100%

34 Data sources: Terrace-Kitimat Airport Society Statement of Revenue & Expenditures 2011, 2011 Accountability Report, Comox Valley Airport Commission and Victoria Airport Authority Statement of Operations 2011.

80 In terms of demand analysis the trip purpose of the passengers is an important factor when considering both the type of infrastructure required (and resulting costs) and the benefits from additional revenue that might be earned by the airport. Airports usually earn much higher revenues from long-haul passengers than short-haul passengers, or commuter traffic.

This is a function of the more extensive services that must be provided to service long- haul passengers and their greater propensity to spend while at the airport, along with the number of on-site aviation staff (ticket agents, baggage handlers etc.) and airport personnel and government regulatory officials required to serve the customers.

Since airport revenue is ultimately determined by passenger numbers and general aviation activity airports have significant exposure to economic and industry cycles and this impacts the risk profile of a specific capital project. Financial analysts in the transportation infrastructure sector have noted that airports have the highest volatility in terms of financial returns compared to asset classes such as composite infrastructure assets, toll roads, utilities, stocks and bonds.35

To the extent that an airport has a diversified revenue mix (from the above mentioned sources) it is important to note that aviation, security charges and retail property rentals will have large fixed components. That is, the user of the facilities (the airlines) and retail tenants take the first hit in any economy down cycle. Hence, airport revenues are partially hedged against bad times, and are far less impacted than airline revenues. However, this cuts both ways, and in good times, revenues are likely to grow less rapidly than airline revenues. Small airports without a diversified revenue base are exposed to significantly more risk should the demand for aviation service drop, or a competing airport is able to offer a broader range of flight options in terms of destinations served.

Investments in airport infrastructure have generally long lead times. The investment costs are made today, while the revenues to cover these costs are spread over a long period (often over 30 years) in the future. This involves risks, such as: o Traffic growth is lower than foreseen, with insufficient future revenues to cover the costs. o Insufficient investments in airport capacity, as traffic growth is higher than foreseen.

These risks come mainly from the large degree of uncertainty to the future growth in aviation demand. These uncertainties are related not only to the growth of the aviation market and its determining factors (such as economic growth and fuel prices), but even more to the share of the market a specific airport can expect and its determining factors

35 Peng, Hsu Wen and Newell, Graeme (2007), The Significance of Infrastructure Investment Portfolios, Pacific Rim Real Estate Society Conference, 21-24 January 2007, Fremantle.

81 (such as the strategy, performance and competitive position of the relevant airlines at the airport).

For a small regional airport the primary market dynamics would include the network strategies of a specific airline and the actions of competing alternative airports. These dynamics may result in an uneven distribution of the aviation market over distinct competitors in the market: airports and airlines. Competition between airline networks plays a central role in determining the traffic levels so it is important to consider the possible actions of specific competing alternatives, which the passengers realistically have. These alternatives can be competing airlines at the same route, competing routes (and hubs) to the same final destination or even competing airports in the same catchment area. Hence, the market share of airports and airlines may change significantly, due to network dynamics and forecasting the specific timing of a level of absolute demand in a thin aviation market represents another risk factor for airport management to consider.

The table below provides a comparison of airport fees applicable to air carriers at both Castlegar and Trail. At the present time the Trail Regional Airport business model provides a cost saving to the air carrier. However, this cost advantage could erode if the business model was to change and there was less reliance placed on volunteer labour at Trail Airport. Figure 7-3 Comparative Airport Fees Castlegar and Trail

Airport Carrier Aircraft Landing Terminal Total Passenger Passenger Total Per Total per Fee Fee Fee Capacity Pax Pax (70% LF)

Castlegar AC Express Dash 8-300 $27.05 $120.67 $147.72 $7.00 50 $9.95 $14.22

Castlegar Pacific Coastal Saab 340 $27.05 $84.49 $111.54 $7.00 30 $10.72 $15.31

Castlegar Pacific Coastal Beech 1900 $27.05 $48.20 $75.25 $7.00 19 $10.96 $15.66

Trail Pacific Coastal Saab 340 $7.00 30 $7.00 $7.00

Trail Pacific Coastal Beech 1900 $7.00 19 $7.00 $7.00

7.3 Trail Regional Airport Infrastructure Specific Risk Assessment The scope of the work for the Trail Regional Airport Economic Impact Assessment included the identification of the risks associated with airport capital investment. As such, a prime source of information for the project team was the Trail Regional Airport Master Plan 20111-2031, prepared by SNC-Lavalin in September 2011. The study team also used the insights gathered from this specific project, direct observation of airport operations and the team members` experience to develop the material that is discussed in the subsequent paragraphs. The table on the following page summarizes the infrastructure items that will be discussed and the possible benefits.

Figure 7-4 Airport Infrastructure Types Description Comments on Benefits Aviation Fuelling Facilities Would accommodate present & future passenger traffic loads Commercial Property Would provide additional location in community for Development business activity compatible with airport Passenger Security Screening Would allow airline to access airports/destinations where CATSA was a regulatory or operational requirement Runway Extension Would allow aircraft to get a higher takeoff rotation before you have to climb Runway Lighting Would extend hours of operation Security Fencing Would enhance airside security Terminal Building Would accommodate present & future passenger traffic loads Utilities Infrastructure – Would accommodate present & future passenger Electrical, Sewer & Water. traffic loads

Aviation Fuelling Facilities: One infrastructure risk to consider is the method used to fuel aircraft and the possible relocation of existing fuel facilities such as the flying club’s aviation fuel. According to the airport master plan the existing fuel tank is 50 years old. Member of the study team are aware of the problems that can be experienced in the service station segment of the fuel market where leaks to underground tanks have occurred. It often takes years to remediate the site and without any soil sampling it is difficult to determine if any remediation of possible contaminated areas is required.

Commercial Property Development: The remarks in the airport master plan about the development of potential commercial properties on airport lands seems to be based more on a theoretical planning possibility, rather than any indications of actual market possibilities. Key questions that would need to be answered in the business case are as follows: o How many aviation firms would be interested in retaining their business at the airport if they were required to relocate within the airport property or if fees were increased? How many new firms would be interested in locating to the airport? o What is the demand for serviced land on the airport from non-aviation interests?

Passenger Security Screening: The project team also notes that the present operation of Trail Regional Airport with respect to the absence of any passenger, baggage, or cargo screening procedures, or facilities represents a risk factor that must be considered. From our perspective the issue of potential security requirements in any new terminal building development is not fully addressed in the airport master plan.

83 There is a very real possibility that the Canadian Air Transportation Security Authority (CATSA), and/or Transport Canada, could trigger a change to the current operating practices in Trail. At the very least in the short-term the present arrangements may make it more difficult for the existing airlines to offer any new air services to other commuter destinations. Regulatory agencies could insist not only on new security procedures but also dedicated space in a new terminal building.

Runway Extension: In regards to airside infrastructure issues the information in the airport master plan seems to suggest that the need for a runway extension is based on incomplete information. The runway is 4001 feet and the altitude is 1427 feet ASL. Before a business case can be made to support an investment in runway infrastructure it is very important to understand more fully the operational impacts of the present situation. Key questions that would need to be answered in the business case are as follows: o Under what conditions do the runway length limitations affect aircraft operations? When the aircraft are fully loaded? o How often do situations occur where the present runway length is an issue? o When is temperature a factor? At what temperature does this occur and how often? Limited wind conditions? How often does that occur? Or a combination of the above? o What are the financial penalties incurred? Have passengers ever been left behind? Has baggage or cargo ever been left behind?

Based on our analysis of the types of airlines offering service and the market niche that Trail Regional Airport occupies in the area’s transportation network it is not abundantly clear that there is a strong business case at the present time to change the design aircraft for airport. A Saab 340 is probably the largest aircraft that is foreseeable within the current planning horizon. A change in the design aircraft to a Dash 8 would require a substantial change in commercial operations that in turn would have a knock-on effect for the length (and possibly the width) of the runway.

Runway Lighting: From the study team’s perspective, airport lighting is not the most significant issue. The runway is certified as a Code B Non Instrument runway and is for Day VFR use and is likely to remain so. The alternative is to mark the high terrain around the airport. That is costly in terms of placing beacons that include concrete pads, lights and a power sources in remote locations. Additionally there are ongoing maintenance costs. The runway lights will provide some benefits in marginal weather but a cost/benefit analysis should be conducted before moving forward with this project.

Security Fencing: The project team observed that the airport master plan does not address is the topic of fencing. With the exception of the area around the parking lot the airport has a substandard fence. Adding security fencing can be an expensive project with cost largely determine by the perimeter length on the area to be protected.

84 Terminal Building: From the perspective of the present study team the key infrastructure issue for Trail Regional Airport is the development of the new terminal building. Based on a conservative outlook even if scheduled air passenger traffic doesn’t maintain the recent robust growth rate, at some point over the next 10 years the existing facility will become inadequate to meet the needs of the airline, the customers and members of the flying club.

