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Feasibility Study

Air Cargo Development at Windsor


International Airport

Phase 1: Market Potential Analysis

Submitted on September 04th, 2009 by:


Lufthansa Consulting GmbH
Von-Gablenz-Str. 2-6
50679 Kln
Germany

Registration:
Local Court of Cologne
Commercial Register HRB 17788

Managing Director:
Werner Schuessler

Market Potential Analysis for Windsor International Airport

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Content

1. Executive Summary....................................................................9

2. Introduction ..............................................................................14

3. Methodology .............................................................................15
3.1 Research .................................................................................................... 15
3.2 Determine Relevant Air Cargo Market ........................................................ 16
3.3 GDP driven base forecast for the Relevant Market ..................................... 17
3.4 Definition of Market Share for Windsor International Airport and creation of
base forecast .............................................................................................. 18
3.5 Consider impacts of influence factors on YQG ........................................... 20
3.6 Use Forecast Model to project YQG Cargo Volumes .................................. 20

4. Economic Environment ............................................................23


4.1 Economic characteristics of Canada ........................................................... 23
4.1.1 Gross Domestic Product of Canada ........................................................... 24
4.1.2 Demographic Structure of Canada ............................................................. 25
4.1.3 Foreign Direct Investments of and in Canada ............................................. 26
4.2 Economical characteristics of Ontario ......................................................... 30
4.2.1 Gross Domestic Product of Ontario ............................................................ 30
4.2.2 Trade and Infrastructure of Ontario ............................................................. 31
4.2.3 Demographics of Ontario ............................................................................ 35
4.2.4 Perishable Air Cargo and Ontarios Perishable Trade ................................ 36
4.2.5 A closer look at the economy of Windsor .................................................... 39
4.3 Economic characteristics of Michigan, USA ................................................ 42
4.3.1 Gross Domestic Product of Michigan .......................................................... 42
4.3.2 Trade and Automotive Industry of Michigan ................................................ 44
4.3.3 Demographics of Michigan ......................................................................... 46
4.4 Canadian Trade Development .................................................................... 48
4.4.1 Canadas Trade Partners ............................................................................ 51
4.4.2 Key Export / Import Commodities ............................................................... 52
4.4.3 Agreements impacting trade crossing the border (CA-USA) and Air Cargo
Security ...................................................................................................... 53
4.5 Canadas Transport System and Trade by Mode of Transportation ............ 56
4.5.1 Canadian Air Transportation & Trade ......................................................... 57
4.5.2 Canadian Road Transportation and Trade.................................................. 60
4.5.3 Canadian Rail Transportation and Trade .................................................... 62
4.5.4 Canadian Marine Transportation and Trade ............................................... 64
4.6 Aviation Policies and Regulations ............................................................... 65
4.6.1 Historical Background ................................................................................. 65
4.6.2 Bilateral Air Agreements (Canada) ............................................................. 65

5. Relevant Airports and Airlines for YQG ...................................70

Market Potential Analysis for Windsor International Airport

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5.1 Windsor International Airport (YQG) ........................................................... 70
5.2 Competing Airports ..................................................................................... 71
5.2.1 Region of Waterloo International Airport (YKF) ........................................... 72
5.2.2 Hamilton - John C. Munro International Airport (YHM) ................................ 73
5.2.3 London International Airport (YXU) ............................................................. 74
5.2.4 Detroit Metropolitan Wayne County Airport (DTW) ..................................... 75
5.2.5 Detroit Willow Run Airport (YIP).................................................................. 77
5.2.6 Toledo Express Airport (TOL) ..................................................................... 79
5.2.7 Toronto - Lester B. Pearson International Airport (YYZ) ............................. 80
5.2.8 Bishop International Airport (FNT) .............................................................. 82
5.3 Historic Traffic Development at YQG .......................................................... 84
5.4 Canadian Airline Market ............................................................................. 85
5.4.1 Canadas Key Passenger and Cargo Airlines ............................................. 85
5.4.2 Other Regional and Cargo Airlines ............................................................. 89

6. Air Cargo Forecast ...................................................................93


6.1 Influence Factors ........................................................................................ 93
6.1.1 Development of Air Cargo Related Facilities .............................................. 93
6.1.2 Distribution Centers .................................................................................... 93
6.1.3 Airline Marketing / Air Service Development ............................................... 94
6.1.4 Pre-Clearance Facility ................................................................................ 94
6.1.5 Stimulus Packages and Local Business Development ............................... 94
6.2 Assumptions for the three Forecast Scenarios ........................................... 95
6.3 Cargo Forecast Results .............................................................................. 98
6.3.1 Most Likely Scenario................................................................................... 99
6.3.2 Optimistic Scenario ....................................................................................102
6.3.3 Conservative Scenario...............................................................................102

7. Recommendations ..................................................................103
7.1.1 Development of Air Cargo related facilities ................................................103
7.1.2 Airline Marketing / Air Service Development ..............................................104
7.1.3 Development of the Cargo Village ...........................................................105

8. Annex I - Cargo Forecast Data by Scenario ..........................106


8.1 Most Likely Scenario..................................................................................107
8.2 Optimistic Scenario ....................................................................................110
8.3 Conservative Scenario...............................................................................113
8.4 Short to long term growth rates..................................................................116

9. Annex II Examples of Shippers, Consignees and Routings for


the Windsor Region ................................................................117

Market Potential Analysis for Windsor International Airport

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List of Figures

Figure 1: Lufthansa Consulting project approach.......................................... 9


Figure 2: Data for total forecast all three scenarios .................................. 12
Figure 3: Data for Most Likely Scenario Comparison of Segments .......... 12
Figure 4: Lufthansa Consulting project approach........................................ 15
Figure 5: 2008 market shares within the Relevant Air Cargo Market .......... 16
Figure 6: Air Cargo Base Forecast for the Relevant Market 2009-2034 ...... 18
Figure 7: Air Cargo Base Forecast for YQG 2009 to 2034 ....................... 19
Figure 8: Screenshots Lufthansa Consulting Market Model Technique .... 21
Figure 9: From Base Forecast to three different scenarios for YQG ........... 22
Figure 10: Map of Canada showing YQG ................................................... 23
Figure 11: Nominal GDP of Canada 1998 to 2008................................... 24
Figure 12: Canadas nominal GDP growth 1999 to 2033 ......................... 24
Figure 13: Canadas GDP structure 2008 ................................................ 25
Figure 14: Population density of Canada .................................................... 25
Figure 15: Top 15 cities in Canada 2009 ................................................. 26
Figure 16: Development of Canadas in and out flow FDI 2004 to 2008 .. 27
Figure 17: FDI in Canada by industry 2008 ............................................. 27
Figure 18: FDI in Canada by geographical area 2008 ............................. 28
Figure 19: Canadian FDI abroad by industry 2008 .................................. 28
Figure 20: Canadian FDI abroad by geographical area 2008 .................. 29
Figure 21: Map of Ontario ........................................................................... 30
Figure 22: Ontario and its geographical regions ......................................... 30
Figure 23: GDP structure of Ontario 2008 ............................................... 31
Figure 24: Ontarios Real GDP 2006 to 2013 .......................................... 31
Figure 25: Top international export markets of Ontario 2008 ................... 32
Figure 26: Top international exports of Ontario 2008 ............................... 32
Figure 27: Top international import markets of Ontario 2008 ................... 33
Figure 28: Top international imports to Ontario 2008 ............................... 33
Figure 29: Age distribution of Ontario in 2008 ............................................. 35
Figure 30: Immigration to Canada in 2008 .................................................. 35
Figure 31: Types of Perishable Air Cargo (PER) ........................................ 36
Figure 32: Ontario Agri-Food Trade Development (bn CAD) ...................... 37
Figure 33: Ontario Agri-Food Trade by Region 2008 ............................... 37
Figure 34: Ontarios agri-food trade per commodity group 2008 .............. 38
Figure 35: Ontarios agri-food trade per commodity group 2008 .............. 38
Figure 36: Farm Statistics 2006 .................................................................. 39
Figure 37: Windors Real GDP growth 2006 to 2013 ............................... 40
Figure 38: Industry Growth Rate Forecast for Windsor 2009 to 2013 ...... 40
Figure 39: Windsors regional GDP by sector 2008 ................................. 41
Figure 40: Map of Michigan ........................................................................ 42
Figure 41: USAs GDP structure per region - 2008 ..................................... 43
Figure 42: GDP structure Michigan 2008 ................................................. 43
Figure 43: Top international export markets from Michigan 2008 ............ 44
Figure 44: Michigans Exports by industry parts - 2008 .............................. 44

Market Potential Analysis for Windsor International Airport

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Figure 45: Top imports from Canada to Michigan 2004 ........................... 45
Figure 46: Transportation imports from Canada to Michigan 2004 .......... 45
Figure 47: Oil price development Michigan Jan. 2005 to Jul. 2008 .......... 46
Figure 48: Age distribution in Michigan 2008 ........................................... 47
Figure 49: Michigan main occupations 2008 ............................................ 47
Figure 50: Historic Trade Development in Canada 2005 to 2008............. 48
Figure 51: Canadian import growth by industry sector 2004 to 2008 ....... 49
Figure 52: Canadian export growth by industry sector 2004 to 2008 ....... 49
Figure 53: Canadian export growth by country 2003 to 2008 ................... 50
Figure 54: Canadian import growth by country 2003 to 2008 ................... 51
Figure 55: Canadas major Export Trading Partners 2008 ....................... 51
Figure 56: Canadas major Import Trading Partners 2008 ....................... 52
Figure 57: Leading exports in million CAD 2005 to 2008 ......................... 52
Figure 58: Leading imports in million CAD 2005 to 2008 ......................... 53
Figure 59: Canadian International Trade Value (of goods) by Transportation
Mode ......................................................................................... 56
Figure 60: Domestic Freight within Canada by Mode 2005 (thousand of
metric tons) ................................................................................ 57
Figure 61: Int. goods shipped by air to/from Canada 98 to 08 ................ 58
Figure 62: Canadian Air Imports/Exports by world region 2007 to 2008 .. 59
Figure 63: Top 25 Canadian Air Trade Partners 2008 ............................. 59
Figure 64: Canadian Air Imports and Exports by commodity groups 2007-
2008 .......................................................................................... 60
Figure 65: Tonnage by Canadian For-Hire Carriers 2004 to 2006 ........... 61
Figure 66: Canadian Int. Trade Shipped by Trucks per Country 2008 ..... 61
Figure 67: Canadian Int. Trade Shipped by Trucks per Commodity Group
2008 .......................................................................................... 62
Figure 68: Twenty Largest Border Crossings (CA-US) for Trucks - 2008 ... 62
Figure 69: Rail exports originating from Canada and Ontario 99 to 08 ... 63
Figure 70: Rail imports originating from Canada and Ontario 99 to 08 ... 63
Figure 71: Exports/Imports by Province/Territory of Origin/Clearance 08 64
Figure 72: Tonnage Handled in Canadas Port System 2005 to 2007 ..... 64
Figure 73: Canadian Bilateral Air Agreements and Designated Carriers .... 66
Figure 74: Runways YQG ........................................................................... 70
Figure 75: Airlines serving YQG ................................................................. 70
Figure 76: Comparison of YQGs Competing Airports ................................ 71
Figure 77: Runways YKF ............................................................................ 72
Figure 78: Airlines serving YKF .................................................................. 72
Figure 79: Landing Fees YKF ..................................................................... 72
Figure 80: Runways YHM ........................................................................... 73
Figure 81: Airlines serving YHM ................................................................. 73
Figure 82: Landing Fees YHM .................................................................... 74
Figure 83: Runways YXU ........................................................................... 74
Figure 84: Airlines serving YXU .................................................................. 75
Figure 85: Runways DTW ........................................................................... 75
Figure 86: Total Air freight DTW 2008 to 2009......................................... 76
Figure 87: International Air freight DTW 2008 to 2009 ............................. 76

Market Potential Analysis for Windsor International Airport

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Figure 88: Domestic Air freight DTW 2008 to 2009 .................................. 76
Figure 89: Airlines serving DTW ................................................................. 77
Figure 90: Charges DTW ............................................................................ 77
Figure 91: Runways YIP ............................................................................. 78
Figure 92: Airlines serving YIP.................................................................... 78
Figure 93: Landing Fees YIP ...................................................................... 79
Figure 94: Runways TOL ............................................................................ 79
Figure 95: Airlines serving TOL .................................................................. 80
Figure 96: Runways YYZ ............................................................................ 80
Figure 97: Airlines serving YYZ .................................................................. 81
Figure 98: Landing fees YYZ ...................................................................... 81
Figure 99: Runways FNT ............................................................................ 82
Figure 100: Air cargo tonnage at FNT 01/2008 to 05/2009 ...................... 82
Figure 101: Airlines serving FNT ................................................................ 83
Figure 102: FedEx air cargo tonnage at FNT 01/2008 to 05/2009 ........... 83
Figure 103: Total Aircraft movements at Windsor Airport 2004 to 2008 ... 84
Figure 104: Air Canada............................................................................... 85
Figure 105: Cargo Revenues Air Canada ................................................... 86
Figure 106: Cargo Airline Ranking 2007 ..................................................... 86
Figure 107: WestJet.................................................................................... 87
Figure 108: Air Transat ............................................................................... 87
Figure 109: CargoJet Airways..................................................................... 88
Figure 110: Other regional and cargo airlines ............................................. 89
Figure 111: Aggregated Average Growth Rate of the Total Cargo Forecast98
Figure 112: Total Air Cargo Forecast all three Scenarios ........................ 98
Figure 113: Most Likely Air Cargo Forecast for YQG .................................. 99
Figure 114: Impact of Influence Factors on Most Likely Scenario ............... 99
Figure 115: Most Likely Scenario Inbound vs. Outbound ....................... 100
Figure 116: Most Likely Scenario International vs. Domestic ................. 100
Figure 117: Most Likely Scenario Comparison of Cargo Segments ....... 101
Figure 118: Optimistic Air Cargo Forecast for YQG .................................. 102
Figure 119: Conservative Air Cargo Forecast for YQG ............................. 102
Figure 120: Air Service Development Approach ....................................... 104
Figure 121: Development of the Cargo Village ......................................... 105
Figure 122: Data for Total Forecast all three Scenarios ......................... 106
Figure 123: Data for Most Likely Scenario Inbound vs. Outbound ......... 107
Figure 124: Data for Most Likely Scenario International vs. Domestic ... 108
Figure 125: Data for Most Likely Scenario Comparison of Segments .... 109
Figure 126: Data for Optimistic Scenario Inbound vs. Outbound ........... 110
Figure 127: Data for Optimistic Scenario International vs. Domestic ..... 111
Figure 128: Data for Optimistic Scenario Comparison of Segments ...... 112
Figure 129: Data for Conservative Scenario Inbound vs. Outbound ...... 113
Figure 130: Data for Conservative Scenario International vs. Domestic 114
Figure 131: Data for Conservative Scenario Comparison of Segments . 115
Figure 132: Growth Rates ......................................................................... 116

Market Potential Analysis for Windsor International Airport

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List of Abbreviations

AADT Annual Average Daily Traffic


a/c Aircraft
approx. Approximately
ATI Air Transport Intelligence
bn Billion
CA Canada
CAD Canadian Dollar
CAGR Compound Average Growth Rate
CASS Cargo Accounting Settlement System
et al and others
e.g. for example
etc. et cetera
EU European Union
FDI Foreign Direct Investments
GDP Gross Domestic Product
IATA International Air Transport Association
IBET Integrated Border Enforcement Team
ICAO International Civil Aviation Organization
i.e. that means
ISO International Standard Organization
km Kilometers
LCG Lufthansa Consulting GmbH
LH Lufthansa
m Million
MPA Market Potential Analysis
n.a. not available
O&D Origin and Destination
PAX Passenger
PIP Partners in Protection
RFS Road Feeder Services
RTK Revenue Ton Kilometers
sqkm square kilometers
sqm square meter
SSCMS Secure Supply Chain Management System
UN United Nations
USD US Dollar
YQG Windsor International Airport

Market Potential Analysis for Windsor International Airport

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1. Executive Summary

Lufthansa Consulting recognizes the uniqueness of Windsor International


Airports position in the regional and national economy and its desire to de-
rive added value from a location in the midst of a region of high-level com-
mercial, transportation and logistics activities.

Air cargo can play a large role in developing an airport; in the case of Wind-
sor International Airport (YQG), considerable quantities of air cargo are gen-
erated in its catchment area, mainly by the automotive and agricultural sec-
tors. YQG furthermore is characterized by excellent accessibility and pro-
vides ample space for development and intermodal transshipments, but
currently lacks state-of-the-art infrastructure and facilities to process and
handle air cargo.

The Market Potential Study and Forecast have been defined as Phase 1 of a
comprehensive Feasibility Study for Windsor International Airport. The
Studys objective has been to analyze and assess the potential for YQG
to build up its air cargo business in the short, medium and long term.
The report provides reliable figures on which to base subsequent deci-
sions in regard to the development of suitable, economically viable
facilities for air cargo services in line with the market requirements.
The figure below shows the steps that have been carried out to compile the
Market Potential Study and the Air Traffic Forecast. The figure also includes
Phase 2 and 3 of the Feasibility Study.

Figure 1: Lufthansa Consulting project approach


1 2 3
Conceptual Planning Detailed Design and
Market Potential Study and
Study and Financial Implementation
Forecast
Viability Analysis Management
Go / no go decision

Develop GDP
Research

Define Market
Determine Relevant driven Traffic Consider Impacts Use Forecast
Share for YQG
Air Cargo Market Forecast for the of Influence Model to project
and create a base
for YQG Relevant Air Factors on YQG YQG Cargo
forecast
Cargo Market Volumes

Source: Lufthansa Consulting

The Market Potential Analysis takes into account all factors having an impact
on the demand and supply situation for Windsor International Airport and
forecasts cargo traffic over the next twenty five years (2009-2034). The re-
sults show that YQG building on its strengths has the potential to suc-

Market Potential Analysis for Windsor International Airport

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cessfully develop its air cargo business. An enlarged business base, but also
the implementation of specific influence factors will enable Windsor to be-
come a true full service airport.

Lufthansa Consulting evaluated a catchment area of 350 km around Wind-


sor International Airport. Eight airports within this radius, considered the
most important in the region in terms of air cargo, and YQG have been de-
fined as Relevant Air Cargo Market. A GDP-driven base forecast for the
Relevant Market has been calculated.

To derive a base forecast for YQG only, Lufthansa Consulting has made
logical and profound assumptions on the market share development of YQG
for the following air cargo segments (see chapter 6.3 and Annex I) respec-
tively for inbound and outbound traffic:

International Scheduled Cargo


Domestic Scheduled Cargo
International Charter Cargo
Domestic Charter Cargo
International Integrator
Domestic Integrator
International Road Feeder Services - RFS (Trucking)
Domestic Road Feeder Services - RFS (Trucking)

Since the base forecast for Windsor does not consider the local and regional
influence factors it has been modified and substantiated by taking specific
influence factors (determinants) into account that are a precondition for air
cargo development at YQG:

Specific micro-economic influence factors

Development of Air Cargo Related Facilities


Development of Distribution Centers
Implementation of Airline Marketing / Air Service Development Initiatives

Specific macro-economic influence factors

Establishment of a U.S. Pre-Clearance Facility


Stimulus Packages and Local Business Development

How the different influence factors affect the air cargo forecast is outlined in
chapter 6.2.

To a large degree, air cargo traffic relies on scheduled, frequent passenger


services in hub-and-spoke as well as in point-to-point traffic. YQG is present-
ly suffering from a lack of scheduled uplift capacity. The volume currently
transported is almost entirely based on the occasional charter flight. As a

Market Potential Analysis for Windsor International Airport

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result, YQG is not being recognized as a cargo airport by either forwarders
or shippers. Field research has shown that shippers would be inclined to
ship through YQG if cargo capacity were provided on a regular basis. The
demand for cargo capacity by local and regional shippers adds to the attrac-
tion of YQG for cargo and passenger airlines. However, the growth of the air
cargo business at YQG is likely to be initially based on Cargo Charters and
truck-based services for transit shipments. Onward transportation by truck
may occur on road feeder service or flying trucks, in which a truck substi-
tutes a flight.

YQG is presently handicapped in its cargo development as it lacks specific


cargo handling and storage facilities. The ability to handle cargo is rudimen-
tary and not in line with international handling practices. The establishment
of a modern, efficient Air Cargo Terminal to accommodate general and spe-
cial cargo (e.g. perishables, valuable cargo) with supporting facilities and
distribution centers (e.g. for forwarders and logistical service providers)
would be a major step for YQG towards becoming a full-service airport. It
would also improve the competitive position of YQG and be a prerequisite in
attracting cargo business to YQG. Further, the establishment of an inte-
grated Pre-Clearance Facility for cargo intending to cross the Canadian-US
border will serve to significantly increase the air cargo opportunities.

All identified influence factors have been defined for three different scenarios
to project the air cargo forecast for YQG in a comprehensive market model:

Optimistic Scenario describing the best possible future development


Conservative Scenario describing the worst possible development
Most Likely Scenario with the highest probability for realization from to-
days point of view representing the most probable development path. It
is based on current expectations and the most viable forecast for the fu-
ture development.

