London Moves – Part 4 – YXU

YXU is the internationally-recognized airport code and location identifier for London International Airport.

In my opinion, it is also the air address for one of our region’s most under-appreciated assets, and an integral piece of my proposed transportation plan.

The attributes of this asset are impressive. Among many things, the London International Airport:

  • Serves a catchment area of 2 million people.
  • Exceeded 500k passengers for the first time in 2016, with the capacity to accommodate 500k more annually.
  • In partnership with the City, centres a fully-serviced business park that is home to over 50 companies and 1100 employees, who collectively generate $350MM in economic value annually.
  • Offers 24 hour commercial and cargo services.
  • Operates within a short distance from major arterial highways and all points within the region.
  • Operates in an area flush with vacant land and away from residents, making it ripe for future growth and suitable to provide a wide array of commercial and community needs.
  • Is an incorporated company that operates at arms-length from the City, without subsidyfrom London taxpayers.
  • Amassed a 20-year track record of prudent financial management and good governance.

Last fall, in Part 2 of my series entitled London Inc. Issues and Opportunities,  I highlighted both the strategic value and potential contribution our airport could make towards the growth and differentiation of our regional economy. After all, the apparatus is already there. Our airport’s capacity to accommodate new industry, capital and travellers make it a vital contributor to the region’s talent attraction and retention arsenal. 

Our airport could play a lead role as a regional transportation satellite, capable of accommodating high-speed rail, light rail transit, inter-city transit, and most notably, connections to major centres across Canada and the US. More on that below.

In the immediate term, London needs to make connectivity to other major centres a priority. The City’s limited and increasingly inefficient access points are inhibiting our economic and social engagements. Talent and capital migrate to where it is easy and efficient to pursue new opportunities, especially in a highly competitive global environment.  Therefore, it is incumbent upon our community to make ourselves as attractive and welcoming as possible.  In my view, London’s airport provides us with that immediate entry point into a City and region looking to compete on the world stage.  Such a forward-thinking approach positions our airport very favourably, especially as capacity challenges at Toronto Pearson create constraints on their service model, and opportunities for us to grow our own airport’s value proposition.

Immediate Action

Service Expansion

Given the airport’s current state of readiness, the near-term strategy must be to improve our connectivity and specifically engage other major carriers to operate direct flights out of London, destined to major hubs in the US.

The approach, which has been successfully introduced by other municipalities seeking to expand their market reach, involves the City financially supporting the Airport Authority’s entry into select service agreements with regional carriers capable of connecting Londoners with major airport hubs in Detroit, New York, Boston, Chicago, Minneapolis, and/or Atlanta.

The goal would be to ensure a steady stream of services to key destinations, in order to ensure the efficient flow of talent, capital, tourists and residents to and from our region. The additional engagements would also improve our connectivity to Toronto, as competition ignites service.  More importantly, the enhanced service options would have the dual benefit of stimulating our economy, retaining our current roster of employers, and providing our region with a much-needed boost in profile and interconnectivity.  This strategy could be coupled with custom pre-clearance services to help expedite entry into the US and reduce the service agreement expense associated with cross-border flight restrictions.

The City would leave it to airport officials and key industry and institutional players to assess and compile a list of optimum routes and carriers, and propose the appropriate investment required, based on the menu of options. Council, on behalf of the community, could then determine the investment threshold relative to other transportation priorities, and the respective time period.  The investment would be on a declining scale as the utilization grows and the market connection matures, and be terminated if the route fails to build the necessary traffic to sustain itself.

I recognize that these types of service agreements based on minimum utilization levels can be expensive. Airport Executives tell me that they can find creative ways to minimize this cost, and given their track record, I believe them. However, for purposes of this plan, I still believe it prudent to estimate some level of investment. Similar programs used in other centres put the price tag to the City of between $500k and $2.5MM annually per destination depending on the flight frequency and type of aircraft used. Many of the agreements are performance-based and may only require a portion of the financial commitment. Nevertheless, the potential benefits far exceed the initial costs, the risks are manageable, the status quo is not a sustainable option, and the current Council has already earmarked tens of millions of dollars to enhance Londoners’ internal transportation needs. As such, I have to believe that some of this investment can be made available to expand the capacity of London’s air transport mode.

Longer Term

Regional Transportation Satellite

In addition to improving the region’s connection to outside centres, I believe that the lands surrounding the airport could also serve as a multi-purpose transportation satellite, which would augment the downtown hub and support the entire region. Consider for a moment the potential efficiencies and opportunities associated with bundling air travel, high-speed rail, intra and inter-city transit (LTC & Greyhound), a traffic light-free connection to the 401, a substantial park & ride capability, and even express transit from the airport to the downtown core, and through to the west side of the city; all in close proximity to each other, with minimal intrusion to existing streets and maximum utilization of existing right-of-ways. The connections are there and the potential is quite extraordinary, all at a lower overall cost to taxpayers across all three levels of government.

A number of things have to happen for this concept to become a reality, but the opportunity is there, and with a little imagination and a lot of perseverance, YXU could serve as the key piece of a powerful transportation network that favourably positions our city and the region for decades to come.

Tomorrow – Rail