Utilities Infrastructure: A decision to construct a new terminal building at Trail Regional Airport would trigger requirements for upgrading of utilities infrastructure (water, sewer, power). The full extent of any new utility infrastructure will depend on whether existing services are relocated and the quantity of serviced land the Regional District of Kootenay Boundary decides to make available. In addition, parking lot(s) may need to be redeveloped/relocated; and access and service roads may need to be built. Given the relatively small size of the general aviation community in the Kootenay Region and the number of competing airports available there may be some price sensitivity amongst existing airport users to pay the cost of upgrading utility infrastructure. The chart below provides a summary of the typical transportation project risk factors for capital projects and the primary risk mitigation technique that can be applied should a decision be made to proceed with a specific project.36

Figure 7-5 Project Specific Airport Investment Risks Risk Factor Major Impact on Project Primary Risk Mitigation Techniques Construction Cost overrun Accurate project cost estimate with sensitivity analysis, & project management Contractual Cost overrun Risk transfer – fixed price contract Economic Benefit deficit & cost overrun Customer demand analysis Environmental Cost overrun Soil sampling Financial Benefit deficit & cost overrun Accurate project cost estimate with sensitivity analysis Return on Clear identification of the potential Sensitivity analysis Investment incremental financial benefits a project is intended to achieve will result in a more accurate Net Present Value estimate of the project.

36 Brechman, Joseph and Wu, Qing (2006), Cost overruns Risk Analysis in Transportation Infrastructure Investments, UBC P# Project Working Paper 2006-05.

85 Risk Factor Major Impact on Project Primary Risk Mitigation Techniques Funding Project termination Accurate project cost estimate with sensitivity analysis Political Project delay or abandonment Collaboration & consensus based stakeholder consultation Project Design Benefit deficit & cost overrun Selection of project design standards (i.e. design aircraft for runway)

7.4 West Kootenay Regional Airport Discussion One key element to air service is the question of reliability. The ability of the air carrier to provide their service on a regular and timely basis is an important factor for customer satisfaction. There has been considerable discussion on this issue as it relates to Castlegar and Trail airports. There is an indication that during the winter months Trail is much more reliable that Castlegar. If this is the case then what is the primary reason for the difference given the proximity of the two airports?

The distance from West Kootenay Regional Airport (Castlegar) to Trail Regional Airport is 14.49 nautical miles. Environment Canada has a weather reporting station at Castlegar and forecasts weather for the region. Aviation weather forecasts are made for the region and do not differentiate between Castlegar and Trail. Any flight planning for either airport would use the same weather information.

Given the mountainous terrain local anomalies such as winds probably do occur; for example, the valley at the Trail Regional Airport (TRA) is quite narrow compared to West Kootenay Regional Airport (WKRA) so one might expect to have stronger winds at TRA. As well the proximity of mountains may result in low level clouds or fog clinging to certain peaks resulting in local weather conditions. One advantage that TRA has is that the mountains in the vicinity (5 nautical miles) of the airport range from 5700’ to 6500’ ASL while the mountains around WKRA range from 6500’ to 8000’. The lower terrain can facilitate the movement of weather due to fewer obstructions. Having said this; one would expect that generally speaking, weather between the communities would be very similar given their proximity and being in the same valley.

The south RNAV approach to the TRA is over US airspace. The terrain south into Washington State tends to be lower and more open making for a somewhat easier approach to the airport.

86 However, there can be a conflict with the Roosevelt Military Operations Area (MOA) which is NOTAM’d when in operation; this can on occasion preclude a south approach to the TRA and would force the aircraft to fly the northern approach which could include doing an approach to WKRA and then flying down the valley. On rare occasions the aircraft will land at Castlegar.

Pacific Coastal has indicated that for the south RNAV approach to Trail their minimums are 2900’ with visibility of 3 miles. The RNAV approach at WKRA is also 2900’ and 3 miles visibility although it is reported that Air Canada Express’s minimum are 3000’ and 4 miles. TRA has strobe runway identification lights on both runway 16 and 34 while WKRA has strobe runway identification lights on runway 15 and sequenced strobe approach lighting on runway 33; both 15 and 33 runways have Precision Approach Path Indicator (PAPI). Without a detailed weather analysis it is difficult to determine how significant the differences are between the minimum of the two air carriers. The lighting at WKRA provides an advantage and Pacific Coastal has indicated that sequenced approach strobe lights would be helpful at TRA. It is unlikely, however, that these elements account for a significant difference between the two sites.

The final element to look at is the air carriers operating procedures. Air Canada’s (AC) service into WKRA is provided by Air Canada Express. AC provides an integrated system with service through Canada and the world. AC services Castlegar with Dash 8 aircraft with service to both Vancouver and Calgary. Aircraft are blocked into time frames to ensure maximum utilization. In simplistic terms this permits aircraft to be used on multiple routes and ensure that they are in appropriate locations for specified maintenance. The movement of these aircraft also has implications for crew times and crew changes as well as for interconnecting passengers. Given this situation, the carrier has limited flexibility when it comes to delaying flights due to weather.

The decision to delay a flight for an hour may have a rippling effect throughout the system impacting maintenance, crew hours and connecting passengers and therefore have a significant impact on the entire system. The costs of these delays can be significant so that the carrier must balance the inconvenience of some passengers with the implications for the entire system and other passengers, not to mention the cost implications.

Given AC’s situation it is not surprising that during winter months when weather is a factor and with no reasonable chance of the weather improving at the destination that flights are cancelled rather than just delayed since as noted above the implications and costs for the airline out weight the impact of those affected by the cancellations. These are good operating procedures and are necessary if a large system is going to function efficiently.

87 Pacific Coastal Airlines provides air services throughout British Columbia utilizing a variety of aircraft. The company is based in Vancouver and has serviced TRA since 2006. They service TRA utilizing Beech 1900 and Saab 340 aircraft. Pacific Coastal also provides charter services.

The nature of Pacific Coastal’s structure with both scheduled and charter services operating from a central base gives the airline flexibility in terms of aircraft utilization and an ability to move larger or smaller aircraft onto various routes depending on demand. This flexibility allows the airline to make decisions regarding service into a community on any given day that is not open to a larger carrier. Pacific Coastal has attempted to build strong relationships within the community and to work to ensure that there is a high level of reliability. They are very proud of their commitment to the community and are endeavouring to build stronger ties.

Pacific Coastal indicated that they would wait up to four hours to ensure that the flight arrives at TRA. In some cases if the morning flight is delayed they will wait until the next flight is due and swap in a larger aircraft that can handle the large load. This kind of flexibility is not available to large carriers. As well, Pacific Coastal has on occasions landed at WKRA and shuttled passengers from Castlegar to Trail. In the wintertime one of the shuttle buses that are used at Vancouver International to connect the south and main terminals is moved to TRA to accommodate flights diverted to WKRA. It was indicated that this occurs once every three weeks during the wintertime. If the situation occurs at other times of the year local vans are utilized.

TRA has web cams and with the assistance from airport volunteers and local staff Pacific Coastal is able to make decisions on whether the weather is changing and how fast. This gives them added information in which to make informed decisions on whether to go or cancel. It appears that the most important factor for increased reliability of the TRA is the different business models of the two carriers serving the region. Air Canada is tied to a national and international system, which limits flexibility in terms of delays due to weather. They also do not have the option of going into TRA and so are unable to take advantage of situations where weather conditions at TRA may be more favourable. On the other hand Pacific Coastal by the nature of their business model has the flexibility to provide service to the region without significant concerns about the impact to their entire system. Any problems can usually be addressed by moving aircraft or personnel to meet specific needs. This is not to imply that one model is better than another but in this case the flexibility of Pacific Coastal provides an advantage to TRA in terms of reliability of air services.

There are many factors which impact on reliability of service into TRA and WKRA. Everything from weather reporting, the height of mountains, the approaches and different approach limits but it appears that the most significant aspect is the business models of the two carriers which allows one to provide a flexibility in service that the other can’t provide.

8 CONCLUSIONS The Regional District of Kootenay Boundary recently completed an Airport Master Plan to develop and facilitate future airport operations that may be required to maintain both current and/or future service level expectations. Prior to facilitating and/or advancing the initiatives outlined in the Master Plan, the RDKB wishes to complete an Economic Impact Assessment Study of the airport to evaluate and determine the full economic impact of the facility/service within the Greater Trail geographic area. Thus the project team will present conclusions that will address the main findings with respect to the following research questions:

Role of the Trail Regional Airport The research results indicate that the Trail Regional Airport plays a valuable niche role in a local passenger transportation network that is characterized by good highway access between two regional airports in relatively close proximity. The transportation role that the Trail Airport plays is also heavily influenced by the presence of two international airports that have the ability to draw customers from a wide geographic area. As a result, Trail Regional Airport’s dominant role is to connect residents of Trail with the Lower Mainland of British Columbia and support travel into the community from the same destination.

A small percentage of employers used the Trail Regional Airport for cargo/courier, air charter, or for private aircraft purposes.

The primary reasons cited for travel by passengers using Trail Regional Airport included to visit friends and family a mix of business and pleasure and for business purposes only. The research findings suggest that Trail Regional Airport performs a very valuable role in connecting the community to other locations. This important outbound transportation role while not contributing to direct local economic impact in the Greater Trail area should be kept in mind when making decisions about the level of future airport investment. The convenience of travel in terms of time saved and cost, and the ability to travel from a rural community for pleasure, business and personal reasons contribute to the local quality of life. Yet, this must be tempered by the fact that almost half of the survey respondents indicated that they would have flown using another airport and 38% indicated that they would have travelled by another mode of transport. Nine percent of survey respondents indicated that they would not have travelled to the Greater Trail area

Economic Impact: The research findings discussed below are derived from both the Input-Output and Collection of Benefits methodology.

1. Economic impact of the Trail airport based on input/output analysis is relatively small. This is primarily due to the relatively low level of passenger traffic, the business model used to operate the airport and the relatively minor contribution that the small general aviation sector is able to generate.

2. Scheduled service at Trail does provide significant benefits in terms of meeting mobility needs of residents in the Greater Trail area primarily in the areas of travel convenience and cost savings for existing passengers. The availability of an alternative air service to Air Canada Express provides benefits to all scheduled air passenger service customer who use the West Kootenay Regional Airport in Castlegar passengers due to the competitive effect on airfares.