Market Potential Analysis for Windsor International Airport

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Figure 2: Data for total forecast all three scenarios
metric t ons
100, 000
90, 000
80, 000
70, 000
60, 000
50, 000
40, 000
30, 000
20, 000
10, 000
0
2011

2014

2016
2017

2019
2020

2022

2025

2028

2030

2033
2009
2010

2012
2013

2015

2018

2021

2023
2024

2026
2027

2029

2031
2032

2034
Total Cargo Most Likely Total Cargo Cons ervat ive Total Cargo Optimistic

Source: Lufthansa Consulting

In the most likely scenario the impacts result in an average growth rate of
28.17% (for the forecast period 2009-2034) which is based on the fact that
Windsor International Airport starts off the cargo business with a very low
volume. It is expected that the total cargo tonnage at Windsor International
Airport will grow from 161 tons in 2009 to 79,708 tons in 2034. It is assumed
that Road Feeder Services (RFS) and Charter Traffic create the majority of
the cargo tonnage for YQG. The dominance of the forecasted cargo tonnage
that is created by RFS reflects the role of Windsor as a transit location for
cargo being unloaded from trucks crossing the border between the U.S. and
Canada.

Figure 3: Data for Most Likely Scenario Comparison of Segments


Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

Scheduled Cargo - Most Likely Charter Cargo - Most Likely Integrator Cargo - Most Likely RFS (Trucking) - Most Likely

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

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Considering the remarkable business forces and competition surrounding
the issue of air cargo potential for YQG, it is important to point out that cer-
tain steps will have to be taken to realize this potential as set out above.

The results of the Market Potential Analysis form the basis for the subse-
quent phases of the Feasibility Study: the Conceptual Planning Study and
Financial Viability Analysis (Phase 2) as well as the Detailed Design and
Implementation Management (Phase 3). Based on the positive outcome of
this analysis, Lufthansa Consulting recommends that Windsor International
Airport proceed with developing the business case, infrastructure and facili-
ties to meet the air cargo market potential in this region. YQGs most likely
market forecast carries great potential of proving a successful business case
for a nucleus of an expanding air cargo logistics infrastructure or Air Cargo
Village at YQG. Phase 2 will also aim to identify and support the investment
decisions for a terminal or facility operator based on the financial viability of
this project.

Market Potential Analysis for Windsor International Airport

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2. Introduction

Owing to its traditions, the rich industrial history and the requirements of a
global economy, the City of Windsor has clearly foreseen the need to up-
grade its aviation infrastructure and to increase the available uplift, as these
are prerequisites for high-quality, time-sensitive transportation of passengers
and cargo. But quality air transportation for passengers and cargo has to
take into account the entire journey from the point of origin to the final desti-
nation.
Any kind of infrastructure upgrade, airport promotion or such, needs to be in
line with the development of the specific market, i.e. expensive efforts to
upgrade or market an airport should have a sound basis rooted in the expe-
rience and expectations of the players in the industry.

Lufthansa Consulting has been entrusted with establishing this basis or Mar-
ket Potential Analysis, which takes into account all the factors that have an
impact on the demand and supply situation for Windsor International Airport.
Elements of the study are:

Development in the state and country; political, macro-economic and


demographic factors
Analysis of the situation and future developments of competing modes of
transportation
Analysis of the situation and future developments of competing airports;
definition of relevant airports competing for air traffic
Analysis of domestic and international air and road transport volumes in
the past
Forecast of Market Potential (Conservative, Most likely and Optimistic
Scenario).

The focal point of this Market Potential Analysis is the forecast for cargo
traffic, which is given for 25 years (2009-2034), allowing the decision-makers
to devise and implement a phased, capacity-related development scheme,
thereby minimizing expenditure and risk. The advantages are manifest: in-
vestments can be made based on revenues accrued from previous devel-
opment phases; investments can be pinpointed and fine-tuned to reflect
actual traffic and other developments (e.g. Cargo Village) allowing for more
accurate and tailor-made spending; investors (e.g. under a PPP scheme)
can be attracted more easily as revenue streams correlate with anticipated
traffic volumes.

This report provides a summary of all findings and conclusions of Lufthansa


Consulting. It is intended to be the basis for the subsequent phases of the
Feasibility Study.

Market Potential Analysis for Windsor International Airport

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3. Methodology

The following chapter contains a description of the methodology applied by


Lufthansa Consulting in the course of this study. The Market Potential and
Forecast Study have been defined as Phase 1 of a comprehensive Feasibili-
ty Study for Windsor International Airport.

The figure below shows the steps that have been carried out to compile the
Market Potential Study and the Air Traffic Forecast. The figure also includes
Phase 2 and 3 of the Feasibility Study.

Figure 4: Lufthansa Consulting project approach


1 2 3
Conceptual Planning Detailed Design and
Market Potential Study and
Study and Financial Implementation
Forecast
Viability Analysis Management
Go / no go decision

Develop GDP
Research

Define Market
Determine Relevant driven Traffic Consider Impacts Use Forecast
Share for YQG
Air Cargo Market Forecast for the of Influence Model to project
and create a base
for YQG Relevant Air Factors on YQG YQG Cargo
forecast
Cargo Market Volumes

Source: Lufthansa Consulting

The steps shown will be described in detail in the following chapters.

3.1 Research

A two week on-site visit in Windsor was performed by a team of


Lufthansa Consulting experts during calendar week 13 and 14 in 2009. The
interview partners who were approached in the course of this project and the
findings of the discussions with these experts provided a comprehensive
picture of the current status of Windsor International Airport and its opera-
tions, as well as the respective developments which are to be expected. This
insight into the current situation (including -amongst others- the shortcom-
ings of the existing infrastructure and the expectations for future develop-
ments) represents an important basis for any considerations regarding the
future development potential of the airport.

44 interviews were conducted in Windsor, Toronto, Detroit, at a trade con-


vention in Las Vegas and at other locations. The Lufthansa Consulting ex-
perts conducted interviews with airlines, shippers, forwarders, and govern-
ment agencies in order to gain a broad and comprehensive picture of the

Market Potential Analysis for Windsor International Airport

15
future developments and potentials in the regional and international aviation
market. As one outcome of the interviews Annex II (page 117) includes
some exemplary routings for shipments originating from or destined for the
Windsor region.

The results were based on a multitude of current micro and macro-economic


data that were thoroughly analyzed by using econometrical models and by
taking advantage of Lufthansa Consultings various data bases and expe-
rience gained in similar projects. Thus, the information collected and gener-
ated during this project phase has been compared and enriched with Luf-
thansa Consultings extensive experience in the Canadian aviation market in
order to derive a comprehensive picture of the outlook for Windsor Interna-
tional Airport.

3.2 Determine Relevant Air Cargo Market

To determine the Relevant Air Cargo Market Lufthansa Consulting has eva-
luated a catchment area of 350 km around Windsor International Airport. All
airports within this radius have been analyzed by the Lufthansa Consulting
experts. Eight airports that are the most important in the region in terms of
air cargo, apart from YQG, were selected. The air cargo tonnage in 2008
that was handled at these eight airports together with YQGs tonnage was
defined as the Relevant Air Cargo Market. The following eight airports were
chosen of which four airports are situated in the U.S. and four airports in
Canada.

Figure 5: 2008 market shares within the Relevant Air Cargo Market

London (YXU)
Detroit Willow Run 0%
<1%
(YIP) Toledo (TOL) Total Tonnage 2008:
13% 27% 1,326,173 metric tons
(Export & Import)
Bishop Airport
(FNT)
1%

Toronto Ham ilton


7%
Toronto (YYZ)
Waterloo (YKF)
36%
0%
<1%
Windsor (YGQ)
0%
<1%
Detroit (DTW)
16%

Source: Data collected from the respective airports

Market Potential Analysis for Windsor International Airport

16
3.3 GDP driven base forecast for the Relevant Market

In general a close relation between the development of a countrys economic


growth, as shown by the GDP growth and the development of the air cargo
volumes of this country can be identified. Nevertheless, for deeper analysis it
has to be realized that this correlation is highly dependent on many factors
exceeding the development of the GDP of this country. While there are cer-
tain rules of thumb that could be applied to the correlation between air cargo
traffic growth and economic growth, it is important to understand the specific
correlation of these two factors in each separate market.

As each market environment is different, an in-depth analysis should be


undertaken of the actual correlation between the growth rates observed.
This can be done by analyzing the historic timelines of the traffic and eco-
nomic development of the target country or airport using a regression analy-
sis method. Based on these findings a multi-variable formula can be derived,
representing the interdependency of the two factors with the highest correla-
tion factors possible.

The historical tonnage development of the Relevant Market for the last 10
years (from 1999 to 2008) has been compared to the historical development
of the following GDP figures by carrying out a regression analysis.

GDP Canada
GDP USA
GDP NAFTA
GDP EU
GDP Asia Pacific
GDP World

Based on the regression analysis a base forecast for the Relevant Market
until 2034 has been calculated. The base forecast for the Relevant Market is
only GDP-driven. Local and regional influence factors have been considered
in the detailed air cargo forecast for YQG at a later stage.

Market Potential Analysis for Windsor International Airport

17
Figure 6: Air Cargo Base Forecast for the Relevant Market 2009-2034
metric tons
2,000,000

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Source: Lufthansa Consulting

3.4 Definition of Market Share for Windsor International Airport


and creation of base forecast

YQG is part of the Relevant Market and based on different influence factors
will reach a certain market share within this market. The Lufthansa Consult-
ing experts have made logical and profound assumptions on the market
share development of YQG within the relevant market for the following air
cargo segments. All segments have been defined for inbound and outbound
cargo respectively.

International Scheduled Cargo


Domestic Scheduled Cargo
International Charter Cargo
Domestic Charter Cargo
International Integrator
Domestic Integrator
International RFS (Trucking)
Domestic RFS (Trucking)

Integrators are the only logistic providers who offer all services, which are
traditionally handled by the forwarders, transportation companies, customs
brokers and airlines, out of one hand. The integrative organization and the
quick handling of cargo in a well-established network are the most important
factors for their customers. Usually all express companies, such as FedEx,
DHL, TNT etc. are referred to as Integrators.

A Road Feeder Service (RFS) is a truck which substitutes a flight. This


transportation mode is especially popular in Europe, where the RFS is orga-
nized by an airline, while the operation is done by forwarding or trucking

Market Potential Analysis for Windsor International Airport

18
companies. The RFS operates under a real flight number, is defined by ori-
gin and destination and certain on and off-block times. Even the Airway
Bills (AWB) show the truck flight number and the exact origin and destina-
tion.

All defined market shares have been applied to the Relevant Market to re-
ceive a base line forecast for YQG. This forecast does not consider other
local and regional influence factors. These have been considered in the fol-
lowing step.

Figure 7: Air Cargo Base Forecast for YQG 2009 to 2034


metric tons
35,000

30,000

25,000

Total
20,000
Outbound
15,000 Inbound

10,000

5,000

0
2009

2014
2010
2011
2012
2013

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

19
3.5 Consider impacts of influence factors on YQG

For this study Lufthansa Consulting has used a complex methodological


approach based on a composition of various activities. A fundamental basis
was extensive desk research and numerous interviews (see chapter 3.1)
concerning specific macro and micro-economic influence factors relevant for
the development of the air cargo traffic at Windsor International Airport. The
following specific micro and macro-economic influence factors have been
identified.

Specific micro-economic influence factors:


Development of Air Cargo Related Facilities
Distribution Centers
Airline Marketing / Air Service Development

Specific macro-economic influence factors:


Pre-Clearance Facility
Stimulus Packages and Local Business Development

The characteristics of each influence factor are further described in chapters


6.1 and 6.2.

3.6 Use Forecast Model to project YQG Cargo Volumes

The planning and development of Windsor International Airport is influenced


by the specific market environment an environment being characterized by
a high degree of uncertainties and ongoing developments. As a conse-
quence a high degree of flexibility had to be integrated into all data evalua-
tion and assessment phases.

In order to account for this framework and its inherent complexity, Lufthansa
Consulting has followed its Market Model Technique to integrate, verify and
double-check data provided by and collected from numerous sources. This
technique is carried out with a sophisticated Microsoft Excel based tool
that allows adjusting and testing of specific market developments and simu-
lates their effects on the aviation industry.

Market Potential Analysis for Windsor International Airport

20
Figure 8: Screenshots Lufthansa Consulting Market Model Technique 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total Cargo M ost Likely 161 263 7,391 14,488 18,133 19,718 26,121 30,396 35,283 38,913 41,173 48,500

Assumptions Forecast Total Cargo Conservative

Forecast Summary
Total Cargo Optimistic

Inbound Most Likely


161
161

93
245
265

111
5,975
10,393

3,789
11,023
18,916

9,528
12,859
27,461

11,587
14,642
30,516

12,386
17,240
34,746

14,718
18,206
37,357

15,999
19,542
43,106

18,542
22,130
46,076

20,458
24,459
53,596

21,660
31,822
56,671

25,099
Inbound Conservative 93 111 3,144 7,155 8,064 8,893 10,451 11,047 11,828 13,237 14,487 18,843
Inbound Optimistic 93 111 5,699 12,380 14,835 16,431 18,529 19,940 22,931 24,522 27,744 29,287

Outbound Most Likely 68 152 3,603 4,960 6,546 7,333 11,403 14,397 16,742 18,455 19,513 23,401
Outbound Conservative 68 134 2,832 3,868 4,795 5,749 6,789 7,159 7,714 8,893 9,971 12,979
Outbound Optimistic 68 154 4,695 6,535 12,626 14,085 16,217 17,418 20,176 21,554 25,852 27,384

International Most Likely 154 256 5,744 8,284 11,285 12,270 17,980 21,448 25,344 27,964 28,511 34,126
International Conservative 154 238 4,328 6,259 7,532 8,594 10,569 10,933 11,297 12,708 14,352 20,345
International Optimistic 154 258 8,746 11,869 19,823 22,185 25,793 27,588 32,336 34,285 40,291 41,334

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 12,662 14,374
Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477
Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337

Scheduled Cargo Most Likely 7 7 11 1,151 2,028 2,158 2,448 2,665 4,027 4,075 4,165 5,540
Scheduled Cargo Conservativ 7 7 11 611 979 1,375 1,784 1,805 1,831 2,040 2,137 3,826
Scheduled Cargo Optimistic 7 7 1,511 2,331 2,761 3,083 3,142 3,367 3,411 4,778 4,876 4,934

Charter Cargo Most Likely 154 256 964 1,278 1,693 1,876 3,962 5,329 5,460 5,593 5,728 5,865
Charter Cargo Conservative 154 238 588 766 1,174 1,590 1,804 1,963 2,054 2,146 2,271 2,367
Charter Cargo Optimistic 154 258 1,566 1,808 5,151 5,377 8,690 8,932 9,130 9,307 9,487 9,668

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 0


Integrator Cargo Conser vative 0 0 0 0 0 0 0 0 0 0 0 0
Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704

Trucked Cargo Most Likely 0 0 6,416 12,058 14,411 15,684 19,711 22,401 25,797 29,245 31,280 37,095
Trucked Cargo Conservative 0 0 5,376 9,646 10,706 11,677 13,652 14,437 15,657 17,944 20,051 25,629
Trucked Cargo Optimistic 0 0 7,316 14,777 19,549 22,056 22,914 25,058 30,566 31,991 37,595 40,364

Cargo Forecast YQG Most Likely Scenario


Regression
Cargo Forecast YQG Most Likely Scenario
Cargo Forecast YQG Optimistic Scenario

Forecast Growth
Rates Overview

Macro Determinants Most Likely Scenario Micro Determinants Most Likely Scenario

Macro Determinants Conservative Scenario Micro Determinants Conservative Scenario

Macro Determinants Optimistic Scenario Micro Determinants Optimistic Scenario

Historic Data

GDP Forecast
Forecast Competing Airports

Source: Lufthansa Consulting

All identified influence factors have been defined for three different scenarios
to project the air cargo forecast for YQG in a comprehensive market model:

Optimistic Scenario describing the best possible future development


Conservative Scenario describing the worst possible development
Most Likely Scenario with the highest probability for realization from to-
days point of view representing the most probable development path

The scenario technique is a method to consolidate different realistic possible


developments or development corridors of certain environmental factors into
complex models, which represent a broad bandwidth of possible and proba-
ble pictures of the future. Using the scenario technique, quantitative data
and information is combined with qualitative information, estimations and
opinions. Thus the results are detailed descriptions of one or several possi-
ble future situations.

Market Potential Analysis for Windsor International Airport

21
Figure 9: From Base Forecast to three different scenarios for YQG

Base Forecast for YQG Air Cargo Tonnage Lufthansa Consulting Market Model
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Total Cargo Most Likely 161 263 7,391 12,078 14,202 15,058 22,082 30,208 33,767 38,705 39,922 48,025 52,944 54,766 56,774 58,703 60,665 62,197 66,068 67,921 69,804 71,726 73,604 75,512 77,884 79,440
Total Cargo Conservative 161 370 5,976 9,314 10,093 11,067 16,659 18,098 19,433 22,051 24,347 31,709 33,030 35,710 38,521 40,242 41,994 43,316 44,895 47,548 49,201 50,889 52,530 54,199 57,889 59,217
Total Cargo Optimistic 161 265 14,348 21,207 25,218 27,545 34,555 38,490 44,253 45,910 54,091 57,172 62,199 64,127 66,242 68,280 72,430 74,095 77,061 79,038 81,047 83,096 85,103 87,141 89,646 91,335

Inbound Most Likely 93 111 3,789 8,128 9,269 9,778 13,738 15,907 17,786 20,356 21,037 24,840 27,386 28,378 29,531 30,612 31,710 32,560 34,599 35,632 36,681 37,753 38,798 39,861 41,192 42,049

metric tons
Inbound Conservative 93 111 3,144 6,105 6,566 7,111 10,396 10,992 11,772 13,180 14,430 18,784 19,555 20,984 22,560 23,560 24,579 25,348 26,266 27,725 28,685 29,666 30,619 31,589 33,866 34,640
Inbound Optimistic 93 111 5,269 11,060 13,024 14,246 18,357 20,428 23,425 24,359 27,579 29,120 31,716 32,759 33,962 35,093 37,282 38,194 39,778 40,869 41,978 43,109 44,216 45,339 46,733 47,653

Outbound Most Likely 68 152 3,603 3,950 4,933 5,279 8,343 14,301 15,981 18,349 18,886 23,185 25,559 26,387 27,243 28,092 28,955 29,637 31,469 32,289 33,123 33,973 34,806 35,651 36,692 37,391
Outbound Conservative 68 259 2,833 3,209 3,527 3,957 6,263 7,107 7,661 8,871 9,918 12,925 13,475 14,726 15,962 16,682 17,415 17,968 18,628 19,823 20,516 21,223 21,911 22,610 24,023 24,577
Outbound Optimistic 68 154 9,080 10,147 12,195 13,299 16,199 18,062 20,828 21,551 26,512 28,052 30,483 31,368 32,281 33,187 35,148 35,900 37,283 38,169 39,069 39,987 40,888 41,802 42,913 43,682

35,000 International Most Likely


International Conservative
International Optimistic
154
154
154
256
363
258
5,744
4,329
12,701
5,874
4,550
14,161
7,355
4,767
17,580
7,610
5,019
19,213
13,941
9,988
25,603
21,260
10,825
28,721
23,828
11,188
33,482
27,756
12,629
34,119
28,301
14,241
40,786
33,664
20,233
41,835
37,676
20,680
45,943
38,570
22,466
46,933
39,376
24,122
47,835
40,152
24,723
48,707
40,936
25,333
51,669
41,656
25,877
52,509
44,505
26,468
53,401
45,311
28,110
54,307
46,130
28,734
55,228
46,962
29,369
56,163
47,731
29,938
57,037
48,509
30,514
57,921
49,301
32,142
58,820
50,104
32,750
59,731

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 11,622 14,361 15,269 16,196 17,398 18,552 19,728 20,541 21,563 22,610 23,675 24,765 25,873 27,003 28,583 29,336
Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477 12,350 13,243 14,400 15,519 16,662 17,440 18,427 19,439 20,467 21,521 22,593 23,685 25,747 26,468
Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337 16,256 17,194 18,407 19,573 20,761 21,585 23,659 24,730 25,819 26,933 28,066 29,220 30,826 31,604

Scheduled Cargo Most Likely 7 7 11 151 216 222 2,388 2,604 2,639 3,997 4,086 4,134 5,509 5,577 5,640 5,705 5,770 5,839 5,905 5,976 6,044 6,117 6,186 6,256 6,755 6,404

30,000
Scheduled Cargo Conservativ 7 7 11 11 11 155 1,749 1,770 1,795 2,003 2,100 3,789 3,833 3,881 3,926 3,971 4,016 4,065 4,111 4,162 4,209 4,261 4,310 4,359 4,836 4,463
Scheduled Cargo Optimistic 7 7 11 214 217 306 3,030 4,580 4,639 4,694 5,454 5,519 6,910 6,994 7,074 7,155 7,236 7,322 7,404 7,492 7,577 7,668 7,755 7,843 8,359 8,027

Charter Cargo Most Likely 154 256 964 1,038 1,210 1,386 2,047 5,291 5,421 5,553 5,688 5,825 5,963 6,351 6,681 6,902 7,127 7,355 7,588 7,825 8,066 8,312 8,485 8,660 8,839 9,020
Charter Cargo Conservative 154 363 589 767 935 1,139 1,316 1,950 2,040 2,163 2,257 2,353 2,451 2,809 3,080 3,260 3,443 3,630 3,821 4,015 4,214 4,416 4,545 4,675 4,809 4,944
Charter Cargo Optimistic 154 258 4,088 4,199 7,493 7,749 8,609 8,851 9,047 9,223 9,402 9,583 9,765 10,197 10,571 10,837 11,106 11,379 11,657 11,940 12,228 12,521 12,742 12,965 13,193 13,424

