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Edmonton region to attract direct air flights

 

Edmonton Global, in partnership with the Edmonton Metropolitan Region Board, BOMA, NAIOP, and the Greater Edmonton Region Chambers of Commerce are making the case for the establishment of a regional air services opportunities fund to help attract strategic passenger and cargo flights. If approved, the fund will be managed by Edmonton Global with funding initially coming from the municipalities across the region.  

One of the impacts of Covid-19 has been a pause of international air service from the Edmonton International Airport. Now that the world is beginning to re-open, airlines are actively planning for the resumption of global air services. “As a region, we’ve been working towards this moment since the very beginning of the global pandemic,” said Malcolm Bruce, CEO of Edmonton Global. “This has been the largest disruption of the airline industry in history. As we’ve predicted, airlines aren’t going to go back to business as usual and simply resuming all of their previous routes, they are resetting and reevaluating. We are a fly-in/fly-out economy and our connections to the world are too important to be left to chance.” The purpose of this fund is to help the region influence airline decisions and ensure strategically important routes are resumed.  

“Our tech sector is starting to flourish. How long can we sustain that growth or keep these new companies if they can’t access the world’s other tech centers and financial hubs?” asked Edmonton Global board chair, John Day at a recent Edmonton Global Shareholder meeting. “What will happen when the economy opens up and businesses discover that most direct flights to our region are gone? Thankfully we have it within our power to do something about it.”

Edmonton Global is working closely with business organisations across the region to help raise awareness of this important issue and take action on helping attract flights. “All 10 of the region’s Chambers of Commerce are onboard,” added John. “Every business and business group we’ve spoken with understands the critical nature of this initiative and have offered to throw in their support. We have asked these business organisations to work with us and EIA to identify businesses in every municipality who rely on air service for the movement of people and – this is the most important thing they can do right now – help us identify which key strategic routes we should prioritise. Along side businesses and municipal councils, we have a strong and growing coalition that will follow – and we’re collectively ready to lead.”

Municipalities across the region began debating the establishment of the fund the week of June 7, 2021, with a goal of having an agreement in place by the end of June. Edmonton was the first community to commit financially to the fund with a contribution of nearly $10 million. Fort Saskatchewan and Devon followed close behind. “Leduc County has really stepped up on this and are contributing $1.5 million” added Malcolm. Leduc County, in making this decision, highlighted the critical importance of air service for the region, citizens and business community. “This is an all of community issue and I have never seen us move this quickly and decisively on an issue,” added Mayor Gale Katchur, chair of the Edmonton Global Shareholders group. “The ability to be nimble and respond effectively to a situation that has the potential to become a regional crisis is proof that the collaborative approach upon which Edmonton Global was founded, is working.”

Over the past 15 months, Edmonton Global hosted a series of Air Summits that included the Mayors, Councils, CAOs, and economic development officers from across the region to create a plan for strengthening the region’s connections to the world. The focuses of these summits included discussion of critical passenger routes, growing the region’s trade and export potential through cargo, and strategies to spark the region’s economic recovery post-covid. Having strong passenger and cargo routes is critical to ensuring the region remains globally competitive. “This is the time to act,” added Malcolm. “We’re moving very quickly because airlines are planning routes that will be in place for the next 3-5 years. We can’t afford to miss this window of opportunity.” 

Sustained levels of air service – both domestic and international – also mean that the Edmonton region will accelerate our recovery and continue to attract investors and businesses, which will benefit the region’s economy and long-term competitiveness and growth. Malcolm highlighted the leadership municipal councils have already shown on this issue. “Municipalities across the Edmonton Metropolitan Region are being proactive by seeking out and implementing economic recovery measures. There are many initiatives underway to accelerate the recovery process.” Malcolm also noted that air service is a very important piece of the puzzle. “To achieve the benefits from those other initiatives, we need to make sure we re-emerge from the pandemic with strong connections to our largest trading partners. Whether it’s our tech companies, our financial institutions, our agricultural products, or tourism sector, air service plays a vitally important role here. When it’s safe and appropriate to re-engage with the world, we need to be ready.” 

