ADM Aéroports de Montréal (is a not-for-profit, non-share capital corporation responsible for the development of YUL Montréal-Trudeau International Airport and YMX International Aerocity of Mirabel. ADM has managed both airports since 1992 under a 60-year ground lease with the Government of Canada, now extended until 2072.
How did your background in academia lead you to this opportunity to join ADM last year?
I've been a professor in industrial engineering and my latest appointment was at McGill University; in all the universities I’ve worked at, I’ve been involved in major infrastructure developments. Making the switch to ADM feels natural despite not having direct aeronautics experience and it was the infrastructure aspect that attracted me to the position. I've managed billion-dollar projects and my management experience at the executive level made this role appealing.
Despite my academic background, I’ve been involved with ADM for several years as part of the Consultative Advisory Committee, which meets multiple times a year to discuss community issues and for the last three years, I was also on the board of directors and chaired the committee dealing with major infrastructure projects. Additionally, the current challenges at the airport, with numerous infrastructure needs, were a great opportunity to make a difference.
What are the major infrastructure pain points in 2024 that need modernizing?
There are two major pain points: access to the airport and the number of gates. Last year, due to fast airport growth, accessing the main terminal during peak hours could take 30 to 40 minutes because the capacity is 1,600 cars per hour, but we peaked at 2,500 to 2,700 cars. On the airside, all gates are occupied during certain periods, especially in the afternoon in summer, limiting our ability to increase destinations.
With the pressure to increase passenger numbers, we need to improve access and gate capacity. From May to September, traffic is especially heavy, with many travelers heading to Europe and Air Canada making Montreal a major hub. This brings in a lot of early-morning traffic from the United States and other parts of Canada. About 23% of passengers don't stay in Montreal but transfer to Europe, adding to the pressure. Improving gates and access is crucial to handle this growth.
Do you expect the growth in passenger numbers you have been experiencing to continue on an upward trajectory?
In 2015, we had about 15 million passengers, and just before COVID, we were nearing 21 million. After COVID, growth has been faster than expected. Montreal is now the fastest-growing major airport, and we expect to reach 22 million passengers this year. Our forecasts for 2028 predict 25 million passengers, and by 2035, we expect to reach 35 million. We operate under a lease with Transport Canada, obligating us to meet demand. Reducing passenger numbers would be unwise given the importance of this development to Montreal and Quebec.
Our race is against the volume of passengers, delivering the necessary infrastructure by the deadlines, and it’s all about ensuring fluidity and a high-level passenger experience. This is challenging due to the extensive infrastructure work in Quebec and a shortage of construction workers who are brought in by external contractors. We need to be creative in our construction methods to attract major contractors, and many are interested in innovative projects at the airport. T We need to make sure we have the human resources and entrepreneurs to deliver these projects. In parallel for the airport community, with over 40,000 people and 200 companies working at our airports, we also organized job fairs to help address hiring difficulties specifically for our partners. The first year, 1,000 people attended, the second year, 2,000, and this year, 6,000 people came. The job fairs were successful, likely due to the announcement of over four billion dollars in investments at the airport, attracting interest and enthusiasm for the whole sector.
ADM is unique in that it is a non-profit enterprise that doesn't receive government funding. What are the advantages and disadvantages of this model?
From a financial perspective, we operate under a uniquely Canadian system, financing ourselves through bonds since we can't get equity from private or pension funds. Our lease ends in 2072, creating challenges for long-term borrowing. We must pay back all debt by 2072, which means we need an extension to continue borrowing for future investments.
Currently, bonds are affordable at around 4%, cheaper than equity from pension plans, which could cost at least 9-10%. While attracting equity could reduce our debt and improve ratings in the future, we're focused on bonds for now. We're working with the government to extend our lease by 50 years to avoid the zero-debt requirement by 2072. This extension would allow continued borrowing and investments beyond 2045, ensuring long-term financial stability.
You were at COP28 recently announcing ADM’s roadmap initiatives to achieve net zero emissions by 2040. What does that entail?
Our roadmap focuses on our own emissions (Scope 1 and 2), not Scope 3, which includes aircraft emissions. Our current carbon emissions are around 9,000 tons a year, mainly from gas boilers. We're converting these to electricity, despite the high costs. Quebec's energy is mostly hydroelectric, making our emissions relatively low, but we aim to further reduce them. We're also aiming for high sustainability certifications in construction and using alternative renewable energy, such as photovoltaic panels, as well as converting our fleet of vehicles to electric, including parking shuttles.
For scope 3, we rely on innovations from aircraft manufacturers. We signed an agreement with Airbus for a feasibility study on hydrogen as an energy source for aeroplanes, aiming for hydrogen-powered planes by 2030-2040. Sustainable Aviation Fuel (SAF) is also in our future plans to address scope 3 emissions, which are significantly higher than our direct emissions. It's a concerted effort from airports and airlines; we don't want airlines to avoid Montreal due to a lack of sustainable options. With Air Canada accounting for 55% of our traffic, we work closely to meet their needs. We are also investing directly in an electric transit system that will reduce emissions from employees and passengers coming to and leaving the terminal. We are also providing electrical charging stations for ground support equipment on the apron.