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,102 1,114 1,127 1,140 1,153 1,166 1,179 1,192 1,206 1,219 1,233 1,247 1,261
Integrator Cargo Conservative 0 0 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,101 1,114 1,126 1,139 1,152 1,165 1,178 1,191 1,205 1,219 1,232
Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704 1,724 1,744 1,764 1,784 1,805 1,825 1,845 1,866 1,887 1,909 1,931 1,952 1,975 1,997

25,000 Trucked Cargo Most Likely


Trucked Cargo Conservative
Trucked
Outbound Cargo Optimistic 2009 0
0
0
2010 0
0
0
6,416
5,376
10,249
2011
10,888
8,536
16,794
2012
12,776
9,147
17,509
2013
13,449
9,773
19,490
2014
17,647
13,594
22,916
2015
22,313
14,379
25,060
2016
25,707
15,598
30,567
2017
29,154
17,884
31,993
2018
30,148
19,990
37,596
2019
36,989
25,567
40,366
2020
40,383
26,747
43,799
2021
41,736
27,943
45,192
2022
43,338
30,426
46,833
2023
44,969
31,910
48,505
2024
46,629
33,421
52,284
2025
47,850
34,494
53,569
2026
51,410
35,824
56,154
2027
52,942
38,219
57,739
2028
54,502
39,613
59,354
2029
56,092
41,034
60,998
2030
57,714
42,484
62,676
2031
59,362
43,960
64,380
2032
61,043
47,026
66,119
2033
62,754
48,577
67,887
2034
International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

20,000 International RFS (Trucking)


Domestic RFS (Trucking)
Inbound
0.00%
0.00%
0.00%
0.00%
1.00%
0.50%
1.00%
0.65%
1.00%
0.80%
1.00%
0.95%
1.10%
1.10%
1.25%
1.25%
1.50%
1.50%
1.75%
1.75%
1.90%
1.90%
2.10%
2.10%
2.30%
2.30%
2.50%
2.50%
2.75%
2.75%
3.00%
3.00%
3.25%
3.25%
3.40%
3.40%
3.60%
3.60%
3.80%
3.80%
4.00%
4.00%
4.20%
4.20%
4.40%
4.40%
4.60%
4.60%
4.80%
4.80%
5.00%
5.00%

International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

15,000 Domestic RFS (Trucking)

Optimistic Scenario
0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Outbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

10,000 International RFS (Trucking)


Domestic RFS (Trucking)
Inbound
0.00%
0.00%
0.00%
0.00%
1.00%
0.50%
1.00%
0.65%
1.00%
0.80%
1.00%
0.95%
1.10%
1.10%
1.25%
1.25%
1.50%
1.50%
1.75%
1.75%
1.90%
1.90%
2.10%
2.10%
2.30%
2.30%
2.50%
2.50%
2.75%
2.75%
3.00%
3.00%
3.25%
3.25%
3.40%
3.40%
3.60%
3.60%
3.80%
3.80%
4.00%
4.00%
4.20%
4.20%
4.40%
4.40%
4.60%
4.60%
4.80%
4.80%
5.00%
5.00%

International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

5,000 Domestic RFS (Trucking)

Conservativ Scenario
0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Outbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0 International RFS (Trucking)


Domestic RFS (Trucking)
Inbound
0.00%
0.00%
0.00%
0.00%
1.00%
0.50%
1.00%
0.65%
1.00%
0.80%
1.00%
0.95%
1.10%
1.10%
1.25%
1.25%
1.50%
1.50%
1.75%
1.75%
1.90%
1.90%
2.10%
2.10%
2.30%
2.30%
2.50%
2.50%
2.75%
2.75%
3.00%
3.00%
3.25%
3.25%
3.40%
3.40%
3.60%
3.60%
3.80%
3.80%
4.00%
4.00%
4.20%
4.20%
4.40%
4.40%
4.60%
4.60%
4.80%
4.80%
5.00%
5.00%

International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%
International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%
Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%
Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Macro and Micro economic influence Factors Three Air Cargo Forecast Scenarios
1 Development of Air Cargo metric tons
Related Facilities 100,000

90,000
Micro

80,000

2 Distribution Centers 70,000

60,000

50,000

Airline Marketing / Air Service 40,000


3
Development 30,000

20,000

10,000

1 Pre-Clearance Facility 0
Macro

09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20

Total Cargo Most Likely Total Cargo Conservative Total Cargo Optimistic
Stimulus Packages and Local
2 Business Development

Source: Lufthansa Consulting

The three scenarios as shown above are specifically presented in detail in


chapter 6.3 and Annex I (page 106).

Market Potential Analysis for Windsor International Airport

22
4. Economic Environment

This chapter contains a basic survey of Canadas economy. For the sake of
the Forecast, the Relevant Air Cargo Market for Windsor International Airport
has been determined to encompass the eight most important airports within
a 350 km radius around YQG (compare Chapter 3.2). These airports are
mostly situated in Ontario and Michigan, the two states which are also the
most important in cross-border trading and traffic. Therefore Ontarios and
Michigans economy are described in detail. In addition the economic envi-
ronment for Windsor-Essex County as a generator and recipient of air cargo
for YQG is presented.

4.1 Economic characteristics of Canada

The following economic characteristics of Canada will be focused on:

Gross Domestic Product


Demographic structure
Foreign Direct Investments (FDI)

Figure 10: Map of Canada showing YQG

YQG

Source: The Atlas of Canada

Market Potential Analysis for Windsor International Airport

23
4.1.1 Gross Domestic Product of Canada

Canadas nominal Gross Domestic Product has grown constantly over the
last ten years, but the increase has decelerated. In 2008 Canada had a no-
minal Gross Domestic Product of CAD 1,600 bn. Figure 11 shows the devel-
opment of Canadas nominal GDP within the last ten years.

Figure 11: Nominal GDP of Canada 1998 to 2008


Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Nominal GDP
915 982 1,077 1,108 1,153 1,213 1,291 1,374 1,449 1,533 1,600
bn CAD

Source: Deutsche Bank Research (2009)

The nominal GDP growth decreased during the last nine years. But a fore-
cast of Global Insight predicts an increase in 2009 that will last until 2011.
The development of Canadas nominal GDP is shown in the figure below.

Figure 12: Canadas nominal GDP growth 1999 to 2033


6,00%

5,00%

4,00%

3,00%

2,00%

1,00%

0,00%
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033
-1,00%

-2,00%

-3,00%

-4,00%

Source: Global Insight

In 2008, the industry sector (29.6%), the service sector (20.1%), the finance,
insurance and real estate sector (20.1%) as well as the health care and so-
cial assistance sector (6.5%) accounted for the major parts of Canadas
GDP (Figure 13).

Market Potential Analysis for Windsor International Airport

24
Figure 13: Canadas GDP structure 2008

Others
Goods producing
24%
industries
29%

Health care and


social assistance
7%

Finance, insurance Services producing


& Real Estate industries
20% 20%

Source: Statistics Canada

4.1.2 Demographic Structure of Canada

Canada has a population density of 3.3 people per square kilometer, which
is one of the lowest population densities in the world. In 2001, most of Can-
adas inhabitants lived near the border of the United States, as shown in
Figure 14.

Figure 14: Population density of Canada


Population Density by
Census Division
(persons / square
kilometre)

Less than 0.1

0.1 - 0.9

1 - 4.9

5 - 19.9

20 - 49.9

50.0 - 150

Greater than 150

Source: The Atlas of Canada (2009)

Canadas cities with the highest populations are Toronto (5,509.9 thousand
inhabitants), Montral (3,695.8 thousand inhabitants) and Vancouver

Market Potential Analysis for Windsor International Airport

25
(2,285.9 thousand inhabitants). Windsor is Canadas 14th largest city with
331.1 thousand inhabitants.

Figure 15: Top 15 cities in Canada 2009


# of inhabitants Real GDP Growth
Name Adm. [%] 2010*-2013*
(thousands )

1 Toronto ONT 5,509.9 4.1

2 Montral QUE 3,695.8 2.7

3 Vancouver BC 2,285.9 3.1

4 Ottawa ONT 1,168.8 2.9

5 Calgary ALTA 1,139.1 3.7

6 Edmonton ALTA 1,081.3 3.6

7 Qubec QUE 728.9 2.5

8 Hamilton ONT 720.4 3.1

9 Winnipeg MAN 712.7 2.6

10 London ONT 469.7 2.4

11 Kitchener ONT 468.0 3.4

12 St. Catharines ONT 395.8 2.0

13 Halifax NS 385.5 2.4

14 Windsor ONT 331.1 2.3

15 Victoria BC 337.4 2.4


Source: Statistics Canada, *Forecast

4.1.3 Foreign Direct Investments of and in Canada

If a parent enterprise owns 10% or more (IMF definition) of an incorporated


foreign affiliate this share is defined as Foreign Direct Investment (FDI) in
the foreign country. Growing FDI is a positive indicator for dynamic globali-
zation activities including an exchange of knowledge and technology. Coun-
tries, regions or cities with high FDI are characterized by increased transpor-
tation activities. Therefore a high FDI is an important indicator for a positive
air cargo environment.

Canadas in and out flow FDI rose steadily (average growth inflow of USD
31.4 m, outflow USD 47.2 m) within the last five years. In 2007 a decrease in
outgoing investments was recorded.

Market Potential Analysis for Windsor International Airport

26
Figure 16: Development of Canadas in and out flow FDI 2004 to 2008
700,00

600,00

500,00
US $ millions

400,00
Inflow
Outflow
300,00

200,00

100,00

0,00
2004 2005 2006 2007 2008

Source: Statistics Canada

Dividing Canadas FDI in industry sectors, it is visible that 34% of all invest-
ments are made in the energy and metallic minerals industry (CAD 171,899
m in total). 18.7% are invested in the finance and insurance industry (CAD
94,506 m).

Figure 17: FDI in Canada by industry 2008


Wood & Paper
Industry, 3.3%

All other industries,


24.2%

Energy & Metallic


Minerals Industry,
34.0%

Services & Retailing


Industry, 10.20%

Machinery &
Transportation
Equipm ent Industry,
Finance & Insurance 9.6%
Industry, 18.7%

Source: Statistics Canada

The countries that were contributing the most FDI in Canada in 2008 are
shown in Figure 18. The United States is with 57% the country with the most
FDI in Canada.

Market Potential Analysis for Windsor International Airport

27
Figure 18: FDI in Canada by geographical area 2008

United Kingdom
11%

Other European
countries
United States 16%
57%

Japan
3%

Rest of the world


13%

Source: Statistics Canada

Dividing Canadian FDI by industry sectors, a remarkable 49.9% was in-


vested in the finance and insurance industry in 2008 whereas in comparison
just 18.7% was invested from foreign countries in the Canadian finance and
insurance sector. This leads to a difference of CAD 223,573 m.

Figure 19: Canadian FDI abroad by industry 2008


Wood & Paper
All other industries,
Industry, 2,0%
10,8%
Energy & Metallic
Minerals Industry,
22,7%
Services & Retailing
Industry, 10,90%

Machinery &
Transportation
Equipment Industry,
3,7%

Finance & Insurance


Industry, 49,9%

Source: Statistics Canada

In 2008, the most important country for outward FDI from Canada was the
USA (FDI of USD 310,708 m). Canada invested USD 637,281 m in total in
the U.S.

Market Potential Analysis for Windsor International Airport

28
Figure 20: Canadian FDI abroad by geographical area 2008
United States
48.76%

United Kingdom
8.49%

Other European
countries
12.99%
Japan
Rest of the world 0.48%
29.28%

Source: Statistics Canada

Market Potential Analysis for Windsor International Airport

29
4.2 Economical characteristics of Ontario

Ontario is Canadas second largest province, covering the area of more than
one million square kilometers. Windsor is located in the South of Ontario,
close to Ontarios large lakes and rivers. The lakes and rivers hold about one
third of the worlds fresh water, therefore Ontario is considered as the Land
of Water.

Figure 21: Map of Ontario

YQG

Source: The Atlas of Canada

Figure 22: Ontario and its geographical regions


Land and Freshwater Area (in sqkm)
Land 917,714
Freshwater 158,654
Total area 1,076,395
Total land in census farms (%) 5.9
Source: Office of Economic Policy, Ontario Ministry of Finance

4.2.1 Gross Domestic Product of Ontario

The GDP indicator, as the basic consolidated indicator extending the charac-
teristics of economic operation for a defined period, predicts the correlation
of data for all branches and sectors of the economy.

Ontario had a GDP of CAD 494,156 m in 2008, of which 26.5 % were goods
and 73.5 % were services.

Market Potential Analysis for Windsor International Airport

30
Figure 23: GDP structure of Ontario 2008
Transportation & Utilities
Warehousing 3%
4%
Information &
Cultural Finance, Insurance
4% and Real Estate
Construction 23%
5%

Health & Education


11%

Wholesale & Retail Other Services


Trade 21%
12%

Manufacturing
17%

Source: Ministry of Finance

Ontarios Real GDP grew continuously during the last three years. The Con-
ference Board of Canada forecasted an even higher growth for the next four
years up to a Real GDP of CAD 569,356 m.

Figure 24: Ontarios Real GDP 2006 to 2013


m CAD
580,000

560,000

540,000

520,000

500,000

480,000

460,000

440,000
2006 2007 2008 2009* 2010* 2011* 2012* 2013*

Source: The Conference Board of Canada, *Forecast

4.2.2 Trade and Infrastructure of Ontario

The following topics are described in detail in this chapter:

Export Activities of Ontario


Import Activities of Ontario
Infrastructure

Market Potential Analysis for Windsor International Airport

31
Export Activities of Ontario

The value of Ontarios exports in 2008 amounted to CAD 329,388 m, which


included international and interprovincial trade. The following figure shows
the five largest international export markets and the five most exported types
of goods from Ontario in 2008.
With a share of 81.7% the USA is Ontarios largest export market.

Figure 25: Top international export markets of Ontario 2008


United Kingdom
5%
Norway
2%

Mexico
1%

China
1%

United States
Rest of the world
81%
10%

Source: Ontario Ministry of Finance

Motor vehicles and parts are the main products being exported by Ontario
with 35.7%, followed by mechanical equipment (10.6%) and electrical ma-
chinery (5.3%). These figures reflect the total exports from Ontario that are
not related to specific countries.
The total value of Ontarios exports is CAD 336,850 m. Ontario exported
CAD 121,266 m of motor vehicles and parts, CAD 37,054 m of mechanical
equipment and CAD 16,843 m of electrical machinery.

Figure 26: Top international exports of Ontario 2008


Motor vehicles &
parts
29% Mechanical
equipm ent
11%

Precious Metals &


Stones
7%

Electrical m achinery
6%

Plastic Products
4%

Others
43%

Source: Ontario Ministry of Finance

Market Potential Analysis for Windsor International Airport

32
In the first quarter of 2009 Ontario exported goods and services with a value
of CAD 282,972 m of which CAD 176,650 m (62.4%) were international and
CAD 106,322 m (37.6%) were interprovincial.

Import Activities of Ontario

The value of Ontarios imports in 2008 amounted to CAD 325,971 m. Ontar-


ios most important import market is the United States of America with 61%,
followed by China with 9.3%.

Figure 27: Top international import markets of Ontario 2008

China
9%

Mexico
United States 6%
61%
Japan
4%
Germany
2%

Rest of the world


18%

Source: Ontario Ministry of Finance

Most imported parts are motor vehicles and parts (22.2%) with a value of
CAD 72,366 m, followed by mechanical equipment (16.1%) with a value of
CAD 52,481 m and electrical machinery (11.3%) with a value of CAD 36,835
m. These figures reflect total international imports and are not related to
specific countries.

Figure 28: Top international imports to Ontario 2008


Others
45%

Oils & other


petroleum products
4%

Plastic Products
4%

Electrical m achinery
12%
Motor vehicles &
parts
19%

Mechanical
equipm ent
16%

Source: Ontario Ministry of Finance

Market Potential Analysis for Windsor International Airport

33
In the first quarter of 2009 Ontario imported goods and services with a value
of CAD 282,343 m, 12.6% less compared to the first quarter in 2008.

Infrastructure

Ontario provides a multifaceted infrastructure since its lakes and rivers have
historically provided natural travel and trade routes. Additionally canals were
built to link certain lakes and rivers.

On the landside, railways are largely responsible for opening up northern


Ontario and are very important for both passenger and freight services.

Ontario provides more than 16,500 centerline kilometers of provincial high-


ways. Highway 401 for example stretches 820 kilometers from Windsor to
the Quebec border and is one of the busiest roads in the world with an esti-
mated Annual Average Daily Traffic (AADT) of over 500,000 vehicles in
2006 between the Weston Road and Highway 400 interchanges in Toronto.

For many industries the Ambassador Bridge carrying nearly a quarter of


Canada-US Trade in 2008 is the main conduit between the United States
(Detroit) and Canada (Windsor). It is the busiest commercial vehicle border
crossing in North America.

The Detroit River International Crossing (DRIC) initiative has announced the
construction of a new international crossing between Windsor and Detroit for
redundancy and additional capacity for commercial vehicle traffic.

Market Potential Analysis for Windsor International Airport

34
4.2.3 Demographics of Ontario

Ontarios population reached almost 13 m in July 2008, which was 38.8% of


Canadas population. The population density per square kilometer was 13.4.
There was a population increase of 6.6% during 2001 and 2006.
Most people living in Ontario are aged between 25 and 44 (29%), followed
by people aged between 45 and 64 (27%).

Figure 29: Age distribution of Ontario in 2008


65 +
13%
25 to 44
29%

0 to 14
17%

15 to 24
14%
45 to 64
27%

Source: Ontario Ministry of Finance

61,810 people immigrated to Canada in 2008. 45% of them (27,815) immi-


grated to Ontario. Ontario is followed by Quebec and British Columbia (each
18%) as a popular place for immigration.

Figure 30: Immigration to Canada in 2008


Rest of Canada
9%

British Columbia
18%
Ontario
45%

Alberta
10%

Quebec
18%

Source: Based on Ontario Ministry of Finance

Market Potential Analysis for Windsor International Airport

35
4.2.4 Perishable Air Cargo and Ontarios Perishable Trade

The impact of perishable cargo on the study has been adapted within the
running project. Initially it was planned to focus the study on perishable car-
go. Following intense interview sessions with industry leaders from the
greenhouse and farming industry Windsor International Airport and Lufthan-
sa Consulting decided to give the study a broader scope and develop the air
cargo market potential and forecast focusing on all cargo types (general as
well as special cargo such as perishables). However the figures for Ontarios
perishable trade discussed in this chapter have been considered in the air
cargo forecast.

The International Air Transport Association (IATA) defines perishable cargo


as follows: Goods which loose their inherent properties or essential quality
performance when not maintained within certain conditions, elements or
other criteria as defined by their life cycle. The figure below shows an over-
view of the different types of Perishables.

Figure 31: Types of Perishable Air Cargo (PER)

Fruits and Vegetables Bakery

Fresh-Cuts & Prepared Salads Frozen Food

Ornamentals
Seafood and Fish (Cut-Flowers etc.)

Meat and Meat Products Pharmaceutical Products

Others (Spices, Confectionary,


Dairy Products Cosmetics)
Source: IATA Perishable Cargo Regulations

Most of Ontarios products falling under this definition of Perishables are


produced in the agriculture and food industry. The trade within this industry
grew on average by 5.1% per year between 1999 and 2008. Import com-
modities accounted for 66% in 2008 while export commodities only
represented 34% of Ontarios total agri-food trade.

Market Potential Analysis for Windsor International Airport

36
Figure 32: Ontario Agri-Food Trade Development (bn CAD)
30
Average annual growth (AAG): 5.1% Total Trade 2008:
25 CAD 25.784 bn

20
34%
AAG: 5.8%
15
66%
10
AAG: 4.0%

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Import Export Total

Source: Ontario Ministry of Agriculture Food & Rural Affairs

Ontarios most important agri-food trade partner in 2008 was the USA
(71.4% of agri-food trade) followed by the European Union (7.9% of agri-
food trade), Asia (excluding Japan, 7.5% of agri-food trade) and Latin Amer-
ica (excluding Mexico, 4.6% of agri-food trade). Figure 33 gives a detailed
overview of the imported and exported trade shares for Ontarios trade part-
ners in 2008.

Figure 33: Ontario Agri-Food Trade by Region 2008


Total Agri-Food Trade 2008:
CAD 25.784 bn
1,1% 7,5% 1,6%
1,0% United States
1,0%
Mexico
0,6%
0,3% Latin America (excl. Mexico)
7,9% Caribbean

0,4% EU-27

4,6% Other West Europe


Other East Europe
2,7%
Middle East
Africa
Japan

Asia (excl. Japan)


71,4% Oceania

2,6% 7,5% 0,6% Export Agri-Food Trade 2008: 0,2% 7,4% 2,2% Import Agri-Food Trade 2008:
0,5% CAD 9.323 bn 1,3% CAD 16.461 bn
1,5% 0,8%
1,1% 0,3%
0,0% 0,4%
4,9%
0,5% 9,6%
0,4%
0,4%
1,4%

6,9%

67,1%
3,5%

78,9%

Source: Ontario Ministry of Agriculture Food & Rural Affairs

Not all agri-food products can be transported by air. Figure 34 shows Ontar-
ios agri-food trade (in m CAD) divided by commodity groups for 2008. The
commodity groups that are marked include the products that meet the IATA
definition for Perishable Cargo.

