Halifax International Airport Authority
2014 Business Plan
STRENGTH THROUGH STRATEGY:
Making It Happen
Prepared in December, 2013
TABLE OF CONTENTS
A
EXECUTIVE SUMMARY ........................................................................................... 1
PLANNING PROCESS .................................................................................................. 1
2014 BUSINESS PLAN................................................................................................. 2
B
STRATEGIC OVERVIEW ........................................................................................... 3
MISSION, VISION AND VALUES ................................................................................. 3
BUSINESS STRATEGIES .............................................................................................. 4
C
2014 PLAN ..................................................................................................................... 5
ECONOMIC OUTLOOK ............................................................................................... 5
Global Economy................................................................................................... 5
National View ...................................................................................................... 6
Regional View ...................................................................................................... 7
Aviation Industry ................................................................................................. 8
Halifax Stanfield International Airport ............................................................... 9
2014 GOALS ............................................................................................................. 11
FINANCIAL PLAN ...................................................................................................... 13
Revenue ............................................................................................................. 13
Expenses ............................................................................................................ 14
Capital Program ................................................................................................. 14
FINANCIAL SCHEDULES............................................................................................ 16
Proforma Balance Sheet ................................................................................... 16
Proforma Statement of Operations.................................................................. 17
Proforma Statement of Cash Flows .................................................................. 18
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
A
EXECUTIVE SUMMARY
PLANNING PROCESS
Halifax International Airport Authority (HIAA) has a four-tiered planning process to guide airport
operations and development in the short, medium and long term.
The 20-year Master Plan serves as a framework to guide the
long-term development of the facility to meet the needs of the
community, our stakeholders and the industry.
The 10-year Capital and Financial Plan determines
HIAA’s infrastructure and funding requirements over
the plan timeline.
The Strategic Plan covers a five-year period and
includes our Mission, Vision, Values and Goals. It
also includes an assessment of the general
economic conditions expected to prevail, as well
as an evaluation of the current and future state
of the aviation industry.
The annual Business Plan draws its
direction from the Strategic Plan and
creates specific, measurable, actionable,
results-oriented, and time-linked goals to
support our long-term strategies.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
2014 BUSINESS PLAN
The 2014 Business Plan for Halifax International
Airport Authority (HIAA) has been developed
using the 2013-2017 Strategic Plan, and it sets
forth the business strategies and goals for the
upcoming fiscal year from both a qualitative and
quantitative perspective.
Downside risks continue to exist and are
associated with U.S. monetary policy and slowing
growth in the emerging economies. As air
transportation is a derived demand linked to
economic growth, the above factors indicate that
demand for air passenger and cargo services to
and from Halifax will remain uncertain.
The theme for the 2014 Business Plan is
“Strength through Strategy – Making It Happen.”
In 2014, HIAA will focus on the recovery of airline
seat capacity, growth in aeronautical revenue,
and development of non-aeronautical revenue.
From an aeronautical standpoint, HIAA will
concentrate on promoting and growing
opportunities in both passenger and cargo
services. A number of business strategies are
planned to advance increases in cargo with the
extended runway, and passenger volumes
through joint partnerships and service offerings.
Overall, the economic uncertainty and the
stringent capacity discipline by North American
airlines is expected to continue in 2014 and has
led to a conservative outlook for Halifax Stanfield
International Airport (HSIA) in terms of passenger
and capacity projections. Passenger growth is
budgeted to be 1.1% with airline seat capacity
budgeted to increase by 1.4% in 2014.
Operating revenue for 2014 is budgeted at $55.7
million, which represents an increase of 5.0%
over the 2013 forecasted operating revenue. The
budget for net Airport Improvement Fee (AIF)
revenue is $33.9 million for the year, a slight
increase over 2013 forecast.
On the non-aeronautical side, there will be a
focus on diversifying revenue through the growth
of non-aeronautical opportunities. This will be
accomplished through progress of the
commercial development plan and expansion of
the domestic/international hold room to create
new leasable space. HIAA will continue to build
on its culture of service excellence through “The
Stanfield Way” program.
