What is the plan?
The Gander International Airport Authority is proceeding to secure public financing to build a new terminal building. The new building is half the size of the airport’s current air terminal building. The construction of the new ATB will cost $35 million. The total project cost, including contingencies, is $40 million.
Why has the airport authority made this decision?
The airport needs a new terminal because it can no longer afford to occupy the current footprint. The terminal is vastly overbuilt for the airport’s current and future needs and the building systems have exceeded their useful service life. Energy expenses associated with the terminal building neared $900,000 in 2013. To put that into some context, the heating bill for Gander Airport’s terminal building is almost five times the cost incurred by similar Atlantic Canadian airports. These costs threaten the airport’s long term viability and must be addressed.
What goes into such a decision to move?
This year, Stantec Inc. was commissioned to produce a conceptual design and provide a Class C cost estimate for a new air terminal building. Expert opinion was carefully reviewed by the airport’s engineering team and board of directors, weighing the pros and cons and addressing such parameters as anticipated annualized savings, risk/liability associated with the current footprint, cost and capacity to finance a new project, usable lifespan and the alternatives, such as renovating the airport’s current ATB. The latter included a host of studies undertaken on that front.
There is also the matter of insulating the airport against risk – the risk of the forecast escalation in energy costs or that some major component of the building might fail.
At day’s end, Gander International Airport operates under business principles. A new ATB is, in our view, the best path forward to guarantee the airport’s long term future.
Is the airport downsizing? Other airports are expanding.
What could be interpreted as downsizing we prefer to call right-sizing – getting the airport a cost-efficient home to meet its current and projected future needs.
Passenger traffic at Gander has doubled over the last decade and we are forecasting continued growth. While the current ATB is vastly oversized, that space is in all the wrong places. The new AT, while half the size, will triple the current capacity in the critical arrivals and departures areas. It will also allow the airport to continue to service the all important business of international aviation.
By rightsizing our building, we’ll be able to maintain good jobs right here in Central Newfoundland and remain an important economic engine.
You need to improve the bottom line so you can stay in the current facility.
The airport authority has been able to grow its revenue and control expenses at or below inflation. It has made a profit each of the last 10 years and made long strides since the airport ran an estimated deficit of $5 million a year under Transport Canada. That improvement in performance did not come about easily – it came at great cost and required many difficult decisions.
We view growing revenue and managing operational expenses as independent of each other. Soaring revenues, for example, do not mean a business can be reckless or negligent about its cost structure.
Where’s the money for a new terminal coming from?
The GIAA is incapable of funding a new terminal from current and projected operating income solely on its own. Any new building will require public investment from both levels of government, as has happened across the country.
Why should we, as taxpayers, foot the bill for that?
The airport provides a sizeable economic contribution to the town, province and country. A 2013 Economic Impact Study undertaken by InterVISTAS demonstrated direct impacts of 1,260 full-time jobs, $90 million in wages, $140 million in gross domestic product (GDP) and $240 million in economic impact. Furthermore, 20% of the total labour force in the Town of Gander can be attributed to airport activity. YQX is also an important generator of taxation revenues to all levels of government. Total taxes paid on an annual basis, by passengers, employers, and employees at YQX, are estimated at $46 million per year, including $27 million to the federal government and $19 million to the provincial government.
A new terminal provides benefit both during the construction phase and in the form of retaining jobs in the future. Airports are also enabling infrastructure, they drive business, connect us with the global village and provide the essential links we require. Ensuring a robust, healthy transportation system is a priority of government at all levels.
Why can’t you just chop off the “new” sections and use the best parts of the current airport?
This was the initial option preferred by the airport authority. An independent team of engineers was brought in to have a thorough look at what this would involve. This was supplemented by a host of other studies regarding building systems, codes and compliance. Additionally, the airport assessed alternative energy systems – wind, geothermal, biomass, none of which held great promise for the current terminal or were too capital intensive.
There are also complications with changes to the National Building Code since the original part of the airport was opened in 1959, toxicity issues, problems with reconfiguring space for current demand and other substantial challenges.
When viewed against cost, risk and reward, renovating or remodeling the current ATB was not the best option. The modernization of the heating system alone would cost in the vicinity of $10 million and a proper redevelopment of the terminal approached the cost of a new building, with all of the challenges of an old building and none of the benefits of a new structure. There was too high a level of risk, coupled with the cost, for the airport to proceed with confidence.
But do you really need to do this?
Suffice to say, if the current footprint adequately served the airport and community’s needs, there would be no need to move. This is a decision based on need, not want or whim.
Where is the new terminal going to be located?
The new terminal will be located behind the current one, facing southward toward Gander Lake. The entry road will be reconfigured to accommodate passenger access.
So you are going to tear down the historic part of our airport? What about the international lounge?
All of the current airport, save for the outermost portion of the loading bridge we call “The Finger” will remain intact. The airport authority is hopeful that an adaptive re-use of the international lounge can be found, one that benefits the community or is complementary to aviation purposes. We will entertain all viable proposals for its reuse so long as they are cost neutral to the airport authority. The airport aims to move to a new ATB for expense reasons, so it would not make sense subsidize the old building.
What about the mural, sculptures, furniture, etc.?
There are no plans to move any of these artifacts to the new terminal and they will continue to occupy their current space.
But what about our built heritage and Gander’s historic legacy? Can you make it into a museum?
We understand and share people’s concerns about the airport’s rich history and its unique built heritage. Unfortunately, we suspect we would be poor museum curators. Gander already has an excellent aviation museum, but, again, we will carefully assess any proposals. Any movement to repurpose the old building will need to be championed and financed by proponents – not the airport authority.
Who owns the airport?
The Gander International Airport Authority accepted transfer of operational, managerial and developmental control from Transport Canada in March 2001 under lease. The Air Terminal Building remains federally owned.