Market Potential Analysis for Windsor International Airport

37
Figure 34: Ontarios agri-food trade per commodity group 2008
Commodity Groups
Grain products
Fruit and nuts
Vegetables Import Trade Ontario

Other edible preparations


Beverages Export Trade Ontario
Red m eats
Tropical products (excl. fruit) Total Trade Ontario
Sugar and confectionery
Oilseed products
Anim al feeds
Fish and products
Other anim al products
Oilseeds
Poultry and eggs
Grains
Live anim als
Dairy products
Floriculture and nursery products
Seeds for sow ing
Other agri-food products
Tobacco and products
Vegetable fibres
CAD in m
Commodity groups that meet the 0 500 1000 1500 2000 2500 3000 3500 4000
IATA definition for Perishable Cargo

Source: Ontario Ministry of Agriculture Food & Rural Affairs

The marked commodity groups have been further analyzed regarding their
trade development over the last eight years as shown below.

Figure 35: Ontarios agri-food trade per commodity group 2008


Trade in m CAD Vegetables Trade in m CAD Fruits and Nuts
3,000 3,000
Average annual growth (AAG): 4.0% AAG: 5.9%
2,500 2,500

2,000 2,000
AAG: 5.9%
AAG: 3.7%
1,500 1,500

1,000 AAG: 4.9% 1,000

500 500
AAG: 5.0%
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Fish and Products Trade in m CAD Poultry and eggs
900 AAG: 1.1% 800
800 700
AAG: 3.3%
700 AAG: 2.5% 600
600 AAG: 3.8%
500
500
400 400
300 300
200 200
AAG: -7.4%
100 100 AAG: 2.1%
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Dairy products Trade in m CAD Red Meat


800 2,500
AAG: -1.7% AAG: 4.4%
700
2,000
600 AAG: -0.5%
500 1,500 AAG: 9.9%
400
300 1,000
200
AAG: 0.2%
500
100 AAG: -3.5%
0 0
2001 2002 2003 2004 2005 2006 2007 2008 2001 2002 2003 2004 2005 2006 2007 2008

Import Trade Ontario Export Trade Ontario Total Trade Ontario

Source: Ontario Ministry of Agriculture Food & Rural Affairs

Market Potential Analysis for Windsor International Airport

38
The shown figures on Ontarios perishable trade include products produced
on farms and in greenhouses.

Figure 36: Farm Statistics 2006


Item Ontario
Number of farm operators 82,410
Total number of farms 57,211
Number of farms with sales over CAD 25,000 31,883
Number of farms with sales over CAD 100,000 17,965
Number of farms with sales over CAD 250,000 10,000
Farms reporting under 53 hectares 29,710
Farms reporting 53 to 161 hectares 18,648
Farms reporting 162 hectares and over 8,853
Source: Ontario Ministry of Agriculture Food & Rural Affairs

To put an emphasis on Ontarios exceptional greenhouse industry the follow-


ing paragraphs line out major facts and characteristics.

Ontarios strong greenhouse industry is a very significant part of Ontarios


provincial economy. A study commissioned by the Ontario Greenhouse Al-
liance in 2005 evaluated an impact of the greenhouse industry of CAD 3.8
bn on Ontarios economy in 2004 (CAD 1.1 bn in gross sales, CAD 2.7 bn
additional industrial output and CAD 706 m in income).

In 2003, the major portion of the Canadian floricultural production (52%) was
situated in Ontario. More than half of Canadas total greenhouse production
acreage (51%) was located in Ontario.

Ontario belongs to the largest producers of greenhouse products in North


America. With respect to vegetable production, Ontario has the largest con-
centration of greenhouse vegetable production in North America (approx-
imately 355 hectares around the town of Leamington). It is larger than the
entire corresponding United States industry.

4.2.5 A closer look at the economy of Windsor

Windsors GDP fell during the last two years. Among other reasons this was
caused by the suffering automotive-industry. However starting in 2010, The
Conference Board of Canada has forecasted a moderate GDP growth for
Windsor of 2.2% up to an amount of CAD 12,653 m.

Market Potential Analysis for Windsor International Airport

39
Figure 37: Windors Real GDP growth 2006 to 2013
m CAD
12,800

12,600

12,400

12,200

12,000

11,800

11,600

11,400

11,200

11,000

10,800
2006 2007 2008 2009* 2010* 2011* 2012* 2013*

Source: The Conference Board of Canada, *Forecast

An industry outlook for Windsor shows a high negative growth rate for the
industrial sector of -3.7% in 2009. Total industry has a decline of -0.6% but
all other industry sectors are still growing. The growth forecast for 2010 to
2013 is positive.

Figure 38: Industry Growth Rate Forecast for Windsor 2009 to 2013
4%

3%

2%

1%

0%
Non-com. W&R Trade Transportation Office Industrial Total
-1% Service & Com.

-2%

-3%

-4%

-5%

2009 2010-2013

Source: The Conference Board of Canada

Windsors greatest industry is the manufacturing industry which provides


29.6% (CAD 3437 million) of Windsors total GDP, followed by Commercial
(14.6%) and Non-Commercial Services (13.2%).

Market Potential Analysis for Windsor International Airport

40
Figure 39: Windsors regional GDP by sector 2008
Manufacturing, 29,59%
Others, 14,78%

Wholesale & Retail


trade, 10,05%

Non-Com m ercial
Services, 13,17%

Com mercial Service, Finance, Insurance &


14,56% Real Estate, 17,85%

Source: The Conference Board of Canada

Market Potential Analysis for Windsor International Airport

41
4.3 Economic characteristics of Michigan, USA

Michigan is a mid-western state of the United States of America, which is


named after Lake Michigan. Michigan is the eighth most populous state in
the United States. In the map below the location of Michigan is shown in
respect to Canada.

Figure 40: Map of Michigan

YQG

Windsor

Source: The National Atlas of the United States of America

4.3.1 Gross Domestic Product of Michigan

The Government of Michigan reported a GDP of USD 382,544 m in 2008


and is therefore ranked number 12 compared to other U.S. States as shown
in the figure below.

Market Potential Analysis for Windsor International Airport

42
Figure 41: USAs GDP structure per region - 2008
Rank State GDP in Million USD
1 California 1,846,757
2 Texas 1,223,511
3 New York 1,144,481
4 Florida 744,120
5 Illinois 633,697
6 Pennsylvania 553,301
7 New Jersey 474,936
8 Ohio 471,508
9 North Carolina 400,192
10 Georgia 397,756
11 Virginia 397,025
12 Michigan 382,544
13 Massachusetts 364,988
14 Washington 322,778
15 Maryland 273,333
16 Minnesota 262,847
17 Indiana 254,861
18 Tennessee 252,127
19 Arizona 248,888
20 Colorado 248,603

Source: Bureau of Economic Analysis

Michigans greatest industries are Manufacturing, Government, Finance &


Insurance and Services as shown in the figure below.

Figure 42: GDP structure Michigan 2008

Manufacturing
Others
21%
23%

Wholesale trade Government


5% 15%

Construction
5%
Health care &
Retail trade social assistance
6% 10%
Finance &
Services
insurance
10%
5%

Source: Government of Michigan

Market Potential Analysis for Windsor International Airport

43
4.3.2 Trade and Automotive Industry of Michigan

The following topics are described further in this chapter:

Export Activities
Import Activities
Automotive industry

Export activities

The figure below shows Michigans greatest export partners. Michigan has a
total export volume of USD 98.2 bn. In comparison to Ontario, which exports
91% to the USA, Michigan exports 89% to Canada.

Figure 43: Top international export markets from Michigan 2008

United Kingdom
2%

Canada
89% Germany
2%
Belgium
2%
France
1%
Others
4%

Source: US Census Bureau

A remarkable 26.9% of Michigans export activities were motor vehicle parts


in 2008. 14.4% were motor vehicles.

Figure 44: Michigans Exports by industry parts - 2008


Motor vehicles parts,
26.9%
Natural Gas & Oil,
6.7%

Silicon Parts, 2.3%

Civilian Aircraft
Engines, 1.2%
Passenger vehicles,
14.4%

Other Parts, 48.5%

Source: U.S. Census Bureau

Market Potential Analysis for Windsor International Airport

44
Import Activities

The North American automotive industry, concentrated in Ontario and Michi-


gan, ensures that there are a multitude of opportunities for cross-border
investment, and a strong economic partnership between Canada and Michi-
gan. As a result, interdependence between Canada and Michigan has de-
veloped to the extent that Michigans imports from Canada are equal to the
value of goods Canada exports to the rest of the world outside the United
States. Michigans total imports from Canada are worth USD 48.7 bn.
Most import goods are from the transportation sector (79.7% of total im-
ports), split up into automobiles (50.4%), trucks (15%) and motor vehicle
parts (9%).

Figure 45: Top imports from Canada to Michigan 2004


Metals
4%

Energy
4%
Forest products
3%
Transportation
79% Machinery
2%
Chemicals
2%
Equipment
2%
Agriculture
Others 1%
3%

Source: Canada International

Figure 46: Transportation imports from Canada to Michigan 2004


Others
19%

Natural gas
3%
Motor vehicle
engines & parts Automobiles
4% 50%

Motor vehicle parts


9%

Trucks
15%

Source: Canada International

Market Potential Analysis for Windsor International Airport

45
Automotive Industry

The automotive industry is the major industry of Michigan, which is the lead-
ing auto producing state in the U.S. But the high speculative price of oil be-
came a factor for the U.S. auto industry even before the economic crisis of
2008 began seriously impacting industry revenues.
The following chart shows the continuous rise of the oil price in Michigan
since January 2007.

Figure 47: Oil price development Michigan Jan. 2005 to Jul. 2008

Source: ICIS Pricing

4.3.3 Demographics of Michigan

In 2008, Michigan had a population of approximately 10 m which represents


32% of United States population. The population density is very high with
175 persons per square mile, compared to the United States in total with a
population density of 79.6 persons per square mile.
In Michigan most inhabitants are aged between 19 and 64, hence 57% of
inhabitants are of working age.

Market Potential Analysis for Windsor International Airport

46
Figure 48: Age distribution in Michigan 2008

65 +
13%

19 to 64
0 to 5
57%
6%

6 to 18
24%

Source: US Census Bureau

31% of Michigans inhabitants work in management or as professionals.


26% are employed in the sales and office sector and just 5% work in con-
struction and maintenance.

Figure 49: Michigan main occupations 2008


Production &
transportation
19% Management &
professional
31%

Construction &
maintenance
9%

Service
Sales and office
occupations
occupations
15%
26%

Source: US Census Bureau

Market Potential Analysis for Windsor International Airport

47
4.4 Canadian Trade Development

The Trade Development of Canada is generally positive. Canada holds ex-


cellent relations to Europe and the Asian countries. All kind of goods are
exchanged in both directions import and export. Caused by the proximity
to the U.S. this is Canadas main trading focus and most important trading
market. In 2006 more than CAD 1.7 bn worth of goods and services and
more than 300,000 people crossed the Canada-U.S. border each day includ-
ing land and air crossings. It was estimated that approximately 7.1 m U.S.
jobs were supported by trade with Canada in 2005. Canadas total imports
grew on average 17.5% in the last five years, exports grew on average
15.7%.
The figure below shows the trade development of Canadian import and ex-
port activities in the years 2005 to 2008. In the past Canadas export activi-
ties have been higher than its import activities.

Figure 50: Historic Trade Development in Canada 2005 to 2008


600,00

500,00
Canadian $ millions

400,00

Export
300,00
Import

200,00

100,00

0,00
2005 2006 2007 2008
Source: Foreign Affairs and International Trade Canada

Canadas total imports grew 22% between 2004 and 2008. When divided
into industry sectors, the energy products sector had the highest growth
(114.2%) starting with a value of CAD 24,781.7 m in 2004 up to a value of
CAD 53,071.9 m in 2008.

Market Potential Analysis for Windsor International Airport

48
Figure 51: Canadian import growth by industry sector 2004 to 2008
140,0%

120,0% 114,2%

100,0%

80,0%

60,0%

40,0% 33,2%
24,6%
17,8% 20,5%
20,0%
-9,5% -7,0%
0,0%

Automotive
Industrial Goods
Agricultural &

Machinery &
Products

Products

Other Goods
Forestry

Equipment
Energy

Products
Products

& Materials
Fishing

-20,0%

Source: Statistics Canada

Canadas total exports grew by 14.2% between 2004 and 2008. Regarding
the industry sectors, exports of forestry products and exports of automotive
products declined by -34.9% and -32.4% respectively.

Figure 52: Canadian export growth by industry sector 2004 to 2008


100,0%
84,7%
80,0%

60,0%

43,0%
40,0% 33,2%

20,0%
5,2%
-34,9% 2,1% -32,4%
0,0%
Automotive
Industrial Goods
Agricultural &

Machinery &
Products

Products

Other Goods
Forestry

Equipment
Energy

Products
Products

& Materials
Fishing

-20,0%

-40,0%

-60,0%

Source: Statistics Canada

Market Potential Analysis for Windsor International Airport

49
Canadas exports to the United Kingdom had the highest increase between
2003 and 2008 (84.6%), starting with an export value of CAD 7,695.3 m up
to a value of CAD 14,206.9 m.

Figure 53: Canadian export growth by country 2003 to 2008


120,0%

102,0%
100,0%
84,6%

80,0%
65,3%

60,0% 54,6%

40,0%

21,1%
20,0% 12,4%

0,0%
Japan

Other EU

Other OECD
United Kingdom
USA

Countries

Other Countries
Countries
Source: Statistics Canada

In comparison to the export, Canadas imports from the United Kingdom


increased by 23.3%, starting with a value of CAD 9,183 m in 2003 reaching
a value of CAD 11,321.2 m in 2008.

Market Potential Analysis for Windsor International Airport

50
Figure 54: Canadian import growth by country 2003 to 2008

120,0%
107,6%

100,0%

80,0%

60,0%

39,1%
40,0% 36,1%
23,3%

20,0% 16,8%
9,6%

0,0%
Japan

Other EU

Other OECD
United Kingdom
USA

Countries

Other Countries
Countries
Source: Statistics Canada

4.4.1 Canadas Trade Partners

In 2008, 77.7% of Canadian merchandise exports were destined to the U.S.,


and 52.4% of Canadas imports of merchandise came from the U.S.
The U.S. exported more goods and services to Canada than to any individu-
al country - more than to Japan and Mexico combined in 2008.

The figure below shows Canadas major export markets. As stated above,
the USA is Canadas most important trading partner with exports of CAD
375,492 m in 2008.

Figure 55: Canadas major Export Trading Partners 2008


Rest of the world
14%

Mexico
China 1%
2%

Japan
2%
UK
3%

USA
78%

Source: Statistics Canada

Market Potential Analysis for Windsor International Airport

51
In 2008 Canada imported goods with the value of CAD 433,431 m. The USA
is also Canadas major import partner with a share of 52.4%, followed by
China with 9.8%.

Figure 56: Canadas major Import Trading Partners 2008

Rest of the world


27%

USA
52%
Germany
3%
Japan
4%
Mexico
4%
China
10%

Source: Statistics Canada

4.4.2 Key Export / Import Commodities

Canadas top merchandise exports to the US include mineral fuels and oils
(27.6%), motor vehicles (11.1%), machinery (7.6%), electrical and electronic
equipment (4%) and precious stones & metals.
In the figure below the development over the last four years is listed.

Figure 57: Leading exports in million CAD 2005 to 2008


Commodity 2005 2006 2007 2008

Mineral fuel & oils 88,08 87,874 93,839 133,4

Motor vehicles & parts 78,364 73,521 68,558 53,796

Machinery 33,745 33,949 35,992 36,607

El. Machinery /
20,524 21,013 20,411 19,142
equipment

Prec. Stones & metals 7,379 9,058 10,135 13,962

Source: Statistics Canada

The top imports are machinery (14.7%), motor vehicles (14.6%), mineral
fuels and oils (12.4%), electrical and electronic equipment (9.8%) and plastic
(3.2%).

Market Potential Analysis for Windsor International Airport

52
Figure 58: Leading imports in million CAD 2005 to 2008
Commodity 2005 2006 2007 2008

Machinery 62,305 63,694 62,545 63,543

Motor vehicles & parts 65,771 67,836 68,735 63,252

Mineral fuel & oils 34,999 36,262 37,875 53,782

El. Machinery /
37,515 38,988 40,573 42,41
equipment

Plastic 13,668 13,877 13,488 14,073

Source: Statistics Canada

4.4.3 Agreements impacting trade crossing the border (CA-USA)


and Air Cargo Security

Canada has bilateral relations with several countries around the world. Since
the USA is Canadas most important trading partner this chapter puts an
emphasis on the trade agreements and policies between Canada and the
USA. Furthermore Canadian air cargo security initiatives are described.

Since Canada and the USA share a common border that stretches across
8,893 kilometers of land and three oceans, they are each others most im-
portant trading partners.

Canada and the US developed several programs, especially with the aim to
ease and accelerate customs procedures at the border and to increase se-
curity. The following four programs are of high importance:

C-TPAT (Customs Trade Partnership Against Terrorism) by US Customs


and Border Patrol (US CBP)
FAST is a program where the identity of a driver is put on a card (FAST
card). FAST is a US Program
PIP (Partners in Protection) is a Canadian program
CSA (Customs Self Assessment) in Canada

Partnership for a smart border

An important agreement between Canada and the USA is the partnership for
a smart border. With about CAD 1.7 bn in goods and services crossing the
Canada-U.S. border each day, secure and efficient border crossings are the
life line of the mutual economic growth and prosperity.

Canada's investments in secure and efficient border management in coop-


eration with the U.S. demonstrate the common values and interests.

Market Potential Analysis for Windsor International Airport

53
There are more trade flows between Windsor, Ontario and Detroit, Michigan
than through any other border crossing in the world. Trucks carry approx-
imately 80% of Canada's trade with the U.S. one truck crosses the Cana-
da-U.S. border almost every two seconds. Canada and the United States
are actively engaged in implementing the 32-point Smart Border Action Plan.
Since the signing of the Smart Border Declaration and Action Plan in De-
cember 2001, significant progress has been made to enhance the security
and efficiency of their shared border.

Several Smart Border initiatives are underway, including the expansion of


NEXUS (dedicated "fast lanes" for pre-approved and low-risk travelers) and
FAST (expedited clearance processes for pre-authorized shipments) pro-
grams, the establishment of joint teams of customs officials in the ports of
Vancouver, Montreal, Halifax, Seattle-Tacoma and Newark to target marine
containers arriving from abroad that are destined for the other country and
the expansion of Integrated Border Enforcement Teams (IBETs) from coast
to coast along the Canada-U.S. border.

Air Cargo Security Initiatives in Canada

Transport Canada has launched the Air Cargo Security (ACS) Initiative to
improve security along the supply chain. ACS includes a so-called two-
pronged approach that mainly focuses security improvement projects in two
fields of activity:

Supply Chain Security


Air Cargo Screening

To improve supply chain security all participating freight forwarders, shippers


and air carriers have to register in Canada's Secure Supply Chain Manage-
ment System (SSCMS) that is similar to European regulated agent or U.S.
known shipper principles. The interoperability of SSCMS with these pro-
grams and others, such as partners in protection (PIP), is tested.

The air cargo screening efforts focus the use of the right technology in the
respective environments. Intrusive and non-intrusive technologies such as x-
ray, trace detection and canine are tested in different environments to estab-
lish a matrix with appropriate screening models for various industry mem-
bers.

ACS basically improves both aviation and business security along the supply
chain. Aviation security aims to prevent unlawful interference in the air
transport system as this generally has a great impact on people and assets:
95% of the threats in this area, such as hijacking or bomb attacks, are fo-
cused on the flight itself and not on facilities or security personnel. Aviation
security is highly regulated by ICAO and national authorities that are not
globally harmonized and are developing continuously.

Market Potential Analysis for Windsor International Airport

54
Business security focuses mainly on preventing unlawful interference with
the business of ones own company or related parties such as clients or
business partners to prevent threats such as theft or pilferage. Business
security is greatly influenced by industry requirements (e. g. on the part of
business partners or industry standards) and is very dependent on identified
unacceptable risks.

Market Potential Analysis for Windsor International Airport

55
4.5 Canadas Transport System and Trade by Mode of Transpor-
tation

The present chapter gives an overview on the trade per mode of transporta-
tion. Moreover facts and figures on the different transport modes that build
the Canadian transportation system are explained.

The Canadian transportation system includes nearly 900,000 km of road;


2,452 aerodromes, 72,245 km of operating railroad tracks, and more than
300 commercial ports and harbors.

A comparison of the international trade value development by transportation


mode shows that road transportation plays the dominant role. Water trans-
port became more important compared to air and rail transportation since
2002. A heavy decline in sea freight costs, enhanced sea freight services
(e.g. time-defined sea freight) and reliability in delivery are some of the rea-
sons for this development.

Figure 59: Canadian International Trade Value (of goods) by Transpor-


tation Mode
400,000 m USD

350,000

300,000 Air - Total Trade


250,000 Water - Total Trade
Road - Total Trade
200,000 Rail - Total Trade

150,000

100,000

50,000

0
1990
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

Source: North American Transportation Statistics Database (2009)

The majority of domestic freight tonnage within Canada is transported on the


road. In 2005 67.8% of the total domestic tonnage was trucked, followed by
rail transportation accounting for 29.9% and water transportation ac-
counting for 2.3% of the total freight tonnage. Air cargo accounted for only
0.1% of the total domestic tonnage in 2005.

