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Open for business: YKF seeking key commercial partners

The innovative plan, announced late last week, is intended to establish a strong commercial travel hub at the airport. YKF has for years tried to entice legacy carriers and new airlines to establish the airport as a base for increased operations. Currently, the airport has one scheduled daily flight – WestJet to Calgary – and Sunwing’s once-weekly seasonal service to Punta Cana, Mexico. In 2016, this service – and the American Airlines service to Chicago –generated approximately 126,000 passengers to and from YKF.

The airport primary catchment area (35 kilometre radius around the airport) generates approximately 2.5 million passengers annually, 95 per cent of which fly through Toronto Pearson, Hamilton, Toronto Billy Bishop, Buffalo, Detroit or London Airports, making the Region of Waterloo the largest under served market in Canada. This represents tremendous commercial opportunities at the airport.

Under the proposed initiative, airlines will be given an exclusive deal to lock in specific destinations if they choose to fly out of YKF. In order to qualify, new and established airlines will need to submit proposals from Oct. 2017 and Jan. 2018 and be evaluated through a detailed RFP process. Airlines that have established operating procedures in place will be leading contenders for the program – specifically those that add economic value to the region.

“We are the 10th largest population in the country with on flight a day,” notes Chris Wood, general manager of the Region of Waterloo International Airport. “We have beat our heads against the wall for a number of years trying to attract carriers and carriers understand that there is a large population here but most of them are being served by their hub at YYZ. So, this has been the story of our lives here for a number of years.”

The new initiative will likely be attractive to established Canadian carriers as well as new ultra-low-cost-carriers (ULCC) looking to establish a foothold in the Canadian commercial landscape. Earlier this month, Canada Jetlines announced it is has had active negotiations with the Regional of Waterloo to set up shop at YKF.

Wood notes that carriers are trying to target communities like Waterloo and compete on price and fly point-to-point scenarios without going through the hub and spoke model that Air Canada, WestJet and even Porter are operating on. This really changed things.

“But when we saw what happens in markets and the predatory behaviour of carriers when new entrants try to get established, at the end of the day, the airport and the community loses because the new entrant gets snuffed out and the incumbent basically finishes off that season and typically, but not always, does withdrawals service from the market,” Wood says.

“At the end of the day, the airport and the community is no better off, so we came up with a way to improve and protect that predatory behaviour from happening.”