Speaking as a history buff, why is 2024 such a notable year for the aviation industry?
There have been huge changes in our industry over the last 30-40 years, but they have been mostly incremental and focussed on improving our existing model as opposed to undergoing real transformational change. However, the next 10 to 30 years are poised to be quite pivotal for our industry.
When viewed from the perspective of 2020 or 2021, 2024 certainly puts us in a great place. I wouldn't be surprised if 2024 or 2025 becomes the inflection point. Major forces such as climate, technology and AI, geopolitical events, changing economics and inflationary pressures, and labor market changes are significantly impacting our industry. These do present challenges, but they also offer some of the most exciting opportunities.
Vancouver International Airport hosted around 7.1 million passengers last summer. Do you expect this traveller demand to continue rising or will it level out at some point?
Travel demand is at an all-time high. Our passenger volumes from 2022 to 2023 increased by over 30%, which is significant, driven partly by recovery from the pandemic and partly by a growing desire to travel. While I do not think it can grow at 30% year on year indefinitely, the demand has surprised many in the industry, including myself, in its resilience.
Your annual report highlighted growing cargo volumes, at the same time that other U.S. West Coast airports' cargo volumes were shrinking. Why is this happening?
Our cargo volumes are very high, and part of that growth is a reflection of YVR taking more business away from ports along the U.S. Pacific coast. We have been investing in cargo operations, and our ability for throughput and connectivity surpasses some U.S. markets. Recent trade tariffs on goods coming into the U.S. have pushed cargo volumes to other countries, including Canada. This demonstrates the macro changes driving growth and yield opportunities for our business.
Aviation is a capital-intensive industry. While airlines have mobile capital, airports do not, requiring long-term infrastructure investments that are flexible enough to adapt to these macro changes. Technology plays a crucial role in this flexibility, enabling greater utilization and efficiency through AI, data, sensors, and planning.
Ageing infrastructure is a challenge for many airports. Given that Vancouver International Airport is the largest building in British Columbia, how do you plan to modernize it?
Our goal is to be net zero by 2030, and we are the first airport in North America to set such a goal, with a detailed plan to decarbonize our footprint. This includes window glazing, LED lighting, geo-exchange energy systems, and battery storage for peak and off-peak energy needs. We also created a digital twin, a full real-time digital replica of our airport, which allows us to use AI and data for efficient operations.
We partnered with a Canadian startup to deploy sensors that monitor heating and cooling needs in small, specific areas. Tech firm Poppy was engaged in the work, through projects undertaken in partnership with our long-time construction firm Ainsworth. Installation of the devices allows us to make real-time adjustments to our HVAC controls, improving sustainability and efficiency. By saving energy, we also save money, which can then be invested in passenger improvements and innovation.
As part of the 13 new routes in 2023, you launched Western Canada’s first nonstop service to the United Arab Emirates. How has this expansion impacted growth?
Over many years YVR conserved land to protect the option of adding a third runway, which in turn constrained our ability to entertain different types and forms of expansion. By leveraging technology for more efficient utilization, we've improved our capacity; now we can welcome more cargo freighters and diversify our routes, adding new services to Asia, Singapore, Taiwan, Hong Kong, Korea, Japan, Bangkok, and India.
Our new route to Dubai offers access to growing markets in the Middle East and Asia, connecting to Emirates' network of 300 locations. This route is a game changer for us, providing greater connectivity and opportunities. Similarly, our route to Istanbul offers excellent cargo opportunities due to the belly cargo on these flights.
Have geopolitical events in 2024 forced you to reassess your routes, collaborations, and partnerships?
Absolutely. Before the pandemic, YVR had more flights to and from China than any other North American airport. However, diplomatic tensions and geopolitical changes have reduced these flights significantly. Commercial aviation is governed by nation-to-nation treaties, and recent changes like this have resulted in stricter adherence to these treaties. This is limiting the number of reciprocal flights between our two countries.
While this shift was initially challenging, a longer-term outcome has seen us diversify our routes and improve connectivity to other places in Asia. We are now focussed on new markets like Vietnam and Indonesia, which will provide broader geographic connectivity and business opportunities.
Like many other industries, aviation is grappling with a severe workforce shortage. What are the most necessary jobs to keep the sector running in 2024?
Our industry is truly a team sport, with interdependent roles such as air traffic controllers, pilots, AI and machine learning experts, and safety personnel. We need people who understand data platforms, as aviation systems – which have historically been closed – now offer access to information that enables passenger choice. Now, with more data than ever existing outside these systems, connecting and analyzing this data is crucial.
Roles in aviation safety, fire and rescue, and security are also in high demand. While technology like facial recognition and e-gates is advancing, we still need personnel to monitor and manage these systems. Experts in sustainable supply chains and energy are also essential for our future operations and growth.
Can you tell us about your exciting new partnership with Airbus this year?
Aviation is a fossil fuel-driven industry, and while airports can decarbonize buildings and ground operations, aircraft need sustainable solutions. We are working on increasing sustainable aviation fuel (SAF) supply with the province of British Columbia. SAF, which can be blended with conventional fuel, offers significant emission reductions without requiring aircraft changes, but it faces economic and scalability issues.
Airbus is exploring hydrogen-fuelled aircraft, which promise zero emissions. We've partnered with them and California firm ZeroAvia to study the planning, infrastructure, and distribution needs for hydrogen at major airports like YVR. This study will explore the potential for hydrogen fuel in aviation, and support a two way flow of information. As we learn, we will be contributing to the planning that needs to take place to prepare us all for a future that includes sustainable aircraft.
