Comox Valley Airport Commission - Third Quarter Report - January 2006

CVAC's Mission

The community has assigned specific tasks to the Commission by way of CVAC's Letters Patent. The Commission has defined these requirements through their mission statement: "To operate safe, secure and efficient aviation facilities which consistently exceed the expectations of our customers and communities." To meet this mission, CVAC has defined four performance targets with measurable goals. These targets are based on a five-year timetable 2003 to 2007; CVAC is entering the fourth year of the five-year plan.

By the end of 2007, CVAC intended to fly 200,000 passengers annually. This goal is being achieved through regional market development primarily through tourism. Although WestJet is generally credited with the passenger growth at Comox, the growth is actually in response to a very aggressive marketing plan, which highlights the many attractions throughout the region. WestJet's responded to the resulting demand with direct access to the Calgary marketplace which has proven very successful. Comox flew 209,668 passengers in 2005 which is well in advance of the five year time table.

The most challenging aspect of operating any airport facility is the ability to meet the long term capital requirements. The new airport facilities for the Comox Valley address the short term need; however, to be economically viable, the Commission must have a very progressive business plan which addresses the long term viability by setting aside funds for future capital improvements and the replacement of the current infrastructure. The current goal was set in recognition that it would take several years for the business to grow sufficiently to generate the necessary funds. CVAC is pleased to report that this goal has been exceeded for several years and the funds that were generated have been dedicated to additional capital projects. The recent ramp expansion cost $5.5 million to complete of which $1.5 million came from CVAC's capital reserve. The additional ramp allows the Comox Valley to explore additional air service development as CVAC is now capable of handling large wide body aircraft which will facilitate long haul air service to places such as Europe.

To exceed the expectations of our customers it is necessary to offer a high degree of customer satisfaction. Customer Satisfaction is measured annually through a program administered by the Canadian Airport Council. The survey is quite comprehensive and covers items that are directly under the control of CVAC, such as convenience of parking and staff courtesy, to issues that fall outside of our jurisdiction, such as the availability of taxis and roadway signage to/from airport. The new facilities provide an excellent venue, which raised our ranking from last place in 2003 to a top place tie in 2004. Customer satisfaction is a continuous improvement process that requires a dedicated effort. CVAC was very pleased to announce the highest rating in Canada for 2005 with a 4.58 rating.

The regional passenger share is ascertained by comparing the statistics from Campbell River, Nanaimo and Comox annually. Regional marketing showcases the region, but that market can be serviced by any of the three airports. Increasing the market, and then the market share, requires combining the correct air service with the most beneficial markets to and from the region. The success of WestJet at Comox is a result of this philosophy; Transat Holidays to Mexico is another example that is proving very successful. CVAC continues to pursue those airlines that will expand the current market and offer new markets to and from the Comox Valley and the region. CVAC's 2005 market share is 52%; but more importantly the following graph shows how Comox has increased its market share by increasing the market. You will note that CVAC's gain in the market share is due to the development of new markets.

The outlook for the Comox Valley Airport is very positive. Passenger numbers are increasing ahead of forecast which in turn generates the necessary revenue for additional capital requirements. CVAC has commissioned an Airport Master Plan which will forecast growth for the next twenty years, identify future infrastructure requirements, and assess some of the off airport requirements such as road access and signage. The report should be available by mid 2006.