3. The major cost savings through the use of Trail Regional Airport rather than West Kootenay Regional Airport are due to lower airport and air navigation fees. The RDKB has been able to keep airport fees low due to the availability of volunteer labour. This calls into question the sustainability of low cost operations under the current airport management business model in the long run, or with increased traffic. It also calls into question the ability of the airport owner to generate financial returns to fund airport infrastructure investment from the operation of the airport. The research findings indicate that private interests, either individual travellers, employers, or the airlines capture the full benefits of this lower airport management cost structure.

4. Recent rapid growth in passenger traffic is primarily influenced by the major capital projects (particularly the Waneta Dam expansion) and is unlikely to be sustained.

5. Investment in improvements to Trail Regional Airport facilities is subject to significant risks. In addition to the possibility of declining passenger traffic, risks include increased costs due to regulatory requirements for adoption of standard security practices, and potential changes in airline competitive services, which would make the airport less competitive and perhaps redundant for scheduled service.

Social Values Non-Monetary Impacts In addition to the economic benefits described in this report, the Trail Regional Airport provides access to the area and some limited general aviation services that enhance the wellbeing of the Greater Trail area. Aviation activities that take place on a periodic basis in addition to scheduled commercial passenger service include air traffic from local and itinerant planes by private pilots involved in recreational flying, and flight training. The Selkirk College aviation program benefits from the airport through the availability of an alternative airport for training purposes. As well, air ambulance, wildfire protection and emergency management services benefit from the airport. The air cadet program benefits from the airport by providing for glider training and furthering the aviation qualifications of the cadets. On occasion the airport serves corporate owned, or chartered aircraft. From a general perspective the airport also provides an airstrip for itinerant aircraft encountering problems while traversing the mountainous terrain and needing a place to land.

9 RECOMMENDATIONS The project team does not foresee a situation in the near or mid-term future where sufficient commercial air passenger traffic will be generated to cover the cost of airport operations. Therefore, It is unlikely that additional airport costs will be fully recoverable from users because of the relatively small level of commercial air passenger traffic and general aviation activity and because the airport users who provide a social benefit to the community do not directly make a financial contribution to airport operations.

The risk characteristics in two areas where costs are likely to increase are as follows:

1. Increased operational costs from a non-volunteer business model; these costs would largely disappear if the air service does so they represent a variable cost to the RDKB.

2. Capital costs for infrastructure investment, which will persist even if the air service declines, vanishes, or grows. Thus, they represent a fixed sunk cost once an investment has been made.

o RDKB engage in sensitivity analysis of the property tax impacts before any major airport infrastructure investment is made.

Airport Operations & Management The study team explored the issue of whether Trail Regional Airport was a good candidate for the provision of contracted management by a firm specializing in airport management to see if there were economies of scale that could be achieved in terms of costs and business development.

92 The project team concluded that private sector airport management firms look at what the existing situation is at the airport then they look at the potential to grow the business. They also examine what the situation is in terms of existing equipment, facilities, infrastructure etc. and whether they will need to be replaced. These firms also perform a market assessment to look at where the competition is and what the situation is at a specific airport property. Firms providing airport management services want to know the local demographics and whether the key industries are stable and if the airlines are stable. Airport management firms prefer longer-term contracts such as 15 to 20 years but if there is some uncertainty they will look at shorter contracts. Based on the above considerations it is unlikely that a specialized private sector airport management firm at Trail would find the opportunity sufficiently profitable, due to the close proximity of Castlegar. Thus some form of public sector management and oversight will be required for continuing operations and future development.

While the positive economic impact generated by airline competition in the West Kootenay area is indeed an outcome of the operation of the Trail Regional Airport the sustainability of the current business model at the Trail Airport over the longer term is a topic that warrants serious discussion. Airlines such as Pacific Coastal Airlines and the general aviation community in Trail are price sensitive. Thus, there are some very real upward limits in terms of how the cost of airport operations can be transferred either the directly to the customers, or indirectly onto the passengers. This will require the RDKB to continue focus on innovate ways to maintaining a low cost airport business model that is sustainable in the long term. It is recommended that the following actions be considered as ways to continue with providing a low cost airport:

37 Song, D. 2003, ‘Port co-opetition in concept and practice’, Maritime Policy & Management. Vol. 30, no. 1, pp. 29-44.

93 same or similar markets should consider a win-win strategy, rather than a win- lose one. Such a model may well help airlines industry and airport executives alike reconcile the often-conflicting evidence in the literature that suggests an either/or approach to a development strategy. The concept of co-opetition would seem to occupy the middle ground between the co-operative and competitive approach that typifies much of the local media coverage. Thus, it may well prove useful as concept for discussing issues such joint marketing of the West Kootenay airports to those outside of your local markets.

Airport Infrastructure Investment Specific principles that should be considered in terms of Trail Regional Airport business development and infrastructure investment decision-making include:

Infrastructure Decision Making o Recognize increased uncertainty and thus risk in the outcomes of investments; o Given the uncertainties, investments in low-cost airports and airport facilities should be staged. Efforts, should, for example, go into: o Establishing and preserving existing traffic, o Focusing on how to develop low-cost passenger facilities if a decision is made to build a new terminal building; and o Investments in technical support for refuelling, security, etc. o Creation of flexible terminal building designs with consideration given to: o Scaled development of the site, for example by delaying runway expansion, or the full construction of a building so it meets immediate needs, o Design of flexible terminal building facilities to continue development as required, o Deferring investments until their need has been fully demonstrated.

The research findings of this report are consistent with the operation of a low cost airline. Thus, the study team believes the above recommendations are consistent with the material contained in the literature review included in Appendix A.

94 10 APPENDIX A – LITERATURE REVIEW

LOW-COST AIRPORTS FOR LOW-COST AIRLINES: FLEXIBLE DESIGN TO MANAGE THE RISK38

Summary of Research Findings The paradigm of airport planning and design is changing fundamentally. Low-cost carriers now drive much of the future of air travel. Low cost airlines have become significant drivers of airport planning, along with aircraft size and other technical factors. They have very different requirements than the legacy carriers. They focus on cost on alternative ways to handle passengers. They are catalyzing the development of cheaper airport terminals configured internally much different than traditional designs. The factors lead to the creation of “low-cost airports” for low-cost carriers around the “legacy main airports” built to serve the “legacy airlines”. The paper proposes a flexible design strategy to deal with uncertainties. The core element is to build “real options” into the design, which allows the airport owners to match the development to the way traffic demand unfolds. (pp.2 & 8)

Arguments for Paradigm Shift The paper presents and defends the hypothesis that the ascendancy of low-cost airlines entails an increased importance and expansion of the distributed network of low-cost airports, together with the increase in metropolitan multi-airport systems. This thesis runs counter to the dominant trend of the past generation. The basic proposition leads to the corollaries that, in general, but with exceptions: o The development of low-cost airports and airport facilities is largely catalyzed by the expansion of low-cost airlines, in the sense that low-cost airlines come first, and the low-cost airports most come afterwards. o Low-cost airports largely develop in competition with major airports, either as secondary airports in a metropolitan multi-airport system, or as a distributed destination that by-pass the use of a centralized metropolitan hub. The business model for low-cost airports is distinct from that of the traditional airports. Mirroring the difference between low-cost and legacy airlines, low-cost airports emphasize profitability through operational efficiency and minimal frills. In contrast with the traditional airports, these low cost airports will be characterized by an absence of expense buildings, a focus on efficient, and sparse commercial facilities. (pp. 2,3, &5)

38 de Neufville, Richard (2007), Low-Cost Airports for Low-Cost Airlines: Flexible Design to Manage the Risks, paper prepared for Special Issue of the Journal of Transportation Planning and Technology. Massachusetts Institute of Technology Engineering Systems Division Working Paper Series ESD-WP-2007- 15.

Low-cost airports compete with major airports in three major ways: o They provide alternatives to the major hubs. In this immediate sense, the low cost airports may be more convenient to some users. o Provide opportunities to by-pass larger hubs. o Low cost airlines and the low-cost airports jointly form parallel networks that compete against the routes of the legacy airlines and the major hubs. (p.5)

The business model for low-cost airports is distinct from that of the traditional major airports. An example of a low-cost airline’s top three priorities are: low airport charges, fast turn-around times, and single-story terminals. Low-cost airports emphasize profitability through operational efficiency and minimal frills. They do this by: o Avoiding grandiose buildings. They favour simply designs. o The interior space of low-cost airport buildings will reflect the performance standards of the low-cost airlines. They will have lower service levels in terms of space per person at any time, and overall higher annual capacity per square meter of space. They will emphasize common hold rooms to minimize the overall space allocated to this function because they process passengers more quickly. o They will not create large amounts of expensive commercial space. Building and operating commercial space on airports can be expensive. (pp. 6, 12 & 13)

Low-cost carriers like to use low-cost, secondary airports for two reasons. They appreciate the low charges. They also like the fact that they are relatively uncongested and thus free from ground and air traffic control delays. This lack of congestion, together with work rules that permit fast turn-around times at the gate, enables low- cost airlines to increase the flying time and thus productivity of the aircraft, and thus lower their operating costs. Low-cost airlines promote secondary airports because they are generally integral to their efficiency.

Conclusions About Paradigm Shift Political and business leaders concerned with airport planning and development need to think carefully and cautiously about future investments.