Market Potential Analysis for Windsor International Airport

56
Figure 60: Domestic Freight within Canada by Mode 2005 (thousand
of metric tons)
Air, 500 Water*, 17400

Rail, 228700

Road, 518500

Source: North American Transportation Statistics Database (2009), * Inland Water-


ways only

According to Transport Canada the GDP at basic prices for the transport
sector in 2008 was at a level of CAD 50,571 m. That is a 0.9% increase
compared to 2007. Compared to the previous years this growth is not signifi-
cant as between 2002 and 2007 an annual GDP growth of 3.0% was re-
ported. The total employment within the transport sector for 2008 is esti-
mated at 897.1 thousand employees.

The following chapters include a brief overview about the different modes of
transportation within the Canadian Transport System and the respective
trade per mode of transportation.

4.5.1 Canadian Air Transportation & Trade

Statistics Canada reported a GDP for the air transport industry of CAD 4.9
bn in 2006. An increase of 4.4% in enplaned/deplaned passengers from
2006 to 2007 led to a total number of 106.1 m passengers in 2007. Ontario
accounted for the highest share with 34.7% of all deplaned and enplaned
passengers in 2007. Canadas civil air navigation provider NAV CANADA
reported 4.9 m aircraft take-offs and landings in 2007. This is an increase of
8% compared to 2006 (4.5 m).

Regarding air cargo a comparison of transport costs between air and road
for Canada and the US shows that air cargo transportation in Canada costs
63% more than in the US, whereas road transportation in Canada costs only
one third of the amount in the US. Air transport in the US costs nearly six
times as much as road transport. In Canada air transport costs more than 27
times as much as road transport.

Market Potential Analysis for Windsor International Airport

57
After the recession in 2001/2002 the Canadian air cargo trade caught up and
reached a value (exported/imported goods) of CAD 100,831 m in 2008. The
average annual growth rate from 1998 to 2008 was 5.33%. Exported goods
accounted for 43% of the total value and imported goods for 57%.

Figure 61: Int. goods shipped by air to/from Canada 98 to 08


m CAD
120,000

100,000

80,000

60,000

40,000

20,000

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Air Trade Import Air Trade Export Total Air Trade

Source: Transport Canada, Lufthansa Consulting Analysis

Regarding the total trade the U.S. plays a very dominant role for Canada as
discussed in chapter 4.4.1 (see Figure 55 and Figure 56). Viewing Canadian
air trades broken down on world regions this picture does not change totally
but the shares are far more balanced compared to the total Canadian trade
(Figure 62). Western Europe accounted for 39% of imported and exported
goods by air in 2008 followed by the U.S. (35%) and Asia (11%). The air
trade export value grew by 6.4% while imported air trade increased by 3.4%
between 2007 and 2008. Imported air trade 2008 came mainly from the U.S.
(31%), Western Europe (29%) and Asia (25%).

Market Potential Analysis for Windsor International Airport

58
Figure 62: Canadian Air Imports/Exports by world region 2007 to 2008
EXPORT 2007: Value of Air Cargo goods EXPORT 2008: Value of Air Cargo goods
CAD 40,761 m +6.4% CAD 43,357 m
9% 9%
5% 6%

35%
39%
11% United States 11%
Western Europe
Asia
Latin America
Other

36% 39%

IMPORT 2007: Value of Air Cargo goods IMPORT 2008: Value of Air Cargo goods
CAD 55,599 m +3.4% CAD 57,474 m
6% 7%
8% 8%

32% 31%

United States
Western Europe
Asia
25% Latin America 25%
Other

29% 29%

Source: Transport Canada, Lufthansa Consulting Analysis

Canadas top 25 air trade partners accounted for 89.9% of the total air trade
value in 2008. The top three air trade partners were the U.S, the UK and
China. 73% of air trade between Canada and the UK originated in Canada
and was exported to the UK. 86% of air trade values between Canada and
China were imported from China to Canada.

Figure 63: Top 25 Canadian Air Trade Partners 2008


United States
United Kingdom
China, Peoples Republic
Germ any
France
Mexico
Air Trade Import
Sw itzerland
Japan
Air Trade Export
Korea, South
Belgium
Total Air Trade
Ireland
Italy
Peru
Canada*
India
Malaysia
Taiw an
Singapore
Israel
Sw eden
Netherlands
Hong Kong
Thailand
Australia
Spain bn CAD

0 5 10 15 20 25 30 35
* Imports from Canada to Canada are goods that were produced in Canada, exported to another country, and returned to
Canada for any number of reasons (e.g. wrong size, wrong colour, did not sell, )

Source: Transport Canada, Lufthansa Consulting Analysis

Market Potential Analysis for Windsor International Airport

59
The main commodity groups transported by air (measured by value of
goods) are shown in Figure 64. Machinery & electrical equipment exports
decreased from 2007 (36%) to 2008 (32%). Only 2% of exported and 1% of
imported values were generated by agriculture and food products in 2008.

Figure 64: Canadian Air Imports and Exports by commodity groups


2007-2008
EXPORT 2007: Value of Air Cargo by commodity groups EXPORT 2008: Value of Air Cargo by commodity groups
CAD 40,761 m CAD 43,357 m
1% Other manufactured and
1% 2% 0% miscellaneous goods 2% 0%
2% 2%
2% Machinery and electrical 2%
equipment
Aircrafts and other
36% 18%
22% transport equipment
Plastics and chemical 42%
products
Base metals and articles
of base metal
Agricultural and food
products
Waste and scrap

Other
32%
36%

IMPORT 2007: Value of Air Cargo by commodity groups IMPORT 2008: Value of Air Cargo by commodity groups
CAD 55,599 m CAD 57,474 m
3% 1%
1% 2% 1% 1%
2% 2%
8% 6%

34% 10%
37%
11%

41% 40%

Source: Transport Canada, Lufthansa Consulting Analysis

4.5.2 Canadian Road Transportation and Trade

The Canadian road system comprises around 900,000 kilometers of road of


which ca. 4.2% are highways. In 2007 Canada had about 12,200 for-hire
trucking companies that generated estimated revenues of CAD 32.4 bn.
(source: Transport Canada). Intraprovincial truck traffic grew by 14.1% from
2004 to 2006.

Market Potential Analysis for Windsor International Airport

60
Figure 65: Tonnage by Canadian For-Hire Carriers 2004 to 2006
m metric tonnes
500
447
450 421
392
400
350
300
250
200
150
100 69 72 73
54 43.5 52 42.4 49 38
50
0
2004 2005 2006
Interprovincial Intraprovincial Domestic Trucking

International Exports International Imports International Trucking

Source: Statistics Canada, new Trucking Commodity Origin and Destination (TCOD)
Survey, beginning with reference year 2004

Trade between Canada and the United States increased significantly (191%)
from 1990 to 2005 (Statistics Canada). Truck traffic between Canada and
the U.S. is fairly balanced whereas truck traffic between Canada and Mexico
is characterized by 91% imports from Mexico to Canada.

Figure 66: Canadian Int. Trade Shipped by Trucks per Country 2008
m CAD
180,000 162,876 163,936
160,000
140,000
120,000
100,000
80,000
60,000 50,203
40,000
20,000 12,635
1,764 4,976
0
2008 Exports 2008 Imports
United States Other Countries Mexico

Source: Transport Canada, adapted from Statistics Canada, International Trade


database, March 2009

Machinery and electrical parts, automobile parts, other manufactured goods,


base metals, agricultural products and food account for 80% of all trucked
export values and 82% of all trucked import values.

Market Potential Analysis for Windsor International Airport

61
Figure 67: Canadian Int. Trade Shipped by Trucks per Commodity
Group 2008
EXPORT Truck Commodity groups: IMPORT Truck Commodity groups:
Total value CAD 169,616 m Total value CAD 226,773 m
1.4%
1.2%1.0% 0.9%
Machinery and electrical 1.1%
1.5% 3.1% 0.2%
6.0% 0.6% equipment
Automobiles and other transport

Other manufactured and 11.0%


21.2% miscellaneous goods
Base metals and articles of base
10.1% metal 29.7%
Agricultural and food products
8.1%
Plastics and chemical products

11.0% Forest products

18.9% Petroleum products 8.5%

Cement and non-metallic


products
11.2% Waste and scrap
19.9%
17.4% Minerals, ores and concentrates 16.2%

Source: Transport Canada, adapted from Statistics Canada, International Trade


database, March 2009

Windsor is connected to the largest border crossing between Canada and


the United States the Ambassador Bridge (for further information please
refer to chapter 4.2.2 infrastructure). The figure below shows the top 20 bor-
der crossings measured by two-way truck movements. Seven out of the top
20 border crossings are situated in Ontario.

Figure 68: Twenty Largest Border Crossings (CA-US) for Trucks - 2008
Windsor Am bassador Bridge Ont.
Sarnia Blue Water Bridge Ont.
Fort Erie Peace Bridge Ont.
Niagara Falls Queenston Br. Ont.
Pacific Highw ay / Douglas B.C.
Lacolle Que.
Em erson Man.
Lansdow ne Ont.
Coutts Alb.
Phillipsburg Que.
Rock Island Que.
North Portal Sas.
Aldergrove B.C.
Woodstock N.B.
Sault Ste. Marie Ont.
Huntingdon B.C.
WindsorDetroit Tunnel Ont.
Osoyoos B.C.
Kingsgate B.C.
Arm strong Que.
Two-way truck
0 0.5 1 1.5 2 2.5 3 movements in m

Source: Transport Canada, adapted from Statistics Canada, International Travel


section, and other unpublished statistics

4.5.3 Canadian Rail Transportation and Trade

Rail transportation is the most fuel efficient and environmentally friendly


mode of surface transportation, but it is also the most capital-intensive. A
fact that cannot be ignored in today's environment of financial volatility and
limited credit. Volatility in fuel prices and concerns about carbon emissions

Market Potential Analysis for Windsor International Airport

62
have placed demands on both passenger and freight rail services and hence
on infrastructure.

Total operating revenues for the Canadian railway industry reached CAD
10.5 bn in 2007. Ontario is leading international rail trade as it accounted for
23.0% of total rail exports and 45.6% of total rail imports of Canada.

Figure 69 and Figure 70 show the exported tonnage originating and the im-
ported tonnage cleared in Canada and Ontario respectively.

Figure 69: Rail exports originating from Canada and Ontario 99 to 08


m metric tons
90
80
70
60
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Rail Exports Ontario Rail Exports Canada

Source: Adapted from Statistics Canada (International Trade Division) by Transport


Canada, 2008 Data not available due to problems with Statistics Canada estimation
factors

Figure 70: Rail imports originating from Canada and Ontario 99 to 08


m metric tons
90
80
70
60
50
40
30
20
10
0
1999 2000 2001 2002 2003 2004 2005 2006
Rail Imports Ontario Rail Imports Canada

Source: Adapted from Statistics Canada (International Trade Division) by Transport


Canada, 2007/2008 Data not available due to problems with Statistics Canada esti-
mation factors

Ontario is leading international rail trade as it accounted for 23.0% of total


rail exports and 45.6% of total rail imports of Canada.

Market Potential Analysis for Windsor International Airport

63
Figure 71: Exports/Imports by Province/Territory of Origin/Clearance
08
Rail EXPORTS 2006 Rail IMPORTS 2006
by Province/Territory of Origin by Province/Territory of Clearance
2.3% 0.9% 2.3% 0.1%
Ontario
4.3%
23.0% 11.3%
Alberta
15.5%
British Columbia 7.1%

Saskatchewan 45.6%
7.0%
Quebec

15.9% Manitoba
19.7% 9.0%

New Brunswick

18.5% Nova Scotia 17.5%

Total EXPORT Tonnage: Total IMPORT Tonnage:


77.9 m metric tons 25.6 m metric tons

Source: Adapted from Statistics Canada (International Trade Division) by Transport


Canada

The main commodities transported on rails by volume were coal, mixed


loads or unidentified freight and wheat. These three categories accounted
for 28% of total tonnage in 2006.

4.5.4 Canadian Marine Transportation and Trade

Canada has around 110 for-hire marine carriers that generated revenues of
CAD 2.9 bn in 2005. Over 300 Canadian ports handled 465.6 m metric tons
of cargo in 2007. The figure below shows the total tonnage handled in Can-
adas port system from 2005 to 2007.

Figure 72: Tonnage Handled in Canadas Port System 2005 to 2007


m metric tons
500 471 466 466
450
400
350
300
250
200
150
100
50
0
2005 2006 2007

Source: Statistics Canada, Shipping in Canada, Cat. 54-205 and CPAs web site data

Market Potential Analysis for Windsor International Airport

64
4.6 Aviation Policies and Regulations

With respect to the overall goal of the consulting project, the consultants
looked into the regulatory framework for international air service connections
to Canada and Windsor.

4.6.1 Historical Background

In the Chicago Convention on International Civil Aviation from 1944, a mul-


tilateral agreement was determined that defined the so called freedoms of
the air (1: rights to fly over a foreign country, 2: right to make non-traffic stop
e.g. for refueling, 3: right to set down traffic in a foreign country, 4: right to
pick up traffic in a foreign country etc.) and included amongst others basic
principles for international civil aviation such as sovereignty, equal opportuni-
ty, no discrimination and autonomy. The Chicago Convention founded the
International Civil Aviation Organization (ICAO) as a forum for international
know-how transfer and as a framework for the accomplishment of interna-
tional civil aviation.

4.6.2 Bilateral Air Agreements (Canada)

Despite the importance of the Chicago Convention the agreed principles are
rather general and are the basis for secondary legislation. So-called bilateral
agreements became necessary to fix traffic rights in order to transport pas-
sengers, cargo and mail from one state to the other. Two states traditionally
negotiate one or more of the following subjects:

The number of frequencies per week


Type of aircraft and/or number of seats
One or more airline(s) registered in the other contracting state are entitled
to apply for the right to operate between the two states
Commercial traffic rights beyond the respective contracting state
The total number of airports which might be served in the other state
Cabotage is the right for commercial air transport within the other state

The general idea behind these agreements is to safeguard equal opportuni-


ties for the (national) airlines(s) of the contracting states.

Canada currently has bilateral air agreements with the countries listed be-
low. For Windsor International Airport especially the designated Canadian
and foreign airlines that are part of the bilateral agreements are important.
Further information on each bilateral agreement can be found on the De-
partment of Foreign Affairs and International Trade's Web site
(http://www.treaty-accord.gc.ca).

Market Potential Analysis for Windsor International Airport

65
Figure 73: Canadian Bilateral Air Agreements and Designated Carriers

Designated Canadian Designated Foreign


Country
Airline(s) Airline(s)
Air Canada
Algeria Air Algrie
(code-sharing services)
Air Canada
Antigua* West Jet
Sunwing Airlines
Argentina Air Canada Aerolineas Argentinas
Aruba Air Canada WestJet
Air Canada
Australia Harmony Airways Qantas
(code-sharing services)
Air Canada
Austria Austrian Airlines
Air Transat
Bahamas* Air Canada West Jet
Air Canada WestJet
Barbados
Sunwing
Air Canada
Belgium Air Transat Brussels Airlines
Skyservice
VARIG-Vaiao
Brazil Air Canada Varig Logistica
TAM Linhas Areas S.A.
1
Bulgaria Air Canada Balkan Bulgarian Airlines
Chile Air Canada Lan Airlines S.A.
Air Canada Air China
China CargoJet China Eastern
Harmony Airways Shanghai Airlines Co., Ltd.
Colombia** Air Canada Avianca
Lineas Aereas Costarricensas,
Costa Rica Air Canada
S.A. (LACSA)
Skyservice
Croatia
Air Canada
Air Canada
Cuba Cubana
Air Transat
Czech Republic Air Canada Czech Airlines
Scandinavian Airlines System
Denmark Air Canada
(SAS)
Air Canada Air Transat
Skyservice Zoom Airlines 1
Dominican Republic Dominicana
WestJet
Sunwing
Egypt Air Canada EgyptAir Cargo1
El Salvador Air Canada
Air Canada
Fiji Harmony Airways Air Pacific
(code-sharing services)
Finland Air Canada Finnair
Air France
Air Canada 1
Aeris
France Air Transat Zoom Airlines
Corsair
Skyservice
Air St. Pierre

Market Potential Analysis for Windsor International Airport

66
Lufthansa
Air Canada Condor Flugdienst LTU Interna-
Germany
Air Transat tional Airways
Lufthansa Cargo AG
Air Canada
Greece Olympic Airlines
Air Transat
Grenada Air Canada
Guatemala* Air Canada
TravelSpan GT Inc.
Guyana Air Canada
E-Jet-Inc.
Haiti Air Canada
Hong Kong Air Canada Cathay Pacific
Hungary Air Canada MALEV Hungarian Airlines
Iceland Icelandair
Air India
India Air Canada 1
Jet Airways
1
Indonesia Air Canada Garuda
Air Canada
Ireland Air Transat Aer Lingus
Skyservice
Israel** Air Canada El Al
Air Canada Air Transat
Alitalia
Italy Skyservice Zoom Airlines
Air Italy SpA Airone
Inc.
Ivory Coast Air Canada Ivoire Aero Services (IAS)
Air Canada Sunwing Airlines
Jamaica WestJet Air Jamaica
Skyservice
Japan Air Canada Japan Airlines All Nippon
Jordan Air Canada Royal Jordanian
Korea Air Canada Korean Airlines Asiana Airlines
Kuwait Airways Corporation
Kuwait Air Canada
Jazeera Airways Company
1 1
Lebanon* Air Canada Middle East Airlines
Malaysia Air Canada Malaysia Airlines
Air Canada Air Transat
Skyservice Sunwing
Mexicana
Mexico WestJet
Aerovias de Mexico
Zoom Airlines
Harmony Airways CargoJet
Morocco Air Canada Royal Air Maroc
Air Canada
Netherlands KLM Martinair
Air Transat
Netherlands Antilles Air Canada
New Zealand Air Canada Air New Zealand
Nicaragua Air Canada
Scandinavian Airlines System
Norway Air Canada
(SAS)
Pakistan International Airlines
Pakistan Air Canada
(PIA)
Panama Air Canada

Market Potential Analysis for Windsor International Airport

67
Peru Air Canada Lan Peru
Philippines Air Canada Philippine Airlines
Air Canada
Poland LOT Polish Airlines
Air Transat
Air Canada
Portugal Air Transat TAP Air Portugal
Skyservice
Romania Air Canada TAROM S.A.
Air Canada
Russia Aeroflot Transaero
Skyservice
Air Canada
British West Indies Airways
Saint Lucia West Jet
(BWIA)
Sunwing Airlines
Saudi Arabia Air Canada
Skyservice
Serbia
Air Canada
Singapore Airlines Limited
Jett8 Airlines Cargo
Singapore Air Canada Private Limited
Singapore Airlines Cargo (Pri-
vate) Limited
Iberia
Air Canada
Spain Spanair
Air Transat
Air Comet
British West Indies Airways
St. Kitts & Nevis Air Canada
(BWIA)
Scandinavian Airlines System
Sweden Air Canada
(SAS)
Air Canada
Switzerland Swiss International Air Lines
AirTransat
Taiwan** Air Canada China Airlines EVA Airways
Thailand Air Canada Thai Airways
British West Indies Airways
Trinidad & Air Canada
(BWIA)
Tobago
Air Ukraine
Ukraine Air Canada AeroSvit Ukrainian-
Mediterranean Airlines 1
United Arab Etihad Airways Emirates Air-
Air Canada
Emirates lines
British Airways
Virgin Atlantic
Air Canada British Midland
1
Air Transat Airfreight Express Ltd.
United Kingdom 1
Skyservice Trade Winds
WestJet Airlines Thomas Cook
Astraeus Ltd.
Globespan Airways Ltd.
United States of
Various Various
America
Venezuela Air Canada VIASA Aeropostal1
Vietnam Air Canada

Market Potential Analysis for Windsor International Airport

68
1
carrier does not hold a license to operate air services to Canada
* 1949 Canada-UK Air Services Agreement, by succession
** Other instrument in lieu of an Agreement
Source: Canadian Transportation Agency, Report of Bilateral Air Relations between
Canada and Other Countries, last modified February 2009

The International Air Cargo Transshipment Program allows air cargo to


be moved through Canada for shipment to third countries. For example,
cargo could be flown from the United States into Windsor, stored temporarily
and then flown to an Asian destination. Similarly, international air cargo
could also arrive from overseas and then be shipped by rail or road from
Windsor to the United States, allowing the airport to take full advantage of
the Asia-Pacific gateway and corridor.
The program enables the Canadian Transportation Agency to authorize any
Canadian or foreign air carrier to use Windsor International Airport to trans-
ship international air cargo, even if these rights are not provided in Canada's
bilateral air transport agreements. In addition, air carriers will be able to
combine such cargo transshipments with other services for which they may
be licensed. Windsor International Airport has participated in the program
since 1993.

Market Potential Analysis for Windsor International Airport

69
5. Relevant Airports and Airlines for YQG

The following serves to give an overview of Windsor International Airport and


those airports and airlines that could potentially have an impact on the eco-
nomic and traffic situation for Windsor International Airport.

5.1 Windsor International Airport (YQG)

Windsor Airport is located in the southeast portion of the city of Windsor in


Ontario, Canada and covers 2,000 acres of land. The airport serves a mix-
ture of scheduled domestic airline flights, general aviation and cargo char-
ters. The airspace above the airport is operated in collaboration with the
FAA. The catchment area of Windsor International Airport has been defined
in chapter 3.2 (page 16).
The airport is classified as an airport of entry by NAV CANADA and is staffed
by the Canada Border Services Agency (CBSA) providing on-site Canadian
customs clearance services.
Windsor International Airport is operated by Your Quick Gateway on behalf
of the City of Windsor.

