Toronto Hamilton International Airport positions itself as an attractive LCC base in Canada

Canada’s aviation market is slowly transforming itself into a more LCC friendly environment following years of inhibited growth due to protectionist aviation policies. This was most recently noted by the entrance of Swoop in Jun-2018, WestJet’s entry into the ULCC market. As result of this changing environment, passenger activity at lower cost, secondary airports within the country is beginning to blossom and Toronto John C Munro Hamilton International Airport provides a clear example of this trend.


Summary:

  • Canada’s aviation market is slowly transforming itself into a more LCC friendly environment following years of inhibited growth due to protectionist policies;
  • Rapid growth at Toronto John C Munro Hamilton International Airport in 2017 (up +80% year-on-year) is a clear example of this trend;
  • Swoop, the new ULCC from WestJet, has inaugurated domestic flights from Hamilton; next year Norwegian Air’s will inaugurate trans-Atlantic link from Dublin;
  • Hamilton officials claim “for the airlines and for the passengers, it’s easier to get to, it’s easier to operate in, it’s easier for aircraft to turn around” than local rivals.

Last year Toronto John C Munro Hamilton International Airport handled 599,000 passengers, a staggering 80% year-on-year increase. The result made the airport the fastest growing airport in Canada for 2017. The airport has continued to make strides in recent months to establish itself as an attractive base for LCCs, both domestically and internationally. Swoop, Canada’s brand new ULCC, launched inaugural services to Abbotsford and Halifax from the airport in Jun-2018. The airline has reported “steady bookings and noticeably full flights” since launching the services.

CHART – Toronto Hamilton International Airport witnessed a rapid rise in passenger traffic in 2017 after seeing ups and downs in demand earlier in the decadeSource: CAPA – Centre for Aviation and Toronto John C Munro Hamilton International Airport reports

Toronto Hamilton has also captured international attention from European low cost long haul giant Norwegian Air. The carrier plans to launch daily Dublin-Toronto Hamilton service with Boeing 737MAX equipment in Mar-2019. The launch will mark Norwegian’s first trans-Atlantic route to Canada. New starter Canada Jetlines has further confirmed plans to use Toronto Hamilton as a base for its initial low cost operations. Jetlines plans to launch service from the airport in early 2019.

So what is it about Toronto Hamilton that is so attractive to LCCs? Airport president and CEO Cathie Puckering cites the airport’s low cost structure and easier access compared to larger airports in the Southern Ontario region such as Toronto Pearson International Airport. Ms Puckering said: “For the airlines and for the passengers, it’s easier to get to, it’s easier to operate in, it’s easier for aircraft to turn around”.

CHART – Low Cost Carriers have been the main reason for the recent uplift in demand at Toronto Hamilton International Airport and currently account for more than nine in every ten system seatsSource: CAPA – Centre for Aviation and OAG (data: w/c 20-Aug-2018)

Airport director of marketing and communications Dina Carlucci further highlights the airport is “geographically very well positioned” to host LCCs. It is located an hour away from Toronto City centre and is within reach of nine million people within a two-hour driving radius.

In addition, the airport is investing in infrastructure to improve the experience for passengers and airlines alike. Last year nearly CAD5 million (USD4 million) was spent to construct an international walkway, upgrade automated parking systems, purchase new snow clearing equipment, resurface runways, taxiways and roadways and rehabilitate an apron. Ms Puckering commented: “Our investment strategy has always been to align our spending to what the air carriers and the passengers and our cargo partners need”.

Toronto Hamilton is presently positioning itself to capture excess capacity from soaring growth at Toronto Pearson. Southern Ontario Airport Network (SOAN) reported air traffic in Southern Ontario is on track to reach 110 million passengers by the early 2040s. Greater Toronto Airports Authority CEO Howard Eng has confirmed Toronto Pearson is not capable of handling the expected capacity increase on its own and will need to recruit the help of smaller airports.

Ms Carlucci affirmed Toronto Hamilton has the capacity to meet the growing demand, stating: “If there is a spillover effect from Toronto, we are ready to take that on. Our runway capacity can definitely take it and our terminal capacity can take it as well”.

It isn’t all sunshine and roses though for Toronto Hamilton. Recently Flair Airlines announced plans to leave Hamilton for Toronto Pearson, effective 27-Oct-2018. Flair Airlines spokeswoman Julie Rempel commented: “After extensive analysis we made the determination that due to market size and competition we felt that we could have a greater impact in Toronto”.

Despite the loss of Flair Airlines, the future for Toronto Hamilton is unquestionably bright. With new service by Swoop, Norwegian Air, Canada Jetlines and others, the airport is effectively establishing itself as an attractive base for LCCs. Furthermore, if SOAN’s projections are correct, Toronto Hamilton will witness significant traffic growth over the coming decades as demand for air travel within the Southern Ontario region skyrockets. It is likely that even more LCCs will turn to Toronto Hamilton in coming years as capacity at Toronto Pearson is exhausted.