Suggested Approach to Airport Planning Specific implications arising from research: o Increased uncertainty and thus risk in the outcomes of investments; o Recognition that infrastructure investments are part of a system, and need to be coherent with how the system will eventually evolve. o Need to be cautious before focusing on a single course of action, and most especially on a single expensive airport project; o Complementarily, the need to provide the basis for a distributed network of airports in the region. o Given the uncertainties, investments in low-cost airports and airport facilities should be staged. Efforts, should, for example, go into:

96 o Establishing and preserving sites and traffic corridors, o The preparation of low-cost passenger facilities; and o Investments in technical support for refuelling, etc. o Creation of flexible designs with consideration given to: o Scaled development of the site, for example by delaying full construction of a building so it meets immediate needs, with flexibility to continue development as required, o Design of flexible terminal building facilities, o Deferring investments until their need has been fully demonstrated. (pp. 16 to 24)

97 11 APPENDIX B – AIRPORT GOVERNANCE MODELS It is important to note that there is no single ‘best model’ of airport governance/management. In the context of the Regional District of Kootenay Boundary and the operation of Trail Regional Airport it is useful to review the major types of airport governance models used in the management and development of transportation infrastructure since these governance options significantly influence the business model used for actual airport operations, strategy implementation choices. However, it is important to note that the choice of airport governance model is not responsible for the fact that it is very difficult for a small airport to be financial self-sufficient. In 2004, Transport Canada released a study that examined the financial viability of divested regional and small airports. The Transport Canada study revealed that39: o 48% of airports are not even able to cover their annual cost of operations and are unable to finance capital at all. o Even those airports managing a surplus on operations can only finance about a quarter of their capital requirements. o Few, if any, regional and small airports are viable (in the sense of being able to cover their operating and capital costs) at the tenth anniversary of the federal National Airports Policy.

It is also important to note that the airport operations governance model (volunteers) currently being used at the Trail Regional Airport is unique in Western Canada according to the best knowledge and information available to the study team members. While it is not uncommon for airports and small craft harbours to have a volunteer board of directors of a not-for-profit corporation provide oversight and strategic direction the use of a dedicated team of volunteers to essentially backstop the critical functions associated with airport operations in indeed unique to Trail.

It is useful to summarize the current governance/management ‘strengths’ and ‘weaknesses’ summarized in the table below. Readers are urged to keep in mind that the comments in the tables below are relative and based on the current operating context and organizational purpose of this report. The application of these governance models to other airports or situations is beyond the scope of the present study.

In terms of an airport with an active schedule passenger service and some general aviation activity is the Prince George Airport Authority Inc. The PGAA is incorporated under Part II of the Canada Corporations Act as a non-share capital, not-for-profit corporation and all earnings from are reinvested in airport operations. The PGAA has received both federal and provincial financial support for capital projects. Another example of a not-for-profit model used in the context of a small general aviation airport is the provincially incorporated Creston Valley Regional Airport Society.40

39 InterVistas Consulting Inc. (2005), BC Regional Airports: A Policy Guide to Viability. 40 http://www.crestonairport.ca/

Figure 11-1 Not for Profit Governance Model Not for Profit: Constituent Board, Policy Governance, &/or Entrepreneurial Focus Description Strengths Weaknesses Comments (Example) Prince Clear purpose. Airport needs to be of a Airport facility is leased (60 + Clear accountability. sufficient size to generate years) from federal government George Commercial based revenue required for that owns the infrastructure. (Part II of the decision-making. sustainability. Canada Corporations Act41) May be eligible to apply Turnover in board members. Members are not allowed to for government grants, or Incentive needed for benefit financially. All earnings funding programs. membership participation. from operations are reinvested in 60-year ground lease may airport development. be of sufficient length to Any funds or profits must be used attract some private only for purposes of the society sector capital investment. itself. Creston Clear purpose. Airport needs to be of a General aviation airport. Clear accountability. sufficient size to generate Airport management is provided Valley revenue required for by a caretaker/operator. Duties Regional sustainability. consist of ground keeping, Airport Turnover in board members. security, snow ploughing, Requires a sufficient size maintaining the water system, Society population of general managing the fuelling facilities and aviation enthusiasts willing to general maintenance. become involved in airport operations.

There are examples of airport governance where the airport is city owned and some major aspect of airport commercial operations is provided by contract support. West Kootenay Regional Airport, as discussed in the main body of this report, provides service to both scheduled passenger airlines and the general aviation community is contracted to Sentinel Airport Logistics Ltd. In contrast the much smaller airports in Mackenzie and McBride cater to the general aviation community only. An individual provides contract support for airport operations.

Figure 11-2 City Owned – Contracted Support Governance Model City Owned & Operated- Contract Support & Involvement by City Department (Public Works): Entrepreneurial Focus &/or Operational Focus Description Strengths Weaknesses Comments (Example) West Clear accountability for The amount of money Operations and maintenance commercial operations. committed to airport service contract to Sentinel Airport Kootenay Access to financial operations may be set for a Logistics Ltd. Regional resources from tax multi-year period & slower to West Kootenay Regional Airport Airport base. adjust to changes in aviation has an advisory committee. May be eligible to apply traffic levels. for government grants, or funding programs.

41 http://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs02167.html#notforprofit

99 Dawson Creek The City has hired a Economic development Manager is contracted by the City professional, pressures may create political through his company Taygus experienced Transport pressure on operational, or Management Ltd. Canada trained Airport development decisions. Manager. Internal administrative Other airport staff are City procedures need to be employees and assist with all adapted to unique needs of manner of maintenance and the airport. operations at the airport. Operation has to compete with other departments & services for financial resources. Mackenzie Clear accountability for The amount of money This approach can be implemented airport operations. committed to airport when there is at least 1 individual McBride Access to financial operations may be set for a in the community with sufficient resources from tax multi-year period & slower to knowledge about airport base. adjust to changes in aviation operations. May be eligible to apply traffic levels. for government grants, Split accountability may make or funding programs. it difficult to achieve a proactive approach.

An example of an airport governance model where the airport is city owned and operated as a separate department. The Town of Smithers owns and operates the airport. The airport is operated as a separate department called Airport Serviced: the department has it’s own budget. 42 Budget details on airport are provided in the Town’s audited financial statements. The airport’s operating ratio is 149% indicating that expenses exceed revenue. The Smithers airport has both regular scheduled passenger service and some general aviation activity. Air Canada, Central Mountain Air, Hawk Air and NT Air provide schedule air service, with air charter services provided by firms such as Alpine Air, Canadian, Highland and Interior Helicopters. Nav Canada provides air traffic control.

Figure 11-3 City Owned – Separate Department Governance Model City Owned & Operated- Separate Department: Operational Focus Description Strengths Weaknesses Comments (Example) Town of Clear accountability. Operational focus rather than Air traffic and airport size needs to Proactive planning. commercial orientation. be of a sufficient size to warrant Smithers Access to financial Internal administrative being a separate department. resources from tax base. procedures need to be Continued airport operations can Knowledgeable staff &/or adapted to unique needs of cause financial pressure airport volunteers. the airport. owner to sustain operations during May be eligible to apply Operation has to compete period of weak demand. for government grants, or with other departments & funding programs. services for financial resources.

42 http://www.smithers.ca/index.php/municipal-hall/departments-services/

100 Within British Columbia there are numerous examples of airport governance models where the airport is city owned and operations are a shared responsibility between existing municipal departments. Often these airports are like the one listed in the table below are general aviation airports and do not have scheduled passenger service. These airports may experience some charter and general aviation activity but air traffic volumes are typically very modest.

Figure 11-4 City Owned – Split Between Departments Governance Model City Owned & Operated- Spilt Between Departments (Public Works & Administration): Operational Focus Description Strengths Weaknesses Comments (Example) Houston Amount of money Split accountability may make This approach is often committed to airport it difficult to achieve a implemented when air traffic is Fraser Lake operations & proactive approach. relatively low but some oversight Vanderhoof maintenance can be Staff are not necessarily is required to maintain operations. Fort. St. controlled annually. specialist in airport Access to financial operations, or in commercial Some innovations in airport land James resources from tax base. needs of airport clients. development is occurring as a Valemount May be eligible to apply Operational focus can result of property “ownership” at for government grants, or become reactive. Vanderhoof airport rather than funding programs. Economic development reliance on a ground lease. pressures may create political pressure on operational, or development decisions. Internal administrative procedures need to be adapted to unique needs of the airport. Operation has to compete with other departments & services for financial resources. Low level of private sector capital invested in airports because property made available for development is usually a short-term lease.

101

12 APPENDIX B – EMPLOYER SURVEY As part of the research for the Trail Regional Airport Economic Impact Assessment Study an on-line confidential survey of Employers was conducted during the period June 23 to July 25, 2012. The survey methodology constituted a convenience sample due to project scope and financial resources. During that period the on-line survey collected 31 responses from Employers. Summary information is provided in the figures on the following pages and commentary and analysis on the research findings are provided in the main body of this report.

Respondents from the Service (37%), Government (13%), Non-Government (13%) and the Retail (17%) Sectors accounted for the largest percentage of survey respondents. The tourism sector accounted for the lowest level of employer participation at 3%.

Figure 12-1 Type of Organization

TYPE OF ORGANIZATION 10.0% 6.7% 13.3% Primary resource Manufacturing 13.3% Retail 16.7% Service 3.3% Tourism Government 36.7% Non-government

The vast majority (81%) of Employer Survey respondents were located within 20 kilometers of the Trail Regional Airport

Figure 12-2 Mileage to Trail Airport

102 WHAT IS THE MILEAGE FROM YOUR LOCAL PLACE OF BUSINESS TO THE TRAIL REGIONAL AIRPORT? 0.0%3.2%

1 to 20 kilometres 16.1% 21 to 40 kilometres 41 to 60 kilometres 61 to 80 kilometres Over 80 kilometers 80.6%

103 Survey respondents indicated that 55% of the employers used the Trail Regional Airport more than 6 times per year to transport company personnel. The survey responses indicated that only 7% did not use the Trail Airport to transport company personnel.