YQG has two runways and is operational 24 hours per day, 7 days per week
and is capable of supporting both VFR and IFR operations down to Cat I
precision approach limits and departures in visibility down to 1/2 statute mile.

Figure 74: Runways YQG


Name Orientation Elevation Length (m) Width (m)
(ft)
7 70 622 2394 61
25 250 622 2394 61
12 120 622 1571 61
30 300 622 1571 61
Source: ATI

In 2007 the airport handled 118,251 passengers and 40,550 aircraft. Airlines
serving the airport include Air Canada (Jazz), Sunwing and Cameron Air.

Figure 75: Airlines serving YQG


Airlines Serving YQG

Air Canada (Jazz)

Sunwing

Cameron Air

Source: ATI

Market Potential Analysis for Windsor International Airport

70
5.2 Competing Airports

Within a radius of 350 km around Windsor International Airport (this catch-


ment area has been defined for the forecast see chapter 3.2, see page 16)
the following competing airports are situated, amongst others. Together with
YQG these airports were defined as the Relevant Market that was consi-
dered in the forecast:

Region of Waterloo International Airport, ON, CA


Hamilton - John C. Munro International Airport, ON, CA
London International Airport, ON, CA
Detroit Metropolitan Wayne County Airport, MI, USA
Detroit Willow Run Airport, MI, USA
Toledo Express Airport, OH, USA
Toronto - Lester B. Pearson International Airport, ON, CA
Bishop International Airport, MI, USA

Caused by the proximity the characteristics of these airports are important


for Windsor International Airport and are further described in the following
chapters.
The following table gives a short overview comparing the different airports:

Figure 76: Comparison of YQGs Competing Airports


Cargo
Landing
Airport Infrastructure Fuel Tonnage
Charges
(2008)
USD 0.03/l
up to USD 4.80 approx.0
YKF 2 runways; 24/7 operations; forklift truck turbo USD
per ton plus tax tons
0.04/l avgas
2 runways; warehouse; heated storage; air-
approx.
up to USD 37.00 conditioned storage; livestock handling; x-ray
YHM n/a 90,000
per ton MTOW equipment; dangerous goods;
tons
express/courier center
approx.
YXU n/a 2 runways n/a
160 tons
up to USD 6.69 202,200
DTW 6 runways n/a
per ton tons
up to USD 3.33 173,387
YIP 5 runways type 100LL
per ton tons
2 runways; 24/7 operations; cargo terminal;
free port/foreign trade zone; heated storage; 354,469
TOL n/a n/a
air-conditioned storage; refrigerated storage; tons
x-ray equipment; dangerous goods
5 runways; warehouse; heated storage; air-
up to USD 31.58 conditioned storage; refrigerated storage; 483,200
YYZ n/a
per ton animal quarantine; x-ray equipment; tons
dangerous goods
14,057
FNT n/a 3 runways type 100LLA
tons
Source: Lufthansa Consulting research

Market Potential Analysis for Windsor International Airport

71
5.2.1 Region of Waterloo International Airport (YKF)

Region of Waterloo International Airport is situated 3 km south of the village


of Breslau in the Regional Municipality of Waterloo and covers an area of
745 acres.

The first construction of the airport was completed in 1950 and it is owned
and operated by the Region of Waterloo.
YQF disposes of two runways.

Figure 77: Runways YKF


Name Orientation Elevation Length (m) Width (m)
(ft)
7 70 1040 2135 46
25 250 1040 2135 46
14 140 1040 1251 46
32 320 1040 1251 46
Source: ATI

In 2008 the airport handled 0.118 million passengers. The handled cargo
tonnage was not significant but Waterloo was considered in the Relevant
Market as the airport has passenger figures that are comparable to YQG.

YKF can accommodate aircraft up to a Code C classification. Airlines serv-


ing the airport include WestJet and Bearskin Airlines, which are scheduled
year round.

Figure 78: Airlines serving YKF


Airlines Serving YKF

WestJet Airlines

Bearskin Airlines

Source: ATI

Aircraft Landing Fee at YKF is based on gross take off weight:

Figure 79: Landing Fees YKF


Landing Fees Domestic International
Based Aircraft No Fee below 2,500 kg No Fee below 2,500 kg
Itinerant Aircraft No Fee below 1,000 kg No Fee below 1,000 kg
1,000 - 21,000 kg $3.50 /1000 kg + tax $3.80 /1000 kg + tax
21,001 - 45,000 kg $4.00 /1000 kg + tax $4.30 /1000 kg + tax
Over 45,000 kg $4.50 /1000 kg + tax $4.80 /1000 kg + tax
Source: Region of Waterloo International Airport

Fuel surcharges are CAD 0.03 per liter turbo and CAD 0.04 per liter Avgas.

Market Potential Analysis for Windsor International Airport

72
5.2.2 Hamilton - John C. Munro International Airport (YHM)

Hamiltons John C. Munro International Airport is situated in Hamilton, Ontar-


io.

The airport was privatized in 1995 and is now owned by the City of Hamilton
and operated by Tradeport International.
The airport disposes of two runways:

Figure 80: Runways YHM


Name Elevation (ft) Length (m) Width (m)
12L 780 2438 60
30R 780 2438 60
6 780 1828 45
24 780 1828 45
Source: ATI

In 2008 the airport handled 0.546 million passengers and 90,000 tons of air
cargo.

Airlines serving the airport include WestJet Airlines, CargoJet Airways and
FlyGlobespan. The airport is Canadas largest integrated courier airport and
home to all four of the largest overnight package delivery companies operat-
ing in Canada. Courier companies include Purolator Courier, United Parcel
Service, FedEx, BAX Global and CargoJet.

Figure 81: Airlines serving YHM


Airlines Serving YHM

W estJet Airlines

CargoJet Airways

FlyGlobespan

Source: ATI

At John C. Munro International Airport for each aircraft landing the fee is the
greater of the Standard or the Minimum Fee.

Market Potential Analysis for Windsor International Airport

73
Figure 82: Landing Fees YHM
Fee per 1000 kg
Landing Fees Flight Type MTOW or portion
thereof
Standard (Signatory Air Domestic, Transborder
$ 10.88
Carriers) and International

Standard (Non- Domestic, Transborder


$ 12.69
Signatory Air Carriers) and International

Minimum Landing Fees Domestic, Transborder


$ 18.50
(Aircraft up to 2000 kg) and International
Minimum Landing Fees
Domestic, Transborder
(Aircraft 2001 3750 $ 37.00
and International
kg)
Source: John C. Munro International Airport

5.2.3 London International Airport (YXU)

London International Airport is situated 9 km northeast of London City Cen-


ter in Ontario, Canada.

London International Airport is owned by Transport Canada and operated by


the Greater London International Airport Authority. The airport disposes of
one terminal and two runways:

Figure 83: Runways YXU


Name Orientation Elevation (ft) Length (m) Width (m)
9 90 912 1920 60
27 270 912 1920 60
15 150 912 2682 60
33 330 912 2682 60
Source: ATI

In 2007 the airport handled 0.455 million passengers with 0.165 million air-
craft movements. London International Airport handled approximately 160
metric tons of cargo in 2008. Airlines serving the airport include Air Canada,
Northwest Airlines, United Airlines and WestJet Airlines.

Market Potential Analysis for Windsor International Airport

74
Figure 84: Airlines serving YXU
Airlines Serving YXU

WestJet Airlines

Air Canada

Northwest Airlines

United Airlines

Sunwing

Transat Holidays

Sunquest

Source: London International Airport

5.2.4 Detroit Metropolitan Wayne County Airport (DTW)

Located 32 km southwest of Detroit, Detroit Metropolitan Wayne County


Airport is the largest hub for Northwest Airlines and the second-largest hub
for low-cost carrier Spirit Airlines.

The airport is operated by Wayne County Airport Authority and has two ter-
minals. The airport disposes of six runways:

Figure 85: Runways DTW


Name Orientation Elevation (ft) Length (m) Width (m)
03L 36 636 2591 60
21R 216 632 2591 60
04R 36 637 3658 60
22L 216 636 3658 60
03R 36 633 3048 46
21L 216 632 3048 46
09L 96 638 2654 60
27R 276 635 2654 60
09R 96 636 2590 46
27L 276 629 2590 46
04L 36 645 3048 46
22R 216 642 3048 46
Source: ATI

In 2008 the airport handled 35.136 m passengers and 202,200 metric tons
cargo (without mail). The chart below shows the freight development starting
in January 2008 to January 2009.

Market Potential Analysis for Windsor International Airport

75
Figure 86: Total Air freight DTW 2008 to 2009
Metric
12000
tonnes

10000

8000

Inbound
6000
Outbound
4000

2000

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
08 08 08 08 08 08 08 08 08 08 08 08 09

Source: Lufthansa Consulting

Figure 87: International Air freight DTW 2008 to 2009


Metric
tonnes 4000
3500

3000

2500

2000 Inbound

Outbound
1500

1000

500

0
Jan Feb Mar Apr May Jun Jul 08 Aug Sep Oct Nov Dec Jan
08 08 08 08 08 08 08 08 08 08 08 09

Source: Lufthansa Consulting

Figure 88: Domestic Air freight DTW 2008 to 2009


Metric
tonnes
9000

8000

7000

6000

5000
Inbound
4000
Outbound
3000

2000

1000

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
08 08 08 08 08 08 08 08 08 08 08 08 09

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

76
Airlines serving DTW include Air Canada, Air France, American Airlines,
Delta and Lufthansa.

Figure 89: Airlines serving DTW


Airlines Serving DTW

Air Canada Frontier Airlines

Air France Lufthansa

American Airlines Northwest Airlines

Aero Mexico Spirit Airlines

Continental Airlines United Airlines

Delta Airlines US Airways

Source: ATI

Airlines serving Detroit Metropolitan Wayne County Airport have to pay land-
ing charges, parking charges and an international terminal use fee.

Figure 90: Charges DTW


Type Fee

Landing Charge USD 5.36 per metric


(Signatory) tonne

Landing Charge (Non- 6.69 USD per metric


Signatory) tonne

First 8 hours free


Parking Charge thereafter 50% of landing
charge per 24 hours
International Terminal
USD 3.50 per arriving
Use Fee (Berry
passenger
Terminal)
International Terminal
USD 4.50 per arriving
USE Fee (Mc Namara
passenger
Terminal)
Source: IATA

5.2.5 Detroit Willow Run Airport (YIP)

Detroit Willow Run Airport is located in the Van Buren Charter Township
near Ypsilanti, Michigan (seven miles west of Detroit Metropolitan Airport)
and serves freight, corporate and general aviation clients. Detroit Willow Run
Airport occupies 2,600 acres of land.

Market Potential Analysis for Windsor International Airport

77
The Wayne County Airport Authority operates this public airport, which dis-
poses of five runways:

Figure 91: Runways YIP


Name Orientation Elevation (ft) Length (m) Width (m)
05L 53 716 2028 49
23R 233 706 2028 49
05R 53 715 2293 46
23L 233 702 2293 46
09L 95 716 2222 49
27R 275 700 2222 49
09R 95 715 1984 49
27L 275 703 1984 49
14 143 714 1923 49
32 323 704 1923 49
Source: ATI

Willow Run Airport has 100,000 operations per year. Approximately 173,387
tons of cargo were transferred through the airport in 2008. Cargo airline Ka-
litta Air is based at Willow Run Airport.

Figure 92: Airlines serving YIP


Airlines Serving YIP

Kalitta Air

National Airlines

USA Jet

Source: Willow Run Airport

At Detroit Willow Run Airport, landing fees are applicable to both private and
commercial aircraft, where landing fees are not covered by the terms of a
written agreement between the Wayne County Airport Authority and the
aircraft operator.

Market Potential Analysis for Windsor International Airport

78
Figure 93: Landing Fees YIP
Landing weight
Landing Fee
categories
Up to 2.95 tonnes No charge
2.95 to 5.67 tonnes $ 18.00
5.67 to 13.6 tonnes $ 45.00
13.6 to 27.2 tonnes $ 90.00
27.2 to 36.3 tonnes $ 120.00
36.3 to 45.4 tonnes $ 150.00
45.4 to 68.0 tonnes $ 225.00
68 tonnes and over $ 3.33 per metric tonne
Maximum landed Tenant & Itinerant
weight categories customs fees
under 5.7 tonnes $ 65.00
5.7 to 18.1 tonnes $ 117.00
18.1 to 45.4 tonnes $ 227.00
45.4 to 68.0 tonnes $ 455.00
68.0 to 136 tonnes $ 700.00
136 tonnes and over $ 910.00
Source: Detroit Willow Run

5.2.6 Toledo Express Airport (TOL)

Toledo Express Airport is situated 16 km west of Toledo, Ohio, about an


hour drive from Windsor. It is a regional cargo airport.

The airport is owned by Toledo-Lucas County Port Authority and disposes of


one terminal and two runways:

Figure 94: Runways TOL


Name Orientation Elevation (ft) Length (m) Width (m)
7 73 683 3231 46
25 253 665 3231 46
16 163 675 1707 46
34 343 665 1707 46
Source: ATI

In 2008 the airport handled 0.251 million passengers and 354,469 tons of
cargo. The airport has recently started cooperation with Emirates Sky Cargo
in Dubai in the field of pharmaceuticals and other lightweight, high-value-
added goods.

Airlines serving the airport are Allegiant Air, Mesaba Airlines, American
Eagle Airlines, Qantas and Atlas Air.

Market Potential Analysis for Windsor International Airport

79
Figure 95: Airlines serving TOL
Airlines Serving TOL

Allegiant Air

American Eagle Airlines

Atlas Air

Mesaba Airlines

Qantas

Source: ATI

5.2.7 Toronto - Lester B. Pearson International Airport (YYZ)

Torontos Lester B. Pearson International Airport is located 27km north-west


of Toronto in the city of Mississauga. The airport occupies 420 hectares of
land.

Owner of the airport is the Greater Toronto Airports Authority. The airport
disposes of two terminals and five runways:

Figure 96: Runways YYZ


Name Orientation Elevation (ft) Length (m) Width (m)
15L 150 569 3368 60
33R 330 569 3368 60
15R 150 569 2590 60
33L 330 569 2590 60
23 230 569 3241 60
24L 240 569 2895 60
06R 60 569 2895 60
5 50 569 3348 60
06L 60 569 2956 60
24R 240 569 2956 60
Source: ATI

Toronto Pearson handled 32.3 million passengers and 483,200 tons of cargo
in 2008. There are two main cargo facilities at Pearson. The Cargo West
Facilities are located between runways 15L/33R and 15R/33L, and the Car-
go Area 5 or VISTA Cargo Centers Incorporated are located north of Ter-
minal 3. The airport also provides facilities for FedEx.

Airlines serving the airport include Air Canada, American Airlines, Cargolux
and KLM.

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80
Figure 97: Airlines serving YYZ
Airlines Serving YYZ

Air Canada Cathay Pacific

Air France Lufthansa

American Airlines Etihad Airways

Emirates Air India

Cargolux Airlines United Airlines

Air France US Airways

Air Transat KLM

LAN Airlines LOT Polish Airlines

Finnair WestJet Airlines

Aero Mexico British Airways

Continental Airlines

Source: ATI

Airlines serving the airport have to pay landing charges, parking charges and
a general terminal fee.

Figure 98: Landing fees YYZ


Type Fee
Peak: CAD 145 per
Landing charge landing
(aircraft up to 19 tons) Non-peak: CAD 82.50
per landing
Landing charge
CAD 35.09 per ton
(aircraft over 19 tons)

Parking charge First six hours free,


(aircraft up to 19 tons) CAD 12.20 per day

Parking charge First six hours free,


(aircraft over 19 tons) CAD 1.25 per ton

General Terminal Fee


CAD 9.86 per seat
(International Arrivals)

General Terminal Fee


CAD 7.89 per seat
(Domestic Arrivals)

Source: IATA

Market Potential Analysis for Windsor International Airport

81
5.2.8 Bishop International Airport (FNT)

Bishop International Airport (FNT) is located in the city of Flint in Michigan


(USA) near the Great Lakes.

Bishop International Airport is publicly owned and operated by the Bishop


International Airport Authority Board which contains nine members who are
appointed to three year terms. Members of the board are the mayor of the
City of Flint and the Genesee County Board of Commissioners. FNTs airport
director reports directly to the board.

The airport has one terminal and is served from cargo integrators DHL,
Emery worldwide and FedEx. It disposes of three runways.

Figure 99: Runways FNT


Name Orientation Elevation(ft) Length(m) Width(m)
09 095 764 2195 45
27 275 763 2195 45
18 186 764 2392 45
36 006 779 2392 45
05 053 778 1195 45
23 233 763 1195 45
Source: ATI

FNT handled 35,859 passengers in May 2009, 15.51% less than in May
2008. In 2008 the airport handled 5,891 metric tons of cargo (enplaned) and
8,168 metric tons of cargo (deplaned). The following figure shows the han-
dled freight tonnage at Bishop International Airport.

Figure 100: Air cargo tonnage at FNT 01/2008 to 05/2009


Metric tons
1,400

1,200

1,000

800
Enplaned
Deplaned
600

400

200

0
Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai
08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09

Source: Bishop International Airport

Market Potential Analysis for Windsor International Airport

82
Airlines serving the airport include Delta, Northwest Airlines and Continental
Connection.

Figure 101: Airlines serving FNT


Airlines serving FNT

AirTran Airways

American Eagle

Continental
Connection

Delta

Midwest Connect

Northwest Airlines

Source: Bishop International Airport

Bishop International Airport is also served by Federal Express. In 2008, the


Integrator deplaned 4,418 metric tons and enplaned 5,516 metric tons at
Bishop International Airport as shown in the figure below.

Figure 102: FedEx air cargo tonnage at FNT 01/2008 to 05/2009


Metric tons
600

500

400

Enplaned
300
Deplaned

200

100

0
Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai
08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09

Source: Bishop International Airport

Market Potential Analysis for Windsor International Airport

83
5.3 Historic Traffic Development at YQG

Existing data about freight tonnage and the number of passengers handled
at YQG is very limited. It is estimated that 300 tons of cargo were handled in
2008.

The following chart shows the development of aircraft movements at Wind-


sor International Airport as aircrafts movements are related to transported
freight.

As shown in the figure below traffic movements increased over the last five
years and Windsor International Airport operated 41,573 aircraft movements
in total in 2008.

Figure 103: Total Aircraft movements at Windsor Airport 2004 to 2008

45000

40000

35000

30000

25000

20000

15000

10000

5000

0
2004 2005 2006 2007 2008

Source: Statistics Canada

Comparing the total aircraft movements of Windsor International Airport with


other Canadian airports, YQG significantly improved its rank within the last
five years.

Market Potential Analysis for Windsor International Airport

84
5.4 Canadian Airline Market

The development of air cargo business at Windsor International Airport is


strongly dependent on the development of new air services to and from
YQG.
Therefore the following chapter gives a general overview of airlines in the
Canadian aviation market including leading airlines such as Air Canada,
WestJet and Air Transat as main passenger airlines and Air Canada Cargo,
CargoJet Airways, WestJet Cargo and Air Transat Cargo as Canadas lead-
ing cargo airlines.
The second part of this chapter gives a short overview of other Canadian
regional and cargo airlines.

5.4.1 Canadas Key Passenger and Cargo Airlines

Air Canada / Air Canada Cargo

Canada's flag carrier, Air Canada together with its regional airline subsidiary,
Air Canada Jazz, provides scheduled and charter air travel in Canada for
passengers to more than 150 destinations.
23 million passengers fly with Air Canada between Canada and the U.S. per
year and 23 Canadian airports offer non-stop flights to the USA.

Figure 104: Air Canada


Revenue (m USD), 2008 10,383.1
Passengers (m), 2008 32.9
Net Profit (USD m), 2008 -960.4
Employees, 2008 24,200
Fleet 196
Destinations 80
Source: Air Transport Intelligence

With an extensive wide body fleet, Air Canada Cargo can handle the most
varied shipments. They also offer extensive trucking services to compliment
the aircraft network.

Air Canada achieved operating revenue in its cargo business of CAD 76 m


in June 2009. The airline achieved its highest revenue in the Canadian seg-
ment (CAD 1,710), followed by the US Transborder segment (CAD 830).

Market Potential Analysis for Windsor International Airport

85
Figure 105: Cargo Revenues Air Canada
Six months ended June 30
Cargo Revenues
2009 2008
Canada CAD 1,710 CAD 1,998
US Transborder CAD 830 CAD 998
Atlantic CAD 757 CAD 858
Pacific CAD 374 CAD 447
Other CAD 398 CAD 474
Total CAD 4,069 CAD 4,765
Source: Air Canada

Air Canada Cargo provides the following products to their customers:

Air freight shipments


Express airport-to-airport service for small packages traveling within
Canada
Handling of live animals (AVI)
High-value shipments that require special attention
Handling of dangerous goods
A worldwide premium solution for time-sensitive shipments
Compassion
Transport of specialized or pharmaceutical shipments that require a tem-
perature-controlled environment

Air Canada holds rank 37 in the top 50 cargo airline ranking by traffic in 2007
with Revenue Ton Kilometers (RTK) of CAD 1,271 m.