Operating expenses for 2014 are budgeted at
$51.2 million, a 4.3% increase over the 2013
forecast. HIAA’s operating margin is budgeted at
$4.5 million in 2014. The bottom line excess of
revenue over expenses is budgeted to be $4.5
million for 2014, as other non operating revenues
are anticipated to be offset by other non
operating expenses.
The economic outlook indicates that the global
economy will remain relatively weak, however
the latest indicators point to somewhat better
prospects in the near term with a moderate
acceleration of activity, driven largely by the
advanced economies. Also, the Canada-European
Union Comprehensive Economic and Trade
Agreement (CETA) is expected to bring additional
growth opportunities, especially in the regional
cargo market with the easing of tariffs on fish and
seafood products.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
Capital investment in 2014 will concentrate on
check-in and passenger processing
improvements; advancing the commercial
development plan; groundside road circulation
improvements; and hold room concession
development. The total estimated capital
investment for 2014 is $44.5 million.
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2014 BUSINESS PLAN
Prepared in December, 2013
B
STRATEGIC OVERVIEW
MISSION, VISION AND VALUES
In 2012, as part of the Strategic Planning process, HIAA updated its Mission, Vision and Values as
follows:
Mission
Values
A world-class airport creating prosperity
for our region by connecting Atlantic
Canada to the world through flight
At Halifax International Airport Authority, we
are a team with a common vision and mission.
The foundation of our vision and mission is
built upon our core values. We are committed
to these values to guide us in our decisions,
actions, and behaviours, to support the
success of the organization, each other, and
our stakeholders.
Integrity
We are transparent and behave with integrity.
We accept responsibility for our actions and
take the initiative to improve our airport every
day.
Respect
We value differences and diversity in
individuals. We treat each other and our
environment with respect.
Vision
Great people creating
the best airport community in the world
Inclusive
We promote a trusting, open and inclusive
environment. We approach each interaction
with professionalism and pride and make our
airport a welcome place for employees,
stakeholders and visitors.
Teamwork
We celebrate our accomplishments and work
together by listening and communicating
effectively, building on each other’s strengths
and helping each other to grow professionally.
Corporate Citizenship
We value the communities in which we do
business and where we live. We are
committed to contributing by providing
leadership in economic development and
social responsibility.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
BUSINESS STRATEGIES
As part of HIAA’s Strategic Plan, a number of key business strategies have been developed to achieve
the vision and will help guide the organization over the next four years. The business strategies are
aligned with key strategic planning documents such as the Master Plan and the 10-year Capital and
Financial Plan.
Safety, Security &
Environmental Excellence
Professional Excellence
Optimize organizational
success through personal
development, recognition,
pride and best practices.
Emphasize our leadership role
in safety, security and
environmental excellence.
Facilities & Service
Improvements
Improve the infrastructure,
services and processes
to enhance the airport
experience.
Great people creating the
best airport community
in the world
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
Deliver passenger and
air cargo growth.
Non-Aeronautical
Revenue Growth
Culture of Superior Service
Strengthen our airport
Community culture of
superior service.
Air Service Growth
Accelerate revenue diversification
through commercial development
and other non-aeronautical
revenue growth.
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2014 BUSINESS PLAN
Prepared in December, 2013
C
2014 PLAN
ECONOMIC OUTLOOK
Global Economy 1
Although the global economy is expected to
strengthen in the near term, overall growth is still
weak; its underlying dynamics are changing and
downside risks to the forecast remain. As a result,
new policy challenges are arising. In particular,
markets are increasingly convinced that U.S.
monetary policy is reaching a turning point,
which could pose risks for emerging market
economies, where activity is slowing and asset
quality weakening. At the same time, a
fragmented financial system in the Euro area and
problematic high public debt in all major
advanced economies remain unresolved and
could trigger new crises.
The global economy is expected to strengthen
moderately in the near term driven by a stronger
U.S. economy, a substantial reduction in fiscal
tightening, and highly accommodative monetary
conditions. The growth rates for emerging
markets and developing economies (e.g. China,
India, and Brazil) are projected to remain
considerably above those of the advanced
economies but below the elevated levels seen in
recent years, for both cyclical and structural
reasons.