Figure 12-3 Frequency of Use by Employers

HOW OFTEN DOES YOUR ORGANIZATION USE THE TRAIL REGIONAL AIRPORT TO TRANSPORT COMPANY PERSONNEL? TIMES PER YEAR (AVERAGE) 6.5%

Do not use 12.9% One or Two (1 or 2)

Three to Four (3 to 4) 54.8% 16.1% Five to Six (5 to 6) 9.7% More than Six (> 6)

Survey respondents indicated that % of the employers used the Trail Regional Airport more than 6 times per year to transport customers and business associates. Twenty five percent of the employer responses indicated that they did not use the Trail Airport to transport customers and business associates personnel.

Figure 12-4 Frequency of Use by Customers

HOW OFTEN DOES YOUR ORGANIZATION USE THE TRAIL REGIONAL AIRPORT TO TRANSPORT CUSTOMERS AND BUSINESS ASSOCIATES? TIMES PER YEAR (AVERAGE)

Do not use 23.3% One or Two (1 or 2)

50.0% Three to Four (3 to 4)

20.0% Five to Six (5 to 6)

More than Six (> 6)

0.0%6.7%

104 Survey respondents indicated that 58% of the employers did not use the Trail Regional Airport to transport supplies, materials, or for business correspondence or courier services. However, 23% of the Employer Survey responses indicated that they used Trail Regional Airport more than 6 times per year for such freight or courier related purposes.

Figure 12-5 Frequency of Use for Courier/Freight

HOW OFTEN DOES YOU ORGANIZATION USE THE TRAIL REGIONAL AIRPORT TO TRANSPORT SUPPLIES, MATERIALS, OR BUSINESS CORRESPONDENCE/COURIER? TIMES PER YEAR (AVERAGE)

Do not use 22.6% One or Two (1 or 2) 0.0% Three to Four (3 to 4) 12.9% 58.1% Five to Six (5 to 6)

More than Six (> 6) 6.5%

The vast majority (83%) of Employer Survey respondents did not use the Trail Regional Airport for company use of chartered aircraft.

Figure 12-6 Company Use of Chartered Aircraft

DOES YOUR ORGANIZATION USE TRAIL REGIONAL AIRPORT FOR CHARTERED AIRCRAFT?

16.7%

Yes No

83.3%

105 The vast majority (94%) of Employer Survey respondents did not use the Trail Regional Airport for company owned aircraft.

Figure 12-7 Use by Company Owned Aircraft

DOES YOUR ORGANIZATION USE TRAIL REGIONAL AIRPORT FOR COMPANY OWNED AIRCRAFT?

6.5%

Yes No

93.5%

Employer Survey respondents indicated varying degrees of customer awareness of Trail Regional Airport. Employers who participated in this survey generally indicated (48%) that the customer’s were “somewhat aware” of the proviso of air service, with 28% indicating their customers had “very little awareness” and 24% indicating that their customers were “aware to a great extent” that their was air service available.

Figure 12-8 Customer’s Awareness of Trail Airport

INDICATE WHAT YOU THINK YOUR CUSTOMER'S AWARENESS LEVEL IS REGARDING THE PROVISION OF AIR SERVICE AT TRAIL 0.0%REGIONAL AIRPORT

No awareness at all 24.1% 27.6% Very little awareness

Somewhat aware

48.3% Aware to a great extent

106 When Employers were asked “How would your organization be affected if the Trail Regional Airport were not available to you?” a slight majority (52%) indicated that their staff would have used another airport, 36% indicated that their staff would have travelled by another mode, 7% indicated that staff would not have travelled to the Greater Trail Area and 7% indicated that their staff would need to adjust their business practices to meet client needs.

Figure 12-9 Impact on Business if Trail Airport Not Available

HOW WOULD YOUR ORGANIZATION BE AFFECTED IF THE TRAIL REGIONAL AIRPORT WERE NOT AVAILABLE TO YOU? 6.5% 6.5% Your staff would have flown to another airport.

Your staff would have traveled by another mode (private vehicle, bus)

51.6% Your staff would not have traveled to the 35.5% Greater Trail Area

Your staff would need to adjust your business practices to meet client needs

Employer survey respondents indicated that frequency of air service (73%), destinations served by airlines (52%,) and cost of air travel (47%) was very important in determining their organizations use of the Trail Regional Airport.

Figure 12-10 Importance of Specific Airport Services

IN DETERMINING YOUR ORGANIZATION'S USE OF TRAIL REGIONAL AIRPORT HOW IMPORTANT ARE THE FOLLOWING FACTORS

35 Very important 30 25 20 Important 15 10 Neither important of 5 unimportant 0 Unimportant

Very unimportant Cost of Cost parking of groundof n (taxi, car (taxi, n Availability air serviceair transportatio Frequencyof

107 The overwhelming number (97%) of Employer Survey respondents indicated that the use of the Trail Regional Airport provides a cost savings to their organization.

Figure 12-11 Cost Savings to Business

DOES SCHEDULED AIR SERVICE TO TRAIL REGIONAL AIRPORT PROVIDE A COST SAVINGS TO YOUR ORGANIZATION 3.3%

Yes No

96.7%

Comments received include the following remarks: Rates are very competitive and significantly below where they were before there was an alternative to Air Canada at Castlegar Regional. Local air service means better community productivity in regards to tourism, air ambulance, business and general aviation services, local air ingress and egress. Air fare is less, landing at the south terminal means faster flight and time to downtown Vancouver, easier and faster access It allows us to travel efficiently to Vancouver, where our head office is located. Less transportation costs associated with using own vehicle, less fuel, less ware and tear on the vehicle They get in and out with little problems Less expensive and/or time consuming than other modes of transportation to business seminar on an individual person level Much less cancelled flights. TRA is very close to my business therefore reducing out of the business time Time and travel Better than flying out of Castlegar, free parking, flights are cheaper A signficant savings both in cost and time The small regional airport means less time in lines, it is closer to my place of business than Castlegar, long term parking is free and the Pacific Coastal staff are so friendly! We do not have to drive to Castlegar Competitive Air service drives down Air Canada and Pacific Coastal costs. Reliability and schedule results in less time out of office Currently rates are somewhat comparative to Air Canada, but with lack of competition for air carrier services prompts Air Canada to raise rates. We have seen their on two occasions in the last decade. Closer to our place of business and better, more reliable service from this airport as opposed to "Cancelgar" Short transport from the Airport to our business, very convenient flight times.

108 A significant number (68%) of Employer Survey respondents expressed that they were “very satisfied” with their use of the Trail Regional Airport and 26% were satisfied. Only 3% of employers indicated that they were very dissatisfied.

Figure 12-12 Employer Satisfaction Levels

REFLECTING ON YOUR ORGANIZATION'S USE OF THE TRAIL REGIONAL AIRPORT, HOW WOULD YOU RATE YOUR OVERALL SATISFACTION? 3.2% 0.0% 3.2% Very satisfied

Satisfied

25.8% Neutral

Dissatisfied 67.7% Very dissatisfied

The vast majority (87%) of Employer Survey respondents indicated that they “definitely will” use Trail Regional Airport in the future and only 7% indicated that they “very probably will not” use the airport in the future.

Figure 12-13 Employer Future Intentions

REFLECTING ON YOUR ORGANIZATIONS USE OF THE TRAIL REGIONAL AIRPORT, WHAT IS THE LIKELIHOOD OF YOUR ORGANIZATION USING TRAIL REGIONAL AIRPORT IN THE FUTURE?

3.2%0.0%6.5% 3.2% Definitely will

Very probable

Possibly

Probably not

87.1% Very probably not

109

The vast majority (84%) of Employer Survey respondents indicated that they “definitely have” recommended the use of Trail Regional Airport to others and only 7% indicated that they “will definitely not” recommend the use the airport to others.

Figure 12-14 Likelihood of Recommending Airport

REFLECTING ON YOUR ORGANIZATION'S EXPERIENCE USING THE TRAIL REGIONAL AIRPORT, WHAT IS THE LIKELIHOOD OF YOU RECOMMENDING THE USE OF TRAIL AIRPORT TO OTHERS? 6.5% 3.2%0.0%

6.5% Definitely have

Very probable will

Possibly will

Probably not 83.9% Definitely not

110

13 APPENDIX D – TRAVELLER SURVEY As part of the research for the Trail Regional Airport Economic Impact Assessment Study an on-line confidential survey of Travellers was conduced during the period June 23 to July 25, 20120. During that period the on-line survey collected 199 responses. The survey methodology constituted a convenience sample due to project scope and financial resources. Summary information is provided in the figures on the following pages and commentary and analysis on the research findings are provided in the main body of this report.

The Traveller Survey responses indicated that the vast majority (83%) of outbound trips using the Trail Regional Airport originated in the Greater Trail Area. Nevertheless, Trail Regional Airport was able to attract customers whose trip outbound originated in Castlegar, Nelson and Other locations. Figure 13-1 Origin of Outbound Trip

WHERE DID YOUR MOST RECENT OUTBOUND TRIP USING TRAIL REGIONAL AIRPORT ORIGINATE? 9.3% 5.7% 0.0% 2.1% Castlegar Grand Forks and Area Greater Trail Area Nelson Area 83.0% Other Locations

The Traveller Survey responses indicated that the majority (76%) of inbound trips using the Trail Regional Airport originated in the Lower Mainland. Nevertheless, Trail Regional Airport was able to attract customers whose inbound trip originated in Vancouver Island and various other locations.