Why now?

  • Municipalities across the Edmonton Metropolitan Region are being proactive by seeking out and implementing economic recovery measures. As the world begins to re-open, being able to resume trade and international linkages will be crucial to our recovery and future growth.
  • One of the most strategic moves we can make is to secure air service for our communities, our businesses, and our citizens.
    • Collectively, the region is expected to see 7,000 jobs created an increase to GDP of $415 million, and a total economic impact of $811 million.
  • The world is reopening as we speak and every municipality in the region has been planning for this moment for the past 15 months with EIA and Edmonton Global.
  • This is the time to act. We’re moving very quickly because airlines are planning routes that will be in place for the next 3-5 years. We can’t afford to miss this window of opportunity.
  • The potential negative impact on our business community will be significant and long-lasting if we are unable to resume our connections to key destinations.

Business engagement

The Greater Edmonton Chamber of Commerce, BOMA, NAIOP, and Canadian Manufacturers and Exporters are connecting with their members to help inform this work by:

  • Providing insight into priority flights
  • Ensuring businesses understand the importance of utilising direct routes to and from our region

Q & A

Why is funding needed?

  • The Edmonton International Airport is a critical regional asset supporting thousands of jobs and the movement of people and goods across the region, across the country and around the world.
  • As a result of the pandemic, our region’s direct air connectivity fell more than 90%. Businesses of all sizes in the region, many of which depend on frequent and direct air connectivity, are facing difficult recovery paths because they are simply unable to connect with investors, suppliers and customers.
  • By creating an air services opportunity fund, the region will be able to accelerate its return to pre-pandemic air connectivity levels, which will help businesses in the region looking to restart operations.
  • Sustained levels of air service – both domestic and international – also means that the Edmonton region will continue to be a place that attracts investors and businesses seeking to relocate, which will benefit the region’s economy and long-term competitiveness and growth.

Why the urgency?

  • Time is money and Alberta as well as much of the world is reopening now.
  • Right now, airlines are planning routes that will be in place for the next three-five years. We have a small window of time to attract flights to our region or this opportunity will be lost.
  • Other major airport hubs in Canada have benefitted from significant public investments to incentivise the return of air travel to pre-pandemic levels. This means they will recover faster than us unless we also invest in our own success.

How will the fund be used?

  • Funding from municipal partners will be utilised to reduce the resumption/start-up risks for airlines such as contributing to airlines costs such as: aircraft leases/ownership, IT costs, fuel, check-in staff and ground handling. These costs, and the risks associated for airlines, begin with their first flight.
  • It is common in the aviation sector for airports to attract direct international services through incentives to help airlines establish a new route.

What’s the return on investment for the region’s municipalities?

  • Collectively, the region is expected to see 7,000 jobs created an increase to GDP of $415 million, and a total economic impact of $811 million.
  • Calculating ROI for each individual municipality is difficult. We don’t fully know the role air service plays for the businesses in each municipality. A program to better engage the region’s business community is being formed to address this data gap. Shareholders may collectively decide to alter the funding formula for year three should this data show stronger ROI for some municipalities.
  • The Edmonton region cannot grow its population, increase its tax base, and attract investment if people and businesses cannot efficiently and cost-effectively access this region. People don’t relocate to, and businesses don’t invest in, locations they can’t access.

What’s the risk of doing nothing/not enough? 

  • Our businesses and citizens will be significantly impacted for several years.
  • The Region’s economic recovery and long-term competitiveness and growth will be significantly hampered.
  • It is highly likely that businesses who rely on air service and connection to the world will leave our region.
  • Airlines will place their assets elsewhere

How are you engaging other stakeholders and partners such as the business community?

  • Regional partners are working with local chambers of commerce, BOMA, and NAIOP to mobilize the business community so that it:
    • advocates for non-stop service to conduct business globally; and
    • tells the airlines that they will resume flying once the routes are in place.

Thank you for your submission!

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