Is Hamilton getting enough out of its airport?

Councillor wants city to have another look at its lease with TradePort

By Julia Chapman, CBC News

Posted: Aug 13, 2013 8:44 AM ET

Last Updated: Aug 12, 2013 5:45 PM ET

Disappointing revenue and too few passenger flights have a Hamilton councillor seeking a review of the city's lease with the company that operates the John C. Munro Hamilton International Airport .

Ward 5 councillor Chad Collins proposes striking the committee in advance of 2016. That year will be the first of three times that the city will review the 40-year lease signed in 1996 with TradePort, the sole operator and manager of the airport, he said.

"I've been very critical of the lease we have now, and it was certainly celebrated as being a big win for the city for benefits," Collins told the city's general issues committee Monday after councillors heard an annual report from TradePort. "I think a lot of issues have been exposed publicly over the last 10 years."

The subcommittee would examine some of the "shortfalls" of the current lease, he said, and spell out who — the city or TradePort — is responsible for the airport "from a financial perspective, from a regulatory standpoint, to everything along those lines." The subcommittee could put "some meat on the bones" of the contract, he said.

City council was faced with a choice in the 1990s to choose a passenger operator or a hybrid passenger/cargo operator, he said. The city went with the latter, and selected TradePort.

"It was probably a year-long process to iron out exactly how the airport would be operated, (and) what investments they would make over a 40-year period," Collins told CBC Hamilton. "By the time the documents were signed and approved, what we ended up with looked a lot different that what was reported in the initial contract."

Collins said he expected more passenger traffic through the airport and stability with airline operators opposed to a "revolving door" the airport has now. The city also expected more from a "revenue sharing perspective," he said.

"We're receiving on average maybe $100,000 a year and we expected a lot more than that when we first signed the deal," he said.

The biggest outstanding issue, Collins said, is an extension of the shorter of the two runways. That was supposed to happen within the first 20 years of TradePort's lease.

"We're getting pretty close to that 20 year and we haven't seen anything in terms of plan or design to indicate that investment is on the horizon," he said.

The subcommittee could set timelines for those improvements, he said, and consult with Hamiltonians on what they want to see from the airport.

"It seems like every year or two years, a new issue comes up at the airport," he said. "We need to clearly put language in the contract that states who is responsible."

The airport's website states TradePort has invested $77.9 million to the city of Hamilton between 1996 and 2012.

It calculates the net benefit of the privatization at more than $200 million.

Collins hopes to present a firm proposal in September.

CEO Frank Scremin presented the annual report Monday. The airport paid the city $290,000 in 2012, it said. That's what was left from the $14.6 million revenue after $11.7 million in expenses and pocketing $2.9 million in net income.

TradePort's rent to the city has actually increased by 71 per cent between 2011 to 2012 he said.

Scremin's report said only 351,491 passengers used the airport in 2012. That number was better that passengers in 2011 by 5 per cent, but cargo weight carried in and out of the airport decreased by 7 per cent.

Does the city need to get a better deal from the private operators of Hamilton Airport?