Figure 13-2 Origin of Inbound Trip

3.6% WHERE DID YOUR MOST RECENT INBOUND TRIP USING TRAIL REGIONAL AIRPORT ORIGINATE? 2.6% 3.1% Lower Mainland Vancouver Island 14.4% Other Region of British Columbia 76.3% Other Region of Canada

Other Location

111 Survey respondents completing the Travellers survey indicated a wide variety is primary trip purposes that used the Trail Regional Airport. “Visiting Friends and Family” (36%), a “Mix of Business and Pleasure” (26%) and “Business” (19%) were the dominant trip purposes. Vacation and pleasures purposes for a trip using the Trail Regional Airport ranked relatively low in terms of survey respondents answers regarding the purpose of their trip. Figure 13-3 Purpose of Using Trail Airport

FOR WHAT PURPOSE DID YOU USE THE TRAIL REGIONAL AIRPORT ON YOUR MOST RECENT TRIP? 7.2%

18.6% Business only Mix of business and pleasure 36.1% Vacation/pleasure purpose 25.8% Visiting friends and family Other 12.4%

Traveller Survey respondents indicated that 12% of the respondents used the Trail Regional Airport more than 6 times per year. The survey responses indicated that only 5% did not use the Trail Airport. Travellers most frequently used the airport “One to Two” ( 39%) times per year, or “Three to Four” (34%) times per year.

Figure 13-4 Frequency of Use

HOW OFTEN DO YOU USE THE TRAIL REGIONAL AIRPORT? TIMES PER YEAR (AVERAGE) 4.6%

12.2% Do not use One or Two (1 or 2) 10.7% 38.6% Three to Four (3 to 4) Five to Six (5 to 6) More than Six (> 6) 34.0%

112 The majority (63%) of Traveller Survey respondents indicated that they purchase their airline ticket that requires the use of the Trail Regional Airport “One to Four Weeks” in advance, while 16% make their ticket purchase less than a week in advance of their travel.

Figure 13-5 Ticket Booking Timeframe

HOW FAR IN ADVANCE DID YOU BOOK YOUR MOST RECENT AIRLINE TICKET THAT REQUIRES THE USE OF THE TRAIL REGIONAL AIRPORT? 4.2%

16.8% Day of travel 15.8% Less than a week

One to 4 weeks

63.2% More than 4 weeks

Traveller Survey respondents indicated a wide ranging response to the day of the week their most recent flight using Trail Regional Airport was last completed. Tuesdays and Fridays were the most popular days and Saturday the least frequently cited day of travel. Figure 13-6 Day of Week

WHAT DAY OF THE WEEK WAS YOUR MOST RECENT FLIGHT USING THE TRAIL REGIONAL AIRPORT?

8.5% 12.7% Sunday Monday 20.1% 12.2% Tuesday Wednesday 16.9% Thursday 20.1% Friday 9.5% Saturday

113 When Travellers were asked “How would your most recent trip been affected if the Trail Regional Airport were not available to you?” a significant number (49%) indicated that they would have flown to another airport, 38% indicated that they would have travelled by another mode, 10% indicated that they would not have travelled to the Greater Trail Area and 3% indicated that they would have visited another destination in the region. Figure 13-7 Impact on Travel if Trail Airport Not Available

HOW WOULD YOUR MOST RECENT TRIP HAVE BEEN AFFECTED IF THE TRAIL REGIONAL AIRPORT WERE NOT AVAILABLE TO YOU? 3.2%

I would have flown to another airport. 9.5%

I would have traveled by another mode (private vehicle, bus) 48.9% I would not have traveled to the Greater 38.4% Trail Area

I would have visited another destination in the region

Traveller Survey respondents indicated approximately that destinations served by airlines (57%), cost of air travel (52%) and frequency of air service (49%) was very important in determining their organizations use of the Trail Regional Airport. Figure 13-8 Importance of Factors Impacting Use

IN DETERMINING YOUR USE OF TRAIL REGIONAL AIRPORT HOW IMPORTANT ARE THE FOLLOWING FACTORS 250 Very important 200 150 Important 100 Neither important of 50 unimportant 0 Unimportant

Very unimportant Cost of Cost parking of groundof n (taxi, car (taxi, n Availability air serviceair transportatio Frequencyof

114 Traveller Survey respondents indicated some interesting responses to the number of nights they stayed in the Greater Trail area on their most recent trip. A significant number (35%) indicated that they stayed no nights in the area, and 32% indicated that they spent “More than Ten”, while a significant number 25% of customers indicated that they stayed between “One and Five” nights. Given the low number of Traveller Survey respondents who indicated that they used the Trail Regional Airport for “Vacation/Pleasure Purposes” this suggests that iterant workers may account for a significant portion of longer term overnight stays. Figure 13-9 Nights in Great Trial Area

NIGHTS IN THE GREATER TRAIL AREA ON YOUR MOST RECENT TRIP

None (0) 31.8% 35.1% One to Five (1 to 5)

Six to Ten (6 to 10) 7.8% More than Ten (>10) 25.3%

A significant number (26%) of Traveller Survey respondents indicated that the number of nights they stayed outside the Greater Trail area on their most recent trip was none. However, “One to Five” nights away from the Greater Trail area accounted for 48% of the trips; while 12% accounted for longer-term stays in locations outside of the Greater Trail area. Figure 13-10 Nights in Other Locations

NIGHTS IN THE OTHER LOCATIONS OTHER THAN THE GREATER TRAIL AREA ON YOUR MOST RECENT TRIP

11.5% None (0) 25.9% One to Five (1 to 5) 14.9%

Six to Ten (6 to 10)

More than Ten (>10) 47.7%

115 Traveller Survey respondents indicated that “Transportation”, “Accommodation”, “Other”, “Shopping” and “Food and Beverage” expenses were generally under $50 per day. Figure 13-11 Estimate of Spending in Greater Trail Area

PLEASE ESTIMATE THE DOLLAR AMOUNT YOU SPENT IN THE GREATER TRAIL AREA, EXCLUDING THE COST OF THE AIRLINE TICKET. AVERAGE EXPENDITURE PER DAY 140 120 $0 to $50 100 $51 to $100 80 60 $101 to $150 40 20 $151 to $200 0 More than AccommodationFood & beverageTransportation Shopping (car rental, fuel, parking,Other taxi) $200

A significant number (76%) of Traveller Survey respondents expressed that they were “very satisfied” with their use of the Trail Regional Airport and 21% were satisfied. Less than 1% of Travellers indicated that they were very dissatisfied. Figure 13-12 Customer Satisfaction

REFLECTING ON YOUR MOST RECENT EXPERIENCE USING THE TRAIL REGIONAL AIRPORT, HOW WOULD YOU RATE YOUR OVERALL SATISFACTION? 2.1% 0.5% 0.5%

Very satisfied 20.5% Satisfied

Neutral

76.3% Dissatisfied

Very dissatisfied

116 The vast majority (88%) of Travellers Survey respondents indicated that they “definitely will” use Trail Regional Airport in the future and only 2% indicated that they “very probably will not” use the airport in the future.

Figure 13-13 Future Use

REFLECTING ON YOUR MOST RECENT EXPERIENCE USING THE TRAIL REGIONAL AIRPORT, WHAT IS THE LIKELIHOOD OF YOU USING TRAIL REGIONAL AIRPORT IN THE FUTURE? 1.6% 2.1%7.4% 0.5%

Definitely will

Very probable

Possibly

Probably not 88.4% Very probably not

The vast majority (89%) of Traveller Survey respondents indicated that they “definitely have” recommended the use of Trail Regional Airport to others and only 2% indicated that they “will definitely not” recommend the use the airport to others. Figure 13-14 Likelihood of Recommending Airport

REFLECTING ON YOUR MOST RECENT EXPERIENCE USING THE TRAIL REGIONAL AIRPORT, WHAT IS THE LIKELIHOOD OF YOU RECOMMENDING THE USE OF TRAIL AIRPORT TO OTHERS? 1.6% 1.6%6.7%1.0%