Figure 106: Cargo Airline Ranking 2007


Ranking Cargo traffic Cargo
Airline Country change change
2007 RTK m revenue $ m
1 FedEx USA 16,008 4.0% 24,421 7.7%
2 Air France-KLM France 11,365 3.4% 4,181 11.4%
3 United Parcel Service USA 9,93 8.5% 4,788 27.0%
4 Korean Air South Korea 9,677 9.3% 2,73 9.4%
5 Cathay Pacific China 8,9 18.4% 2,082 13.5%

35 Continental Airlines USA 1,38 (3.8%) 453 (0.9%)
36 Qatar Airways Qatar 1,321 45.2% 354 39.5%
37 Air Canada Canada 1,271 10.8% 516 (5.7%)
Source: Flight Global

WestJet / WestJet Cargo

WestJet was founded in 1996 by a team of Calgary entrepreneurs. With 220


employees, they began service on February 29th, 1996, to five cities in
Western Canada.

WestJet handled 14.3 m passengers in 2008 and generated revenue of USD


2,388.7 m.

Market Potential Analysis for Windsor International Airport

86
Figure 107: WestJet
Revenue (m USD), 2008 2,388.7
Passengers (m), 2008 14.3
Net Profit (USD m), 2008 166.9
Employees, 2008 6.187
Fleet 79
Destinations 47
Source: Air Transport Intelligence

Since 1997 the cargo business of WestJet is performed by ELS Marketing


Inc., a supplier of air freight related services and products. ELS Marketing
Inc. is responsible for sales, marketing, accounting and administrative func-
tions of West Jets cargo product. WestJet Cargo operates a fleet of 737-
600, 737-700 and 737-800 series aircraft. It operates about 300 flight depar-
tures daily from 30 Canadian cities.
Commodities flown by WestJet Cargo include live tropical fish, lobsters,
Canada post mail, mining equipment and auto parts.

Air Transat / Air Transat Cargo

Air Transat is a wholly-owned subsidiary of Tour Operator Transat A.T., op-


erating scheduled and charter services out of five major bases in Canada.
Primary summer season destinations are those in Europe and the Carib-
bean, while winter destinations are primarily in the Caribbean, Mexico, USA
and South America. Air Transat also operates year-round scheduled flights
from Canada to Europe as well as to the USA (Florida) and some Caribbean
countries. The airline is also the designated 'flag carrier' between Canada
and Cuba.

In 2008 the airline achieved USD 700 m in revenue and handled 3.2 m pas-
sengers.

Figure 108: Air Transat


Revenue (m USD), 2008 700.0
Passengers (m), 2008 3.2
Employees, 2008 3,051
Fleet 19
Destinations 36
Source: Air Transport Intelligence

Air Transat Cargo provides direct cargo services from Canada to Europe,
the Caribbean and Latin America. The airline can carry oversize, bulky and
heavy items as well as dangerous goods. Airline Services International Inc.

Market Potential Analysis for Windsor International Airport

87
is Air Transat Cargos new air cargo partner and manages and promotes its
air cargo products and services within Canada.

CargoJet Airways

CargoJet Airways is Canada's leading provider of time-sensitive overnight air


cargo services. The airline transports approximately 401.4 tons of air cargo
every business night over its North American network and also offers full
aircraft charters.

In 2008 CargoJet Airways generated revenue of USD 192.7 m with its fleet
of 12 aircraft.

Figure 109: CargoJet Airways


Revenue (m USD), 2008 192.7
Net profit (m USD), 2008 -0.3
Employees, 2008 406
Fleet 12
Destinations 12
Source: ATI

CargoJet offers special cargo services to transport live animals, pharmaceut-


ical products and high-value cargo products to North American destinations.

Market Potential Analysis for Windsor International Airport

88
5.4.2 Other Regional and Cargo Airlines

The following table gives an overview of smaller regional airlines and some
cargo airlines in Canada.

Figure 110: Other regional and cargo airlines


Airline Operational
Revenue Service
Base

Passenger, Cargo,
Montreal n/a
Domestic

24.0 million Passenger, Cargo,


Val d'Or
USD (1995) Domestic

Passenger, Cargo,
Toronto n/a
International

21.0 million Passenger, Cargo,


Dorval
USD (1994) Regional

Passenger, Cargo,
St. John's n/a
Regional

Fort McMur- Passenger, Cargo,


n/a
ray Regional

Passenger, Cargo,
Whitehorse n/a
International

Passenger, Cargo,
Iqaluit n/a
International

Baie Com- Passenger, Cargo,


n/a
eau Regional

Passenger, Cargo,
Yellowknife n/a
Domestic

Inuvik n/a Passenger, Domestic

Passenger, Regional,
Medicine Hat n/a
Alberta Citylink Domestic

Cargo, International,
Edmonton n/a
Alta Flights Regional

Market Potential Analysis for Windsor International Airport

89
Arctic Yellowknife n/a Passenger, Cargo
Sunwest Charters
Passenger, Cargo,
Medicine Hat n/a
International

Sioux Passenger, Cargo,


n/a
Lookout Regional

Buffalo Passenger, Cargo,


Hay River n/a
Airways Ltd Regional

Passenger, Cargo,
Thompson n/a
Calm Air Regional

Canadian
London n/a Passenger, Domestic
Metro Airlines

Yellowknife n/a Passenger, Regional

Passenger, Interna-
Enfield n/a
tional, Domestic

Central 30.0 million Passenger, Cargo,


Smithers
Mountain Air USD (1998) International

Calgary n/a Passenger

Calgary n/a Passenger, Domestic

128 million Passenger, Cargo,


Kanata
USD (2000) International

Kelowna n/a Passenger, Cargo

Globemaster Air
Edmonton n/a Cargo
Cargo
Passenger, Cargo,
Vancouver n/a
Domestic

Passenger, Cargo,
Terrace n/a
Regional

Passenger, Cargo,
Port Alberni n/a
International

Market Potential Analysis for Windsor International Airport

90
Passenger, Cargo,
Kelowna n/a
International

Passenger, Cargo,
Calgary n/a
International
Passenger, Cargo,
Winnipeg n/a
Domestic

Victoria n/a Cargo, International

Cargo, Regional,
Edmonton n/a
Domestic
Passenger, Cargo,
Mirabel n/a
International
International, Re-
Fort St John n/a
gional
Norman Passenger, Cargo,
n/a
Wells Domestic

Passenger, Cargo,
Montreal n/a
International

Passenger, Cargo,
Fort Smith n/a
Regional
Passenger, Cargo,
Richmond n/a
Regional
Passenger, Cargo,
Winnipeg n/a
Regional
Passenger, Interna-
Toronto n/a
Porter Airlines tional, Regional
Charlotte- Passenger, Cargo,
n/a
town Domestic
Passenger, Cargo,
Calgary n/a
International
Passenger, Cargo,
Toronto n/a
International
Passenger, Cargo,
Richmond n/a
Regional,
Passenger, Interna-
Toronto n/a
tional
Passenger, Cargo,
Prince Albert n/a
Regional
Passenger, Cargo,
North Bay n/a
International

Market Potential Analysis for Windsor International Airport

91
Passenger, Cargo,
Thunder Bay n/a
Regional
Passenger, Cargo,
Vancouver n/a
Regional
WestCan Interna- Cargo, International,
Edmonton n/a
tional Airlines Regional
World Star Air Cargo, International,
Mississauga n/a
Cargo Regional
Source: ATI

Market Potential Analysis for Windsor International Airport

92
6. Air Cargo Forecast

The methodology of the Air Cargo Forecast was described in detail in chap-
ter 3. This chapter describes and presents the results of the Air Cargo Fore-
cast. Primarily it outlines the influence factors that have been considered in
the Forecast and describes which impact these influence factors have on the
three scenarios (Optimistic, Conservative and Most Likely Scenario).

6.1 Influence Factors

As mentioned in chapter 3.5 (page 20) the following specific micro and ma-
cro-economic influence factors (which have an impact on YQGs air cargo
development) have been defined:

Specific micro-economic influence factors


Development of Air Cargo Related Facilities
Distribution Centers
Airline Marketing / Air Service Development

Specific macro-economic influence factors


Pre-Clearance Facility
Stimulus Packages and Local Business Development

The influence factors are described briefly in the next chapters. How the
influence factors affect the three different scenarios is explained in chapter
6.2.

6.1.1 Development of Air Cargo Related Facilities

YQG is presently handicapped in its cargo development as it lacks specific


cargo handling and storage facilities. The ability to handle cargo is rudimen-
tary and not in line with international handling practices. The establishment
of a modern, efficient Air Cargo Terminal to accommodate general and spe-
cial cargo (e.g. perishables, valuable cargo) with supporting facilities (e.g.
for forwarders and logistical service providers) would be a major step for
YQG towards becoming a full-service airport. It would also boost the com-
petitive position of YQG and be a prerequisite in attracting cargo business to
YQG.

6.1.2 Distribution Centers

Traditional and recent distribution centers (e.g. e-commerce fulfillment) rely


on fast, safe and efficient logistical solutions. While trucking plays an impor-
tant role for short and medium distances, only the employment of (all cargo)
aircraft will make meeting delivery times possible over long distances. There-

Market Potential Analysis for Windsor International Airport

93
fore the settlement of distribution centers (on or off-airport) is likely to gener-
ate air cargo for YQG (one way or to/from YQG).

6.1.3 Airline Marketing / Air Service Development

YQG is presently suffering from a lack of uplift capacity. The volume current-
ly transported is almost entirely based on the occasional charter flight. Due
to the lack of scheduled uplift capacity, YQG is not being recognized as a
cargo airport by either forwarders or shippers. Field research has shown that
shippers would be inclined to ship through YQG if cargo capacity were pro-
vided on a regular basis. The demand for cargo capacity by local and re-
gional shippers adds to the attraction of YQG as airlines are increasingly
interested in the revenues from transporting cargo.

6.1.4 Pre-Clearance Facility

Being able to pre-clear US-bound cargo at a facility at YQG would eliminate


the need to undergo time-consuming checks and inspections at the Canada-
US border crossings. It would make YQG interesting as a port of entry for
US-bound goods, whether they reach YQG by truck or air. Onward transpor-
tation by truck may occur on RFS or Flying Trucks. Similar to the RFS trans-
ports, the Flying Trucks are mainly used in Canada and the US. These
trucks feed the cargo into the large airport gateways, e.g. in the US, for on-
ward long-distance transportation but are not operated under a flight num-
ber. However the units are built up completely on aircraft pallets (or contain-
ers) and all paperwork is also finished at the origin station or forwarder
warehouse. Windsor would be an ideal location as it is bypassed by signifi-
cant truck traffic.

6.1.5 Stimulus Packages and Local Business Development

In line with other industrialized countries, Canada has passed an economic


stimulus package to give a jumpstart to the contracting economy. In 2009,
the plan (CAD 40 bn over 5 years) is expected to raise the GDP by 1.4%.
Similarly, the USA has passed a stimulus package of far greater magnitude.

On the state and regional level, various programs exist to facilitate and at-
tract business development (e.g. Funding Programs for the Manufacturing
Sector). Potentially, companies thus attracted to set up shop in the vicinity of
the airport may generate air cargo.

Market Potential Analysis for Windsor International Airport

94
6.2 Assumptions for the three Forecast Scenarios

Lufthansa Consulting has applied the scenario technique as described in


detail in the methodology section of this report. Basic assumptions for the
three scenarios (conservative, most likely, optimistic) are as follows consi-
dering all influence factors mentioned in the prior chapters.

Most Likely Scenario


The results of the most likely scenario are the traffic volumes to be expected
with the highest probability as of today. It is based on current expectations
and the most viable forecast for the future development. Expert opinions are
reflected in the respective assumptions for the various market segments.
Key assumptions for the development of specific segments are outlined in
the following paragraphs.

Specific micro-economic influence factors:


Development of Air Cargo Related Facilities: A full-service cargo facility is
operational in 2011, catering to the requirements of all cargo products
and players. However, the cargo community is slow to react and the ef-
fects for YQG are medium-term.
Distribution Centers: Off-airport Distribution Centers contribute to the
growing cargo throughput at YQG: These effects have an impact after
2012 and trucked air cargo is most likely to be the transport mode. Char-
ter traffic will increase only in the long-term.
Airline Marketing / Air Service Development: Positive effects can be ex-
pected in the short-term (2010), however, they will be based on charter
traffic only. More supply of belly capacity on passenger aircraft is ex-
pected to occur as early as 2012 due to larger aircraft and increased fre-
quencies.

Specific macro-economic influence factors:


Pre-Clearance Facility: The pre-clearance facility is functional only after
2016; however the situation at the border is not that critical in terms of
processing delays (2nd bridge/border crossing). Therefore the pre-
clearance facility will only induce some trucked and charter cargo.
Stimulus Packages and Local Business Development: GDP develop-
ment, consumer spending and air cargo growth are closely correlated
and there is a positive effect on air cargo for YQG as early as 2011. Spe-
cial programs geared towards business development lead to the reloca-
tion of companies that generate moderate amounts of air cargo. This ef-
fect can take place as early as 2013.

Optimistic Scenario
For the optimistic scenario it is expected that air cargo volumes are based
on more favorable macro and micro economic and business conditions. Ad-
ditionally the assumptions of the determinants have been altered according-

Market Potential Analysis for Windsor International Airport

95
ly. The influence factors for the optimistic scenario are as follows.

Specific micro-economic influence factors:


Development of Air Cargo Related Facilities: A full-service cargo facility is
established, catering to the requirements of all cargo products and play-
ers. The air cargo effects for YQG are sizeable, but mid-term
Distribution Centers: Distribution Centers are set up as part of the YQG
Air Cargo Village with the explicit intent of expediting shipments by air.
The effect therefore is substantial; however, it is not likely to occur before
2012. Charter traffic will increase only in the long-term.
Airline Marketing / Air Service Development: Substantial increases in
uplift capacity are based on charter flights in the short term. More supply
of belly capacity on passenger aircraft is expected to occur as early as
2012 due to larger aircraft and increased frequencies.

Specific macro-economic influence factors:


Pre-Clearance Facility: The pre-clearance facility as part of the Cargo
Village at YQG is a full-service facility (customs, security, phytosanitary
etc.) and operational as early as 2013. Cargo handling services and
trucker facilities are provided close by, minimizing costs and time. Delays
at the border persist and sizeable amounts of trucked cargo and charter
cargo are rerouted through YQG.
Stimulus Packages and Local Business Development: GDP develop-
ment, consumer spending and air cargo growth are closely correlated
and there is a very positive, short term effect on air cargo for YQG. Spe-
cial programs geared towards business development lead to the reloca-
tion of companies that generate considerable amounts of air cargo. In the
case of some companies, the vicinity of the airport is sought out specifi-
cally as air cargo transport is an important part of their logistics. Such ef-
fect is likely to take place as early as 2012.

Conservative Scenario
For the conservative scenario it is expected that air cargo volumes are
based on less favorable macro and micro economic and business condi-
tions. The assumptions of the influence factors have been altered according-
ly. The influence factors for the conservative scenario are as follows.

Specific micro-economic influence factors:


Development of Air Cargo Related Facilities: A basic cargo facility is es-
tablished but only low volumes are generated.
Distribution Centers: Moderate amounts of air cargo are generated by
Distribution Centers in the vicinity of YQG. The effect therefore is sub-
stantial; however, it is not likely to occur before 2012. Charter traffic will
increase only in the long-term.
Airline Marketing / Air Service Development: Positive effects on a limited
scale can be expected in the short-term. However, they will be based on
charter traffic only. More supply of belly capacity on passenger aircraft is

Market Potential Analysis for Windsor International Airport

96
expected to occur as early as 2014 due to larger aircraft and increased
frequencies.

Specific macro-economic influence factors:


Pre-Clearance Facility: No agreement could be reached between the US
and Canadian authorities on establishing a pre-clearance facility
Stimulus Packages and Local Business Development: The federal stimu-
lus package leads to a moderate short-term increase in demand for air
cargo services to and from YQG. The effect of regional business pro-
grams is noticeable only after 2015.

Market Potential Analysis for Windsor International Airport

97
6.3 Cargo Forecast Results

The cargo forecast is derived by consolidating all cargo segments as men-


tioned in chapter 3.4. The key assumptions of the forecast are described
above. Overall the impacts result in an average growth rate for the forecast
period (2009-2034) of 28.17% in the most likely scenario. The average
growth rate for this period will be higher in the optimistic scenario (28.84%)
and lower in the conservative scenario (26.67%).

The average growth rates are rather high as Windsor International Airport
starts off the cargo business with a very low cargo volume. The growth rates
in the short term (2007-2011) are expected to be much higher in the most
likely scenario 161.62%, 185.50% in the optimistic scenario and 146.50% in
the conservative scenario respectively. It is expected that in the long term
the growth rates will slow down in all three scenarios. The average growth
rates are an outcome of all assumptions made and the GDP related growth
of the relevant market.

Figure 111: Aggregated Average Growth Rate of the Total Cargo Fore-
cast

Source: Lufthansa Consulting

The results of the cargo forecast within the three scenarios are shown be-
low. A detailed list including all tonnage data for the shown forecast can be
found in Annex I (page 103). A detailed presentation of each scenario is
given in the next chapters.

Figure 112: Total Air Cargo Forecast all three Scenarios


metric tons
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2028
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027

2029
2030
2031
2032
2033
2034

Total Cargo Most Likely Total Cargo Conservative Total Cargo Optimistic

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

98
6.3.1 Most Likely Scenario

In terms of cargo volumes, it is expected that the total cargo tonnage at


Windsor International Airport will grow from 161 tons in 2009 to 79,708 tons
in 2034 in the most likely scenario. All data that is shown in the form of
graphs in this chapter can be found in Annex I chapter 8.1 in tonnage figures
for each year.

Figure 113: Most Likely Air Cargo Forecast for YQG


metric tons
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2011

2014

2017

2019
2020

2022
2023

2025
2026

2028
2029

2031

2034
2009
2010

2012
2013

2015
2016

2018

2021

2024

2027

2030

2032
2033
Source: Lufthansa Consulting

As outlined in chapter 6.2 the different influence factors have been exactly
defined for each scenario. The figure below shows at which points the differ-
ent influence factors have been assumed to have an impact on the cargo
tonnage in YQG for the most likely scenario. It is expected that especially in
the beginning the specific micro-economic influence factors are of higher
importance to start off the cargo business in Windsor.

Figure 114: Impact of Influence Factors on Most Likely Scenario


Metric tons
100,000

90,000

80,000 3 Airline Marketing / Air Service Development

1 Air Cargo related Facilities


70,000
2 Distribution Center
60,000 2
3
50,000

40,000

30,000

20,000 1 Pre-Clearance Facilities

10,000
2 Stimulus Packages & Local Business Development
0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

99
Differing from passenger air transport, air cargo normally carries an imbal-
ance between inbound and outbound cargo i.e. imported and exported ton-
nage is not alike. For the Air Cargo Forecast for Windsor International Air-
port this effect is not valid. As shown below it is expected that there is only
slightly more inbound cargo but in general no significant difference is fore-
casted. The detailed data is included in the present report in Annex I chapter
8.1, Figure 123 (page 107).

Figure 115: Most Likely Scenario Inbound vs. Outbound


Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034
Inbound Cargo - Most Likely Outbound Cargo - Most Likely

Source: Lufthansa Consulting

Although the majority of the expected air cargo tonnage is international, the
percentage of domestic cargo grows towards 2034 compared to international
air cargo.

Figure 116: Most Likely Scenario International vs. Domestic


Metric tons
100,000

90,000

80,000

70,000
36.8 %
60,000

50,000

40,000
30.8 %
30,000 63.2 %

20,000
69.2 %
10,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

International Cargo - Most Likely Domestic Cargo - Most Likely

Source: Lufthansa Consulting

Road Feeder Services (RFS) and Charter Traffic create the majority of the
cargo tonnage for YQG (for detailed data refer to Annex I chapter 8.1, Figure
124 page 108). The dominance of the forecasted cargo tonnage that is
created by RFS reflects the role of Windsor as a transit location for cargo

Market Potential Analysis for Windsor International Airport

100
being unloaded from trucks crossing the border between the U.S. and Can-
ada.

Figure 117: Most Likely Scenario Comparison of Cargo Segments


Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Scheduled Cargo - Most Likely Charter Cargo - Most Likely Integrator Cargo - Most Likely RFS (Trucking) - Most Likely

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

101
6.3.2 Optimistic Scenario

In the optimistic scenario it is forecasted that the air cargo tonnage will grow
from 161 metric tons in 2009 to 90,713 metric tons in 2034.

Figure 118: Optimistic Air Cargo Forecast for YQG


metric t ons
100, 000
90, 000
80, 000
70, 000
60, 000
50, 000
40, 000
30, 000
20, 000
10, 000
0
2011

2014

2016
2017

2019
2020

2022
2023

2025

2028

2031

2034
2009
2010

2012
2013

2015

2018

2021

2024

2026
2027

2029
2030

2032
2033
Source: Lufthansa Consulting

All further figures and data concerning the optimistic scenario are included in
Annex I chapter 8.2 (starting on page 110).

6.3.3 Conservative Scenario

In the conservative scenario it is projected that the air cargo tonnage will
grow from 161 metric tons in 2009 to 59,349 metric tons in 2034.

Figure 119: Conservative Air Cargo Forecast for YQG

metric tons
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2010

2015
2009

2011
2012
2013
2014

2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034

Source: Lufthansa Consulting

All further figures and data concerning the conservative scenario are in-
cluded in Annex I chapter 8.3 (starting on page 113).

