The future of aviation has always been a subject of intense fascination. It took barely 100 years of innovation to go from the Wright Flyer to the awesome A380, a full-length double-deck jet. Today, we are on the cusp of more revolutionary change, with biofuels, hydrogen, and electric-powered aircraft.
But the future of airports is no less interesting. I’m not just referring to the airport of popular imagination—the place where a vacation begins, or the backdrop to a Hollywood movie—but to the things that make airports the multi-faceted, ecosystems that they are. Their architecture, their retail and passenger experiences, their operational complexities, their clean energy potential, their economic impact.
That’s a lot to get fascinated about, and I believe it’s imperative that we understand the future of airports if we’re going to chart the right course for Canadians and our connections to the world through travel and trade. This series at The Hub will examine how airports can overcome their challenges, evaluate Canada’s competitive advantages, and explore how our communities and country can be shaped by our gateway and hub airports, including its largest, Toronto Pearson. We’ll ask how it may be possible to put the joy back in travel, what airports and energy hubs have in common, and how digitalization can shape the future of travel.
There is a myth that Canada’s air sector is weak, expensive, and broken by COVID.
Yes, there are still some lingering effects from the pandemic: aircraft are in short supply, labour challenges persist, and it will take a while for some to recover from the financial losses of COVID. But the restart challenges have mostly been overcome—and they yielded innovation and progress.
Globally, the travelling public has become more vocal about their expectations, and that has led to many improvements, both in the air and on the ground.
More information is now made available to passengers and the public. Information related to planned and even disrupted journeys is now at the tips of their fingers on smartphones, apps, and TV screens—Pearson’s airport duty managers recently started updating passengers about the day to come on the CP24 Breakfast show. Passengers now receive more data about airlines’ operational intentions and challenges. The accountabilities of service providers in air travel—airlines, agencies, airport authorities, and others—are more transparent.
And people are on the move again. The International Air Transport Association forecasts that air travel will double over the next two decades. Air travel is more accessible to lower income brackets and travellers in emerging economies. Toronto and Canada are seeing demand at the doorstep. Pearson projects its yearly passenger volume to increase from 45 million in 2023 to 65 million by the early 2030s—nearly 50 percent growth.
The truth about Canada’s air sector is that it often punches at or above its weight.
Critics argue that Canada’s passenger airline industry is not competitive because the top two carriers control about 60 percent of the market. But that’s also true of the U.S., where the population is eight times greater and four airlines control about 80 percent of the market. Low-cost carriers have had a tough year in Canada, but their issues with inflation, fuel costs, and a tight labour market have largely mirrored those seen in the U.S. airline industry, where several budget carriers are struggling and airlines of all kinds have been missing earnings targets.
But there are competitive bright spots here: Porter Airlines has grown to 7 percent of all scheduled seat capacity nationally and is still growing. It’s quickly become Pearson’s third-largest carrier (by flights and seats) since launching in early 2023, and it is the second-largest in Toronto, counting flights from Billy Bishop airport.
Nationally, traffic recovered to 93 percent of its pre-pandemic total last year. Volume is most concentrated at the largest hubs, including Toronto Pearson, where we are seeing more wide-bodied planes and more international flights. (Pearson has more international connections than any other North American airport.)
In business, growth is a good problem to have, and it leads to infrastructure renewal and investment. Pearson, which competes with the likes of New York’s JFK and Chicago’s O’Hare for international gateway traffic is planning a 10-year infrastructure program to keep pace.
Why? Because Canada’s largest airport needs new gates and terminal capacity to handle more passengers, to receive more and larger planes, and to provide more services while unlocking more cargo capacity. Also, adding modern, digital infrastructure will enable the new technologies to provide better customer experience and efficient operations. High-performance airfields with modern airfield lighting and high-speed taxiways save time and time is the currency for better performance.
An Air Canada Star Alliance plane is seen at Pearson Airport in Toronto, on Wednesday, July 24, 2024. Christopher Katsarov/The Canadian Press.
Pearson also needs to support climate resiliency with alternative fuels and new fueling capacity. Next-generation airports will soon become energy hubs.
Our partners want this, too. The majority of our partner airlines have endorsed our vision. They need to compete across North America and the world, so they need Canada’s largest airport to do the same.
Our passengers want better infrastructure. They are also asking for more digital tools to navigate the airport, refreshed facilities, no overcrowding, and better retail.
We must do this while also managing costs.
These large projects take time, and there are no magic solutions to avoid the complexities. When I led the $14-billion modernization of Los Angeles International Airport (LAX), we engaged companies and leaders from across the world. Positioning our leadership team is key, and we have a team with decades of experience in airport development projects of this magnitude.
We are in the early stages of scoping programs and selecting teams for several large programs. The right partners will ideate and bring solutions that will enable us to build what we need as efficiently as possible. Managing costs and disruption matter, as does generating positive economic and social impact.
Research from the Innovative Research Group tells us that 92 percent of Greater Toronto Area residents believe a major, modern airport is essential for their region’s success, and we agree. Pearson serves a greater urban area of six million people with a purchasing power of $2 trillion and it serves as a front door for Canada’s $100-billion national tourism economy.
The Pearson Economic Zone is Canada’s second-largest employment area, facilitating 6 percent of Ontario’s GDP. Our research indicates that the zone employs 500,000 people (one out of every seven jobs in the GTA) and contains Canada’s largest concentration of manufacturing companies.
So yes, airports matter, and they are fascinating in their own right—the subjects of strong opinion but also of passion and commitment to stewardship. In this series, we will dive deeper into our vision and our view of exponential opportunities that can benefit Canada through its air sector and Toronto Pearson International Airport.
This article was made possible by Toronto Pearson Airports and the generosity of readers like you. Donate today.