Definitely have

Very probable will

Possibly will

Probably not

89.1% Definitely not

117 Comments received include the following remarks: I live in Trail, so questions on my visits to greater Trail were not answered This is a very great way for people to get in and out of our community. It is very reliable and I have had friends and family come to visit and can count on the actual time of arrival. Love this airport, wish Trail had better taxi service,I t's so easy, in and out, great service from Pacific coastal. I sometimes use it for Trail stays(in the winter)Nelson and beyond for the summer months. I live in N.Van. I live in the Greater Trail area. The washrooms in the terminal always seem to be "out of order"...that is very inconvenient considering there is not a washroom on board!! I haven't used the Trail Regional Airport in the past few years. If the planes flew to/from Abbotsford and Calgary I would not hesitate to use it 3-6 times per year. 1. Surely you know that soliciting responses via ads will not result in a random sample, therefore results of this survey can in no way be seen as representative. Your results are not valid.2. While advertised in Trail media, which mostly locals read, the actual questionnaire seems focused on tourists to this area rather than locals. I'm a resident. Who is your target? This is an incredibly badly designed study and questionnaire, for which I can't believe you're being paid. Ladies and gentlemen, you need to review your college notes on attitude measurement, survey design, evaluation, and statistics. This service is terrific! It is great to have an option other than Castlegar which is decidedly unreliable and, with Air Canada as the only service provider there, far too costly. Ideally, the West Kootenay would only have one full competitive service Airport because of the region's relatively small population, but geography/reliability challenges at Castlgar makes the case for enhanced service at Trail (including a new small terminal) very compelling! This is a great service...I hope it stays and continues to grow. I will definitely continue to use it and recommend it as the preferred way to travel by air to the West Kootenays! If we did not have the service of Pacific Coastal and the ability to fly into Trail our trips would be far less. In fact, the number of trips, for our family, to Trail within the year have and will continue to increase due to this service. The importance of keeping the costs reasonable and no security is a drawing card and helps make our decision to fly rather than drive or not visit at all. We love this option. Thank you. #9, 10, 11 are not applicable for someone who lives in the area It's the most reliable service in the area and very user friendly. Reliable service means a lot here. Only wish is that more destinations were available. e.g. Kelowna. MORE DESTINATIONS ,KELOWNA ,CALGARY I live in the Greater Trail area and therefore have not responded to questions 9 and 11. My most recent trip to the Lower Mainland was for medical reasons. I also travel from the Trail Airport to visit friends and family in the Lower Mainland. The physical limitations of the Trail airport building are obvious, however, I appreciate the excellent, friendly, personal service I receive there. I also like landing at the smaller South Terminal in Vancouver away from the hustle & bustle and confusion of the International Terminal. It would be beneficial to have air service between Trail & Kelowna particularly for the increasing numbers of people needing to travel from Trail to Kelowna for medical appointments and treatment. Would like to see service expanded to Kelowna and Calgary. Questions 9 and 11 do not work for Trail residents :) I like the reliability/dependability of Trail Regional Airport in the winter as to mega cancelled flights at Castlegar Airport and delay in appointments, connecting flights etc by the Castlegar Airport as to darn good reliability at Trail Airport. this survey seems slanted towards visitors to Trail.

I live in Trail and use the airport to travel elsewhere Trail needs this airport to help us in any way it can. We are already struggling enough. Much more likely to land than flying into Castlegar. I like Pacific Coastal attitude and caring they show to the passengers. Would like to see flights to Kelowna BC for Medical reasons and also to Calgary, Alta. I have absolutely no need to use the Trail airport. I do not see it as a Regional airport and as

118 such I see this survey as misleading. The City of Trail should stop wasting taxpayers' money by trying to justify a second regional airport in the West Kootenays that at the end of the day, service the needs only of the Trail residents and not of those in the West Kootenays. Cannot answer question 11 because I live in the Greater Trail area. I live in Trail. YZZ airport is the most convenient option when travelling to Vancouver to visit family. This coming August I am travelling a round trip (to visit family in Toronto) from Trail to YVR then connecting from YVR to YYZ and then returning along the same lines. I found that it was cheaper and more convenient for me to fly out from Trail, instead of driving to Castlegar to get a connecting flight to Toronto. Question 7: I don't drive; I'm at the mercy of the transportation providers: I'd take the Greyhound bus overnight if it was still available, Question 8: Frequency/Cost/Destinations: None of the options seemed appropriate; What we have now with PCA (who I am very happy with and wouldn't want to lose) works for me. Questions 9/10/11: I live in the Trail area (Warfield). For elderly people needing to get to the lower mainland for medical treatment, the full days drive/ride to and from the l. mainland is too tiring; some elderly people no longer have a valid driver's licence to even drive to another airport in the interior. Planes that cannot land in Castlegar due to poor weather quite often can land in Trail. Region needs to further develop Trail Airport and associated aviation services. Very important that the Trail airport stays open Questions 9 to 11 do not apply; I live in Trail. Love the service and would be better served if we also had a Kelowna destination I live & work in Trail. The Trail Regional Airport (Pacific Coastal) is an important link to Vancouver. It would be great it offered flights to Kelowna and Cranbrook too.I would use these. I use the Trail Regional Airport as it is more convenient, and more reliable than Cancelgar... Since I live here in Trail, a couple of the questions didn't really apply, but I think our airport is the greatest--the staff are helpful (with people who are limited in mobility), caring and responsive. I would just like to see the service expand so that we can fly to other centres from the Tail Airport. I didn't answer Questions 9,10,11 because I am a Greater Trail resident. As I live in the Trail area, some of the questions were n/a 1. Would like to see a flight to Kelowna.

2. Required a medivac flight to Kelowna for emergency surgery. The resulting surgery saved the loss of one of my legs. Thanks for the use of Trail Regional Airport. live in Trail and would be very upset if the Trail

airport did not run. would like to see a flight direct to Calgary Best thing to happen to this area - an airline service Questions 9, 10 & 11 don't apply as I live in Trail.

Re question # 7, if the Trail Airport didn't exist I would reluctantly fly from Castlegar. Great airline & affordable. I am extremely satisfied and would love to see other destinations added . Great operation. Hope they can get the equipment and runway funding they need to continue their excellent service. It is a quick, no hassle airport and that's the best part and why we use it. Great Airport, Right Price! Trail Regional Airport is a great improvement over using the Castlegar Airport. Trail must lengthen the runway and build a new depot if they wish to move forward. Trail is fortunate that they have a group of dedicated volunters to run the airport. I think the airport may fail if the operating crew became paid unionized employees. This is the best thing to happen to this area in about 50 years. It should have been the airport in the '50's and we wouldn't have this mess now. I'm not a frequent user but I really like the friendly informality of Trail airport and have always been completely satisfied with the service I've received. As I live in the area, I have left some of these blank because they don't really apply. An option

119 of 'N/A' would have been useful in this case. I live in Trail. Medical is a common reason to use the airport, which I did in April, down and back on the same day. To date, when going on vacation, I fly out of Spokane ( Did Spokane, London, Croatia in March). Choosing Trail would be a cost factor. I didn't answer no. 11because I live here The Trail airport is a key location for travellers in our area. Planes almost always land there and never land in Castlegar and Pacific Coastal is an awesome airline with great staff! Please support the current and future growth of this very important community infrastructure. It has enabled me to take a short term job travelling home on wknds from Vancouver and the later night flights in summer are fantastic! We NEED the Trail airport! Thanks for your future investment! ! In my opinion air service from the Trail Regional Airport is a must. Without it we woud not see family and friends as frequently. And more importantly its reliablilty and ease of service has becoming a necessity for medical purposes; both for the patient and supporting family members. This area has an aging population and travel becomes a major concern for many people who are sent to the coast for medical reasons. I fully support the expansion of the Trail Airport and would welcome service to Kelowna and Calgary as well. The airport makes it easier to come to Trail and area frequently, to ski, visit the lakes, see family, etc. Without the Trail airport I would not come as frequently because the Castlegsr airport is more expensive and much less convenient Tough survery to answer if a) you live in the Trail region and b) you fly a private plane as well. I live here and travel to Edmonton . Several times a year . It is for work and to visit family . Rising costs of travel (gas) is making me to think of moving to Edmonton , But if we had sevice to AB with reasonable pricing I may consider staying here . I'd use the Trail Regional Airport several times a year, if they offered direct flights to Calgary, Kelowna or Kamloops. If it weren't for the Trail Airport and the Pacific Coastal service, visits to my family would be difficult at best. As it stands, I can be at their homes within 3 to 4 hours. That is just like Mastercard - priceless. I live in Trail and use the Trail Regional Airport all the time that I travel to Vancouver.

I would like to see flights going to Kelowna in which I would use to visit friends etc. It would be most beneficial if there were flight to and from Kelowna. I would then use the Trail Airport. I usually travel round trip to Ontario a couple of times a year and find the cancellations at the Castlegar airport most frustrating. Flights from Vancouver to Castlegar are also frequently cancelled and one has to wait until the afternoon or the next day. If we could fly to Kelowna, then pick up a flight from there to Ontario, how sweet that would be. This is a great resource for the area. It is a very friendly airport and has a much better chance to flying out in the winter (and coming home!) Reliability and convenience of service are the key factors for chosing the Trail Regional Airport. This airport is the most convenient way I have ever found to travel into the West Kootenays I tend to use the Trail airport when travelling just to Vancouver. The success rate of landing in bad weather is important.

I live in the trail area so not all the questions were relevant eastern destinations(calgary) a must It would be very beneficial if there was an additional service added to Kelowna. I personally know many people that would use that service for work - both in Fortis and IHA. One of the prime attractions of using Trail airport is the ability to arrive close to departure time and get right on the plane Excellent Service. Great Airport facility. Super Staff! I would like to see more destinations. Calgary,Edmonton, Kelowna, Spokane, and Victoria if possible Trail has a nice little airport with good volunteers, but I don't very often want to fly to Vancouver, so I've never used the airport. I wish that there were more flights to other places; then I would use the airport.