Market Potential Analysis for Windsor International Airport

102
7. Recommendations

Considering the remarkable business forces and competition surrounding


the issue of air cargo potential for YQG, it is important to point out that
certain steps will have to be taken to realize this potential. While the recom-
mendations outlined below are by no means complete, in all cases further
deliberation is needed.

7.1.1 Development of Air Cargo related facilities

On the supply side, the establishment of a modern, efficient air cargo ter-
minal catering to the needs of YQG has been recognized as one of the
prerequisites in attracting cargo business to YQG. Lufthansa Consulting
recommends a comprehensive methodology to ensure project success by

meeting medium and long term capacity requirements


meeting international service standards required by the terminal operator,
airlines, trucking companies and other customers
achieving competitive rental, operating and handling costs
providing flexibility in view of possible changes in the economic environ-
ment, new commodities, cargo volume growth and shipment structures
allowing promotion and marketing of special product categories and ser-
vices

The development of YQGs air cargo terminal should be preceded by the


definition of specific planning parameters, as there is no cookie-cutter ap-
proach in the design. While forecast figures provide the basis for capacity
and space calculations, other parameters like peak time conditions, dwell
times, shipment characteristics etc. have to be taken into account. In design-
ing the facility, a phased, modular approach is recommended to enable the
facility to grow with demand. Based on the findings of this study, the han-
dling and transitory storage of perishable cargo must be possible. However,
since these special storage areas are costly to build and operate, the design
should be modular and flexible. The air cargo terminal will have full air/truck
intermodal capability to allow for safe and speedy handling of cargo.
Based on the forecasted volumes, no automated processing of cargo is fo-
reseen; i.e. cargo will be handled by skilled workers operating mobile
equipment.
Potential sites for the cargo terminal will be evaluated according to estab-
lished evaluation criteria in close cooperation with all stakeholders (YQG,
Transport Canada, City Planning etc.) under consideration of a potential
future integration into a Cargo Village or related projects.

Market Potential Analysis for Windsor International Airport

103
7.1.2 Airline Marketing / Air Service Development

As pointed out before, the lack of uplift capacity severely hampers the cargo
development of YQG. If cargo capacity would be provided on a regular ba-
sis, shippers and forwarders would be inclined to consider YQG for their
cargo business.
The development of regular services therefore should be prioritized by utiliz-
ing a comprehensive, time-tested approach as outlined below:

Figure 120: Air Service Development Approach

ASD Analysis & Training Implementation

Phase 1 - Phase 2 Phase 3 - Phase 4-


Phase 0 -
Market Positioning Traffic Development Marketing Implementation
Kick-off
Strategy Concept Action Plan Support

Create common Quick Traffic analysis Define necessary Participate in


understanding assessment on Development of marketing action individual airline
airports current top five route from the route meetings
Set-up project
market strategy studies studies Industry event /
framework
Analyze Selection and Provide marketing route conference
Objectives

Introduce project
weaknesses analysis of tools for client support
members
Draft marketing
Agree on project Indentify business potential airlines
plan/schedule to
plans, responsible opportunities Prepare a
approach market
persons Define market comprehensive
niches and route profitability Train staff on
general airline
develop future
position of airport marketing
techniques

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

104
7.1.3 Development of the Cargo Village

If YQG became part of an extended Cargo Village, not only would the City of
Windsor and Windsor-Essex County benefit in terms of business develop-
ment, revenues and new jobs, but YQG itself would likely benefit from the
demand for air cargo services (and passenger services) generated within the
Cargo Village. The medium to long term objective therefore should be to
plan, design and develop a Cargo Village at YQG that will become a multi-
modal gateway, incorporating airport and surrounding industrial areas, to-
gether with rail links and trucking facilities, to attract, bundle and channel the
international movement of cargo to and from points in North America. In
realizing this project, the following steps should be taken:

Figure 121: Development of the Cargo Village

Identification of Development Tasks Development of Cargo Village Concept

Upgrade of the airport master plan Integration of issues like urban planning,
zoning, tenant requirements, land- use
Integration of airport and off-airport areas hierarchies and compatibility, ecology,
Intermodal integration accessibility, security, sustainability,
investor issues
Development of the traffic infrastructure
and utilities Coordination with all pertinent stakeholders

Environmental aspects Engagement of the stakeholders in


providing solution-oriented input
Site selection
Representation of the interests of YQG in
Security requirements Cargo Village-related matters
(Consultations, presentations, workshops
Layout design of the Cargo Village incl. etc.)
options
Tailor business packages to specific
Incorporation of regulatory requirements, industries
guidelines and standards
Develop incentives for potential investors /
users

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

105
8. Annex I - Cargo Forecast Data by Scenario

Figure 122: Data for Total Forecast all three Scenarios


metric t ons
100, 000
90, 000
80, 000
70, 000
60, 000
50, 000
40, 000
30, 000
20, 000
10, 000
0
2011

2014

2016
2017

2019
2020

2022

2025

2028

2030

2033
2009
2010

2012
2013

2015

2018

2021

2023
2024

2026
2027

2029

2031
2032

2034
Total Cargo Most Likely Total Cargo Cons ervat ive Total Cargo Optimistic

Year Most Likely Conservative Optimistic


2009 161 161 161
2010 263 245 265
2011 7,391 5,975 10,393
2012 14,488 11,023 18,916
2013 18,133 12,859 27,461
2014 19,718 14,642 30,516
2015 26,121 17,240 34,746
2016 30,396 18,206 37,357
2017 35,283 19,542 43,106
2018 38,913 22,130 46,076
2019 41,173 24,459 53,596
2020 48,500 31,822 56,671
2021 53,175 33,144 60,366
2022 54,999 35,825 62,273
2023 57,010 38,638 65,693
2024 58,942 40,360 67,724
2025 60,907 42,113 71,868
2026 62,441 43,437 73,526
2027 66,316 45,017 76,486
2028 68,171 47,672 78,456
2029 70,057 49,326 80,459
2030 71,982 51,015 82,501
2031 73,863 52,658 84,502
2032 75,773 54,328 86,533
2033 78,149 58,020 89,031
2034 79,708 59,349 90,713
Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

106
8.1 Most Likely Scenario

Figure 123: Data for Most Likely Scenario Inbound vs. Outbound
Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034
Inbound Cargo - Most Likely Outbound Cargo - Most Likely

Year Inbound Outbound Total


2009 93 68 161
2010 111 152 263
2011 3,789 3,603 7,391
2012 9,528 4,960 14,488
2013 11,587 6,546 18,133
2014 12,386 7,333 19,718
2015 14,718 11,403 26,121
2016 15,999 14,397 30,396
2017 18,542 16,742 35,283
2018 20,458 18,455 38,913
2019 21,660 19,513 41,173
2020 25,099 23,401 48,500
2021 27,499 25,676 53,175
2022 28,493 26,506 54,999
2023 29,648 27,363 57,010
2024 30,729 28,213 58,942
2025 31,829 29,077 60,907
2026 32,680 29,761 62,441
2027 34,721 31,595 66,316
2028 35,755 32,417 68,171
2029 36,806 33,252 70,057
2030 37,879 34,103 71,982
2031 38,926 34,937 73,863
2032 39,989 35,784 75,773
2033 41,322 36,827 78,149
2034 42,181 37,527 79,708
Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

107
Figure 124: Data for Most Likely Scenario International vs. Domestic
Metric tons
100,000

90,000

80,000

70,000
36.8 %
60,000

50,000

40,000
30.8 %
30,000 63.2 %

20,000
69.2 %
10,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034
International Cargo - Most Likely Domestic Cargo - Most Likely

Year International Domestic Total


2009 154 7 161
2010 256 7 263
2011 5,744 1,647 7,391
2012 8,284 6,204 14,488
2013 11,285 6,847 18,133
2014 12,270 7,448 19,718
2015 17,980 8,141 26,121
2016 21,448 8,948 30,396
2017 25,344 9,939 35,283
2018 27,964 10,949 38,913
2019 28,511 12,662 41,173
2020 34,126 14,374 48,500
2021 37,894 15,281 53,175
2022 38,791 16,208 54,999
2023 39,600 17,410 57,010
2024 40,378 18,565 58,942
2025 41,165 19,741 60,907
2026 41,887 20,554 62,441
2027 44,739 21,576 66,316
2028 45,547 22,624 68,171
2029 46,369 23,688 70,057
2030 47,203 24,778 71,982
2031 47,976 25,887 73,863
2032 48,757 27,017 75,773
2033 49,552 28,597 78,149
2034 50,357 29,350 79,708
Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

108
Figure 125: Data for Most Likely Scenario Comparison of Segments
Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Scheduled Cargo - Most Likely Charter Cargo - Most Likely Integrator Cargo - Most Likely RFS (Trucking) - Most Likely

Scheduled Charter Integrator


Year RFS (Trucking) Total
Cargo Cargo Cargo
2009 7 154 0 0 161
2010 7 256 0 0 263
2011 11 964 0 6,416 7,391
2012 1,151 1,278 0 12,058 14,488
2013 2,028 1,693 0 14,411 18,133
2014 2,158 1,876 0 15,684 19,718
2015 2,448 3,962 0 19,711 26,121
2016 2,665 5,329 0 22,401 30,396
2017 4,027 5,460 0 25,797 35,283
2018 4,075 5,593 0 29,245 38,913
2019 4,165 5,728 0 31,280 41,173
2020 5,540 5,865 0 37,095 48,500
2021 5,606 6,004 1,076 40,489 53,175
2022 5,674 6,392 1,089 41,844 54,999
2023 5,739 6,723 1,101 43,447 57,010
2024 5,805 6,944 1,114 45,079 58,942
2025 5,871 7,169 1,127 46,740 60,907
2026 5,941 7,398 1,139 47,963 62,441
2027 6,008 7,631 1,152 51,524 66,316
2028 6,081 7,869 1,165 53,057 68,171
2029 6,149 8,111 1,178 54,619 70,057
2030 6,224 8,357 1,192 56,210 71,982
2031 6,294 8,531 1,205 57,833 73,863
2032 6,366 8,707 1,219 59,482 75,773
2033 6,866 8,886 1,233 61,165 78,149
2034 6,516 9,068 1,247 62,877 79,708

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

109
8.2 Optimistic Scenario

Figure 126: Data for Optimistic Scenario Inbound vs. Outbound


Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
Inbound Cargo - Optimistic Outbound Cargo - Optimistic

Year Inbound Outbound Total


2009 93 68 161
2010 111 154 265
2011 5,699 4,695 10,393
2012 12,380 6,535 18,916
2013 14,835 12,626 27,461
2014 16,431 14,085 30,516
2015 18,529 16,217 34,746
2016 19,940 17,418 37,357
2017 22,931 20,176 43,106
2018 24,522 21,554 46,076
2019 27,744 25,852 53,596
2020 29,287 27,384 56,671
2021 31,221 29,144 60,366
2022 32,259 30,014 62,273
2023 34,119 31,574 65,693
2024 35,252 32,473 67,724
2025 37,443 34,425 71,868
2026 38,357 35,169 73,526
2027 39,942 36,544 76,486
2028 41,035 37,422 78,456
2029 42,146 38,313 80,459
2030 43,279 39,222 82,501
2031 44,387 40,114 84,502
2032 45,513 41,020 86,533
2033 46,909 42,122 89,031
2034 47,831 42,883 90,713
Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

110
Figure 127: Data for Optimistic Scenario International vs. Domestic
Metric tons
100,000

90,000

80,000
34.8 %
70,000

60,000

50,000
24.8 %
40,000

30,000 65.2 %

20,000 75.2 %

10,000

0
09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
International Cargo - Optimistic Domestic Cargo - Optimistic

Year International Domestic Total


2009 154 7 161
2010 258 7 265
2011 8,746 1,647 10,393
2012 11,869 7,046 18,916
2013 19,823 7,638 27,461
2014 22,185 8,332 30,516
2015 25,793 8,953 34,746
2016 27,588 9,769 37,357
2017 32,336 10,771 43,106
2018 34,285 11,791 46,076
2019 40,291 13,305 53,596
2020 41,334 15,337 56,671
2021 44,110 16,256 60,366
2022 45,079 17,194 62,273
2023 47,285 18,407 65,693
2024 48,151 19,573 67,724
2025 51,107 20,761 71,868
2026 51,941 21,585 73,526
2027 52,826 23,659 76,486
2028 53,726 24,730 78,456
2029 54,640 25,819 80,459
2030 55,568 26,933 82,501
2031 56,436 28,066 84,502
2032 57,312 29,220 86,533
2033 58,205 30,826 89,031
2034 59,109 31,604 90,713
Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

111
Figure 128: Data for Optimistic Scenario Comparison of Segments
Metric tons
100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
International Scheduled Cargo - Optimistic International Charter Cargo - Optimistic
International Integrator Cargo - Optimistic International RFS (Trucking) - Optimistic

Scheduled Charter Integrator


Year RFS (Trucking) Total
Cargo Cargo Cargo
2009 7 154 0 0 161
2010 7 258 0 0 265
2011 1,511 1,566 0 7,316 10,393
2012 2,331 1,808 0 14,777 18,916
2013 2,761 5,151 0 19,549 27,461
2014 3,083 5,377 0 22,056 30,516
2015 3,142 8,690 0 22,914 34,746
2016 3,367 8,932 0 25,058 37,357
2017 3,411 9,130 0 30,566 43,106
2018 4,778 9,307 0 31,991 46,076
2019 4,876 9,487 1,638 37,595 53,596
2020 4,934 9,668 1,704 40,364 56,671
2021 4,992 9,852 1,724 43,798 60,366
2022 5,054 10,284 1,744 45,190 62,273
2023 6,438 10,660 1,764 46,832 65,693
2024 6,511 10,926 1,784 48,503 67,724
2025 6,585 11,196 1,805 52,282 71,868
2026 6,664 11,470 1,825 53,568 73,526
2027 6,739 11,749 1,845 56,152 76,486
2028 6,819 12,033 1,866 57,737 78,456
2029 6,897 12,323 1,887 59,352 80,459
2030 6,979 12,617 1,909 60,996 82,501
2031 7,059 12,839 1,931 62,674 84,502
2032 7,139 13,063 1,952 64,378 86,533
2033 7,647 13,292 1,975 66,117 89,031
2034 7,307 13,524 1,997 67,885 90,713

Source: Lufthansa Consulting

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8.3 Conservative Scenario

Figure 129: Data for Conservative Scenario Inbound vs. Outbound


Metric tons
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Inbound Cargo - Conservative Outbound Cargo - Conservative

Year Inbound Outbound Total


2009 93 68 161
2010 111 134 245
2011 3,144 2,832 5,975
2012 7,155 3,868 11,023
2013 8,064 4,795 12,859
2014 8,893 5,749 14,642
2015 10,451 6,789 17,240
2016 11,047 7,159 18,206
2017 11,828 7,714 19,542
2018 13,237 8,893 22,130
2019 14,487 9,971 24,459
2020 18,843 12,979 31,822
2021 19,614 13,530 33,144
2022 21,043 14,782 35,825
2023 22,620 16,018 38,638
2024 23,621 16,739 40,360
2025 24,641 17,473 42,113
2026 25,411 18,026 43,437
2027 26,329 18,687 45,017
2028 27,789 19,883 47,672
2029 28,749 20,576 49,326
2030 29,731 21,284 51,015
2031 30,685 21,972 52,658
2032 31,656 22,672 54,328
2033 33,934 24,086 58,020
2034 34,708 24,641 59,349
Source: Lufthansa Consulting

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Figure 130: Data for Conservative Scenario International vs. Domestic
Metric tons
100,000

90,000

80,000

70,000

60,000

50,000
44.6 %
40,000

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20,000 41.3 %
55.4 %
10,000
58.7 %
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International Cargo - Conservative Domestic Cargo - Conservative

Year International Domestic Total


2009 154 7 161
2010 238 7 245
2011 4,328 1,647 5,975
2012 6,259 4,763 11,023
2013 7,532 5,326 12,859
2014 8,594 6,048 14,642
2015 10,569 6,671 17,240
2016 10,933 7,273 18,206
2017 11,297 8,245 19,542
2018 12,708 9,422 22,130
2019 14,352 10,107 24,459
2020 20,345 11,477 31,822
2021 20,794 12,350 33,144
2022 22,581 13,243 35,825
2023 24,238 14,400 38,638
2024 24,841 15,519 40,360
2025 25,452 16,662 42,113
2026 25,997 17,440 43,437
2027 26,590 18,427 45,017
2028 28,233 19,439 47,672
2029 28,859 20,467 49,326
2030 29,495 21,521 51,015
2031 30,065 22,593 52,658
2032 30,643 23,685 54,328
2033 32,272 25,747 58,020
2034 32,882 26,468 59,349
Source: Lufthansa Consulting

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Figure 131: Data for Conservative Scenario Comparison of Segments
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International Scheduled Cargo - Conservative International Charter Cargo - Conservative
International Integrator Cargo - Conservative International RFS (Trucking) - Conservative

Scheduled Charter Integrator


Year RFS (Trucking) Total
Cargo Cargo Cargo
2009 7 154 0 0 161
2010 7 238 0 0 245
2011 11 588 0 5,376 5,975
2012 611 766 0 9,646 11,023
2013 979 1,174 0 10,706 12,859
2014 1,375 1,590 0 11,677 14,642
2015 1,784 1,804 0 13,652 17,240
2016 1,805 1,963 0 14,437 18,206
2017 1,831 2,054 0 15,657 19,542
2018 2,040 2,146 0 17,944 22,130
2019 2,137 2,271 0 20,051 24,459
2020 3,826 2,367 0 25,629 31,822
2021 3,871 2,465 0 26,809 33,144
2022 3,920 2,823 1,076 28,006 35,825
2023 3,965 3,095 1,089 30,490 38,638
2024 4,010 3,275 1,101 31,974 40,360
2025 4,056 3,458 1,114 33,486 42,113
2026 4,105 3,645 1,126 34,560 43,437
2027 4,152 3,836 1,139 35,890 45,017
2028 4,203 4,030 1,152 38,286 47,672
2029 4,251 4,229 1,165 39,681 49,326
2030 4,303 4,432 1,178 41,102 51,015
2031 4,352 4,560 1,191 42,554 52,658
2032 4,402 4,691 1,205 44,030 54,328
2033 4,879 4,824 1,219 47,097 58,020
2034 4,507 4,960 1,232 48,649 59,349

Source: Lufthansa Consulting

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8.4 Short to long term growth rates

Figure 132: Growth Rates

Source: Lufthansa Consulting

Market Potential Analysis for Windsor International Airport

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Selected shipments originating or destined for the Windsor region*
Shipper Origin Consignee Destination Commodity Weight [kg] Frequency Routing
Panalpina US Detroit n/a Frankfurt Biochemicals 500-1000 1x per week Chicago Frankfurt
Panalpina US Detroit n/a Manchester Pharmaceuticals 300 1x per week Chicago Manchester
Panalpina US Detroit Novartis Switzerland Pharmaceuticals 1500 1x per week Detroit London**
Panalpina US Detroit Region Novartis Switzerland Pharmaceuticals 7500 per month Chicago London
Expeditors CA Windsor/ Toronto n/a several Techincal Equipment n/a frequent Toronto Europe
Expeditors CA Windsor/ Toronto n/a several Mechanics n/a frequent Toronto Europe/ US
Expeditors CA Windsor/ Toronto n/a several Cosmetics n/a frequent Toronto Asia
Expeditors CA Windsor/ Toronto n/a several Toys n/a n/a Toronto Europe/ US
n/a Asia Expeditors CA Toronto/ Windsor Electronics n/a frequent Asia Toronto
n/a Asia/ India Expeditors CA Toronto/ Windsor Textiles n/a frequent Asia/ India Toronto
n/a Japan/ Korea Expeditors CA Toronto/ Windsor Automotive Parts n/a frequent Tokyo/ Seoul Toronto
n/a Europe Expeditors CA Toronto/ Windsor Pharmaceuticals n/a frequent Europe Toronto
n/a Europe Expeditors CA Toronto/ Windsor AoG - Aircraft Spare Parts n/a n/a Europe Toronto
Exel US Detroit Ford/ Chrysler Europe Automotive Parts n/a n/a Detroit/ Chicago London
Exel US Detroit Ford/ Chrysler Europe Automotive Parts n/a n/a Detroit/ Chicago Amsterdam
Exel US Detroit Ford/ Chrysler Europe Automotive Parts n/a n/a Detroit/ Chicago Frankfurt
Ford/ Chrysler Europe Exel US Detroit/ Windsor Automotive Parts n/a n/a Amsterdam Detroit/ Chicago
Ford/ Chrysler Europe Exel US Detroit/ Windsor Automotive Parts n/a n/a Frankfurt Detroit/ Chicago
Ford/ Chrysler China Exel US Detroit/ Windsor Automotive Parts n/a n/a Hongkong Detroit/ Chicago
Automotive Parts
Routings for the Windsor Region

Pharmaceuticals
Expeditors US Detroit n/a Europe/ Asia Consumer Goods 2500 per month Detroit Toronto
Printing Materials
Medical Equipment
Germany/ Asia/ Automotive Parts/ Electron- 1500 1x per week Detroit US gateways
Schenker US Detroit n/a Australia ics/ DG n/a charters Detroit Willow Run several
Latin America Mining Machinery
Consumer Goods/ app. 4000 3x per day Detroit Canada
Purolator US Detroit Purolator CA Canada Electronics/ Video Games app. 4000 2x per day Chicago Canada
etc. app. 4000 5x per day Indianapolis Canada

*including Detroit
9. Annex II Examples of Shippers, Consignees and

**and vice versa

Market Potential Analysis for Windsor International Airport

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