Entrepreneurs are driving airport's success

I write a lot about C-level execs in this space, and the announcement yesterday at the Billy Bishop Toronto City Airport was another reminder about the importance of entrepreneurial impact in society. The event surrounded the joint release by the Toronto Port Authority and Toronto Board of Trade regarding the findings of an economic impact study undertaken by Vacouver’s InterVISTAS Consulting Group.

The report found that BBTCA is a major economic engine for the Greater Toronto Area, generating $1.9 billion in annual economic output and 5,700 jobs, which includes 1,700 employed directly at the airport. According to analysts: BBTCA plays a “significant role in providing critical regional and continental transportation linkages to support and grow Toronto’s economy.”

As some of you know, the airport has experienced continued double-digit passenger growth since the arrival of Porter Airlines in 2006, and, later, Sky Regional on behalf of Air Canada in 2011. Tucked near Toronto’s downtown since 1939, the airport serves a large concentration of high-value frequent business and tourism travelers on its 18 routes. Think about your business trips; airports are the essential facilitator.

From less than 26,000 annual passengers in 2005, the airport will exceed 1.5 million customers this year, and is now the ninth busiest airport in Canada. All that success took an entrepreneurial spirit, which came to the fore again yesterday as the boring machines, made in Newmarket, Ontario, were unveiled by the TPA before being lowered 10 stories below ground to begin the underwater portion of the excavation of the P3-funded pedestrian tunnel (that passenger-funded piece of essential infrastructure that was opposed by such people as former Toronto Mayor David Miller {see representative prior posts “Will David Miller make the eco-choice?” June 17-11, “Will David Miller make the eco-choice? part 2” June 20-11 and “Exclusive interview with Hedge Fund Chief David Mueller” Sept 26-09} and City Councillor Adam Vaughan).

According to TBOT President Carol Wilding, “Billy Bishop Toronto City Airport is more than a convenient transportation link into and out of the Toronto Region; it is an economic driver vital to ensuring our economy remains globally competitive.” The Board of Trade surveryed its 10,000 members, and something like 90% of respondents thought the BBTCA had a positive impact on Toronto’s economy. According to the anti-airport group CommunityAir (see representative prior posts “When lobby groups overspin” July 8-10 and “The ‘horror’ of urban noise” Nov 10-09), Toronto’s job creators don’t know what they’re talking about and that Pearson Airport could easily replicate everything the BBTCA does.

Tell that to the entreprenuer from Newmarket whose company built the two specialized boring machines by hand, or the 4,500 CAW workers at Bombardier’s Q400 plant in Downsview, Toronto’s largest manufacturing employer. Without the BBTCA, neither of those two firms would be where they are today. It would be too simplistic to say there are two kinds of groups in society, those that work for a living, and those like Vaughan who take their paycheque from the public purse and essentially criticize the judgment and hard work of entrepreneurs. But it was gratifying yesterday to be in the company of the Board of Trade’s 10,000 members, while the obstructionist types (see prior post “Does 7,850 trump 1,600,000?” Feb 4-10) throw stones at the people who create the jobs that pay the bills in society.

Councillor Michael Thompson, Chair of the Toronto Economic Development and Culture Committee and a longstanding supporter of the airport, reminded us that it is because of projects such as the BBTCA pedestrian tunnel that “Toronto is rated as one of the top five global cities with economic clout and one of the top five cities for economic potential and infrastructure.”

The report explained that the ongoing operations at BBTCA generate total annual economic impacts of:
• $1.9 billion in economic output;
• Approximately 5,700 jobs representing 5400 person years of employment (1,700 of these jobs are directly associated with BBTCA);
• $640 million in gross domestic product (GDP);
• $290 million in wages, and
• Overall tax revenue and Payments-in-Lieu of Taxes of approximately $57 million annually.

The man who deservedly got much of the credit yesterday for the airport’s resurgence was Porter Airlines CEO Bob Deluce. The risks were huge (see prior post “Porter investors show grit” Apr 27-09), but he recogized that the under-used airport could benefit from a “restart” itself, which is as entrepreneurial a thing to do as you’ll see in the venture capital or growth equity landscape. The TPA’s tried its own brand of entrepreneurialism in an effort to keep up, and the state of the art pedestrian tunnel that, when completed in the spring of 2014, will link the BBTCA to the mainland, is proof of that.

In 1935, the Globe and Mail editorial board described the tunnel as being “inevitable”. Now that it’s underway, financed by the private sector without a penny of tax dollars, one is reminded that the word “inevitable” was premature 77 years ago in the absence of a concerted effort by the private and public sectors. Even in a City as rich as Toronto, it still takes entrepreneurs to drive the bus (or airport, as it were).

MRM
(disclosure: this blog, as always, reflects a personal view and is not meant to represent the views of the TPA, its Board/Staff or the federal government)