As Canadian Economy Booms, Airlines and Airports Flourish

Following on a record leisure travel year in 2017, Canada’s air transport and tourism industries are preparing for a banner 2018, with investments in infrastructure, route networks and security set to help better serve citizens and inbound tourists.

A year of celebrations, a strong economy and increased international flights contributed to the more than 23 million international visits to Canada in 2017, an increase of 3.1 percent over 2016.

The Conference Board of Canada reported that city and national anniversary celebrations led to a 5.5 percent increase in Ottawa-Gatineau visits last year, while Montreal overnight visits increased 5.1 percent. Ottawa held a grand national celebration July 1, also known as Canada Day, marking the 150th anniversary of Canada’s confederation, while Montreal celebrated its 375th anniversary in 2017.

Futuristic digital identity system to be tested in 2017
To accommodate the major growth expected in air traffic (see airlines story, page 1), Canada’s airports are facing customs and border handling issues. That’s why Canada will be testing this year technology solutions to protect travelers and facilitate passenger growth.

A restricted group of travelers flying between Canada and the Netherlands will take part in a “proof of concept pilot of the global “Known Traveler Digital Identity System,” leveraging digital technologies such as advanced biometrics, cryptography and “distributed ledger technologies.”

The system is the brainchild of the World Economic Forum’s Security in Travel Project. Implementation dates for the Canada-Netherlands concept pilot were not disclosed.

Without improvements, the group estimates airlines, airports and hotels are at risk of losing $10 billion due to a reduction in air traffic and inefficiencies throughout the global air system. Travelers and others would lose $20 billion in time and added costs, and there is the risk of $120 billion in expenses as the result of “a major attack,” said a report accompanying the announcement.

“As a leader in cutting-edge aviation security, Canada looks forward to working with the World Economic Forum and the Kingdom of the Netherlands to explore ground-breaking technologies that will facilitate secure and seamless air travel,” said Canada’s Minister of Transport, Marc Garneau. Leveraging new technological advancements can enhance public safety and security, making air travel more efficient while improving the traveller experience.”

The group is focusing its efforts around five “pain points” where they feel they can improve the current passenger experience, including: Visa Application and Screening, Booking, Security Screening, Departure Gate and Exit Control, and Arrival and Border Security.

Also, US customs and border officers received expanded security privileges in 2017, causing some concern that Canadian travelers would be detained unnecessarily. The Preclearance Act of 2016, permits US Customs and Border Protection (CBP) officers who conduct preclearance security checks of Canadian passengers before they board US-bound flights to conduct strip-searches in Canadian airports, and detain Canadians should they decide to withdraw from preclearance procedures.

Airport terminal and security investments pay off
During the peak summer months, Aéroports de Montréal reported that while it experienced a 10 percent growth in the number of passengers at international arrivals, average wait times were less than 10 minutes daily with zero wait times longer than 45 minutes.

The airport authority credited part of the success due to the introduction of a new “connections center” which allows airline passengers connecting to other destinations via Montréal-Trudeau to clear customs through a dedicated connections area.

While airlines and airports are investing in improvements, customs and border protection have handled the crush fairly well, said Vanessa McGovern, EVP of business development and partnerships with GIFTE. A regular speaker at Travel MarketPlace, McGovern was born and raised in Canada, and travels there frequently on business and to visit family.

“I entered Canada several times last year, driving and at the airports. For Canadians, it felt like we were zipping through the line,” she said.

Vancouver expanding terminal facilities in 2018
Vancouver International Airport has seen consistent, significant growth the last few years as the Canadian economy has flourished, and the airport has found itself growing its transpacific passenger base. In 2017, the airport handled more than 24 million passengers, causing the local authorities to initiate use of “remote-stand” operations due to a lack of enough terminal gates and speed up capital improvements.

Vancouver spent (CAD) $12 million to expand its remote-stand operations last summer, using covered ramps and electric buses, and is accelerating construction of its four-gate D Pier expansion, slated to open in 2020.

Home sharing regulations launch this year
Meanwhile, two Canadian cities will implement short-term rental regulations this year, impacting operators like Airbnb.

On Apr. 1, Vancouver will become the first major Canadian city to regulate short-term rentals like Airbnb, including banning rentals of entire apartments or houses if an owner does not live there. Toronto will follow on July 1, when rules it approved in December go into effect.

Major Canadian urban centers have been struggling with providing affordable housing for their residents and many housing advocates point to short-term rentals as a major contributor, as landlords and home owners attempt to profit from tourists and other guests from outside their cities.

Vancouver’s legislation, passed on Nov. 14, 2017, restricts short-term rentals of suites that are not principal residences. In Toronto, the city council in December approved regulations allowing the rental of a principal residence only, capped at fewer than 28 days.