120 Would be nice to have a flight to Kelowna for hospital/medical visits. The flights in and out of the Trail airport far exceed the amount that are able to get into it's rival airport at Castlegar & reliability is of utmost in this region. The staff are also a lot more courteous in Trail, and the parking is free which is a big bonus. It would really by great if Pacific Coastal could work with WestJet to get service to Calgary and eastern airports. Need more destinations out of Trail airport. Easier getting in and out of this airport. Wonderful Great airport. Fast to get in and out of. Hopefully westjet will come to Castlegar. Trail airport is pointless and any improvements are useless and will not be cost effective. The Trail Airport is far more reliable in terms of flights to and from our area with very friendly, helpful staff than any other airports in our area. Increased flights (if req'd) to more locations along with airport improvements should be a local priority. I live in the Greater Trail area so some of these questions don't apply (11 & 9) As we live in Greater Trail, a couple of questions were answered as none, involving monies spent in the area. I live in Trail - born in Columbia Gardens, am retired businessman and do not use the airlines as I did then, but I wish Columbia Gardens was in operation years ago. We live in Rossland so questions 9-11 are not relevant. Trail is the most reliable airport in the region. We cannot depend on Air Canada in this area. We need flights to Kelowna, Ft Mcmurray and maybe Calgarytoo. PC saves me time & money. I wish air travel was this easy everywhere. Fantastic service needed for the area For me and my colleagues/friends, Trail Regional is very important to us. I really like the Trail Regional Airport - even if they have to add security it will still be convenient, quick and the small Trail terminal, as well as the Southern Terminal at YVR makes it nice and easy for the elderly, young people traveling alone and for people with disabilities as the larger part of YVR can be overwhelming and intimidating. It seems that the flights land more at the Trail Airport than in Castlegar. My whole family hopes to be able to continue to use this airport and that things stay the same and we support this airport and Pacific Coastal airlines to continue to service not only Greater Trail but surrounding areas as well. #11 I live here in the Greater Trail area where I spend a total of about $100 a day on my food, accommodation and travel and other things. Great, great little airport! PC has been an option for myself and family members when weather, (especially in the winter) causes cancelled flights or when on standby on Air Canada doesn't work out in Castlegar. The staff have ALWAYS been EXTREMELY helpful and very professional! Being able to just pick up the phone and call directly down to our little airport and speak to a REAL person is absolutely invaluable. If they have not been able to address my questions at the time, then a returned call has always been made in timely fashion. The webcam is extremely !

Some further thoughts, then, if I could add my voice to this :

1. PEOPLE (well trained, flexible and that can multitask!) are the key to a small airport. I have noticed some "younger ones" working there lately. Need to remember that recruiting younger people to volunteer is important as, like everywhere else, aging happens and replacements are needed.

2. Airports need to be realistic about growth opportunities and the need for additional capacity. We are past the time where ‘build it and they will come’ is an appropriate strategy. Air carriers must be more efficient and competitive to survive today. Yes, they need to work more closely to match service with demand but cutting operating costs should be sought from sources other than in aviation. Who are the businesses/organizations that are using PC frequently? Chip in, guys!

121 3. How dependent is medevac on PC? How about others: eg. forestry or bringing in fire fighting crews? These are VITAL services in our local community and someone's life (health and safety) is more important than economic growth!

4. Too many regulations! PC is in Trail and is unique and so what regulatory necessities exist elsewhere should not pertain to us.

5. Pacific Coastal offers lower fares, free parking, no airport fees. It is an option to cancelled flights in Castlegar especially in the winter and that is a HUGE factor to keeping this independent business going! Pacific Coastal Airline does a great job and are very customer oriented. I am a local resident of greater Trail. I do not use the Trail Regional airport. When I fly any where I fly out of Castlegar on Air Canada-Jazz and will continue to do so. Pacific Coastal's excellent service has made the Trail Airport very attractive even though we live 90 miles away. Will never fly from Castlegar again. I AM A ROSSLAND RESIDENT AND USING THE SOUTH TERMINAL AND TRAIL REMOVES 90%OF THE HASSLE OF AIR TRAVEL The. Service from. PAcific Coastal is great! I am using this airport for the time being but, in two more years I will no longer need to travel back and forth for work.

I prefer to fly with a direct carrier when going on from YVR, which I do about six times a year. Although the walkways & building are greatly in need of updating, the employee attitude & customer service provided is far more superior than any provided by Air Canada ANYWHERE! This airport serves as a vital link to the Greater Trail area. It makes travel possible for seniors who would not otherwise be able to travel. It provides a much easier mode of travel for so very many people. Use this wonderful airport to promote the area and as an economic catalyst for the future. Simple, easy, efficient airport with nice workers and volunteers Great service just need a new terminal Would like to see flights to Calgary, Edmonton, Kelowna etc. Using the airport to travel to Vancouver is great. It would be wonderful to be able to use it to get to Edmonton, too. Extremely important we have this service in Trail, as reliability of Jazz/Air Canada not very good. Questions 9 - 11 are not geared to residents of Greater Trail and there is no 'opt-out' for these questions. i.e. If you live in Greater Trail, move on to next question. I am concerned about the greater Trail taxpayer that these improvements that are being discussed are being done just to be better than Castlegar not improving the economy of the area I have yet to hear any one say they are moving to Trail because of the airport if there is such a person or industry please let us know. I think it is very important to our community to have the Trail Regional airport. We have used it for travel, for business and to bring family to us. It is our #1 choice over Castlegar anyday. i love the Trail regional airport - it is very convenient and Pacific Coastal does an absolutely amazing job at getting flights in and out of here. So do the volunteers at the airport The availability of a competitive alternative to the services provided by Castlegar airport saves all residents of the RDKB travel dollars. Further, the reliability of air service at the trail Air port increases the likely hood that other companies and businesses will move into the area. I LOVE the Trail airport! I wish there was service to Calgary. Can you please add ROSSLAND BC in your survey? We are not greater Trail and we have many guests fly in from Vancouver or via a connection in Vancouver to stay in Rossland and ski at RED Mountain Resort I live in Castlegar and fly Pacific Coastal whenever possible. For business and pleasure combined, I fly round trip to Vancouver 12-14 times per year. The survey is not well designed to understand the importance of this airport for our travel needs

122 in the west kootenays. I travel to Vancouver and for pleasure - the Trail regional airport has ensured I make my meetings or my connecting flights. The value based on the reliability of this airport compared to the alternative cannot be

underestimated. Years ago I use to pay upwards of $800 round trip to Vancouver. This service has ensured we get reliable quality travel at a fraction of this cost - and twice the certainty of travel. I'm sure you will find from an employer perspective the Trail Regional airport has made a significant difference to their ability to conduct business from the west kootenays and also attract and retain employees. Also if possible Pleas try and measure the value from a resident's perspective as well. As 1 resident that has flown out of the west kootenays for 3 decades I can't stress how important this airport and current service is to our this area. I live in Rossland and typically use the Trail airport to travel to Vancouver and/or Victoria for business and pleasure. It's awesome to have this service and I believe it keeps area air costs down as well. This survey a bit difficult - I live in Greater Trail so nights and costs not logical to answer My husband and I live in Trail and we can't say enough about how much we appreciate PACIFIC COASTAL. So impresssed by the excellent, friendly, helpful employees and ease of check-in. I have already recommended Trail's airport to a number of friends and family, and will continue do so. Would like to see the airline extend their list of connecting airports to perhaps include Kelowna or even Cranbrook. Connections from THOSE airports to Calgary, for example, would make travel much easier for those of us needing to travel there for business, medical reasons or even simply just to visit family. The flights out of Trail Regional Airport are consistently much more reliable than those of Air Canada out of Castlegar, (notorious for their cancellations); the staff at Trail's airport have always been courteous, helpful and to find out that the majority of them are volunteers just amazed me. Any improvements/additions being considered for this airport would be money well spent!! I am a resident of the Greater Trail Area. I have to travel due to business and find Trail is more reliable in the Winter months than Castlegar. Need an outgoing eastern flight option/connection I am from the Greater Trail Area. the reliability of the airport, flexability of the carrier, accommodation of staff, fast on-off flight, parking cost are some of the reasons I fly with Pacific Coastal out of Trail. Competition is good for Air travel.

123 14 APPENDIX E – ORGANIZATIONS CONTACTED A number of organizations and individuals made available their expertise and time in support of this project. The Consulting team wishes to express its appreciation to the following organizations that responded to our e-mail message, telephone calls, and/or participated in-person discussions. In addition, we wish to acknowledge and thank the numerous travellers and employers and media organizations that either shared information about, or completed a user survey. To each individual and organization thanks for taking the time to share your insights with the project team.

List of Organizations Contacted Lower Columbia Community Development 44 Field engineer Squadron Team 531 Trail Air Cadets Mercer International Air Canada Jazz & Air Canada Michael Geller's Blog BC Building Trades Nelson & District Chamber of Commerce BC Forest Service, Wildfire Protection Branch Nelson Star Best Western Plus Columbia River Hotel Pacific Coastal Airlines Boundary Country Regional Chamber of Commerce PractiCar Car & Truck Rental Brilliant Resources/ Sequoia Fuels Queen City Shuttle & Charters British Columbia Ambulance Service Red Baron Aircraft Services Budget Car & Truck Rental Red Mountain Ski Resort Castlegar Chamber of Commerce Rossland Chamber of Commerce Castlegar News Rossland News Central Mountain Air/Northern Thunderbird Rossland Telegraph Columbia Hydro Contractors Selkirk College Community Futures Boundary Selkirk College Aviation Program Community Futures Development Corp. SNC-Lavalin Creston Chamber of Commerce Spokane International Airport Creston Valley Advance Sweetfield Shuttle Dr. Michael Buna Teck Metals Ltd Grand Forks Gazette The Castlegar Source High Alpine Air Service Inc. Trail & District Chamber of Commerce Highland Helicopters Trail Daily Times KBS - Astral Radio Trail Flying Club Kootenay Boundary Regional Fire Rescue Trail Regional Airport Kootenay Lakes Aviation United Food & Commercial Workers Kootenay Savings Credit Union United Steelworkers Local 480 Labourers Union 1611 West Kootenay Regional Airport

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Wave Point Consulting Ltd.

Darryl Anderson, MBA Managing Director

1321 Blanshard Street Suite 301 Victoria, BC V8W 0B6 www.wavepointconsulting.ca

E: [email protected] T: 778--410-5031 C: 250-812-5982

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