According to forecasts from the International
Monetary Fund (IMF), the world economy is
expected to grow at about 2.9% in 2013 and 3.6%
in 2014. Emerging and developing economies are
expected to continue to lead the recovery with
growth of 4.5% in 2013 and 5.1% by 2014,
compared to growth of 1.2% and 2.0%
respectively for the advanced economies. This
has implications for the air passenger and cargo
markets for HSIA in terms of the source of growth
and demand.
Uncertainties in the global economy, to the
extent they may exist, suggest that the business
environment for HIAA may be volatile over the
next several years should there be another global
downturn.
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
World
Canada
US
Euro
UK
Japan
Brazil
China
India
2012A
3.2%
1.7%
2.8%
-0.6%
0.2%
2.0%
0.9%
7.7%
3.2%
2013F
2.9%
1.6%
1.6%
-0.4%
1.4%
2.0%
2.5%
7.6%
3.8%
2014F
3.6%
2.2%
2.6%
1.0%
1.9%
1.2%
2.5%
7.3%
5.1%
According to forecasts
from the International
Monetary Fund (IMF),
the world economy is
expected to grow at
about 2.9% in 2013
and 3.6% in 2014.
Figure 1 – Global Economic Outlook Forecast - Annual Growth in Real GDP
1
International Monetary Fund, World Economic Outlook,
October 2013
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
National View
domestic product (GDP) growth of 1.6% in 2013
and 2.2% in 2014. 4
Canada is an export-oriented economy and
highly sensitive to developments in the global
economy. Although trade with emerging
economies such as China has increased in
recent years, the United States remains
Canada’s largest trading partner, accounting for
62% of trade (74% of exports and 50% of
imports) by value. 2 As such, developments in
that country will have an impact on the
Canadian economy. As an
export nation with a
wealth of natural
resources, Canada is also
susceptible to world
commodity prices.
Therefore any change in
the demand for natural
resources will have a
noticeable impact on the
Canadian economy.
The growth of Canada’s national economy has a
direct impact on the growth and demand for air
passenger and cargo services at HSIA, since a
significant portion of air passenger and cargo
traffic is domestic and directly impacted by the
health of the national economic environment.
Domestically, growth is
expected to pick up in
2014 as export recovery
and stronger business
investment offset a
slowdown in the housing
market and deceleration of
private consumption
growth. The recently signed CanadaDomestically, growth is expected to pick up
European Union Comprehensive
Economic and Trade Agreement
in 2014 as export recovery and stronger
(CETA) has the potential to boost
business investment offset a slowdown in
Canada’s income by $12 billion
3
annually and bilateral trade by 20%.
the housing market and deceleration of
The agreement has been signed in
private consumption growth.
principle and is expected to take two
years to finalize. Risks to consider include
increases in housing prices and consumer debt.
After posting growth of 1.7% in 2012, the IMF
expects the Canadian economy to record gross
2
Industry Canada, Trade Data Online Database
Summary of CETA Benefits, Prime Minister of Canada October 2013
3
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
4
International Monetary Fund, World Economic Outlook October 2013
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2014 BUSINESS PLAN
Prepared in December, 2013
Regional View
CETA is also expected to have a strong impact in
Atlantic Canada as almost 96% of European
Union tariff lines for fish and seafood products
will be duty-free once in effect. This will have a
positive impact on cargo exports from the
region. 8
Over the next several years, economic growth in
Halifax and Nova Scotia is expected to be driven
by mega projects that total over $115 billion
and include the federal shipbuilding contract,
the Deep Panuke natural gas development, and
the Lower Churchill hydroelectric development.
The national shipbuilding contract is expected
to generate 11,500 total jobs and $500 to $600
million in wages for Nova Scotia, along with a
2.4% rise in provincial GDP. 5
In 2014, Nova Scotia is poised to have the
strongest GDP growth in the Atlantic region, as
momentum in the province accelerates as
production at the Deep Panuke and other mega
projects across the province strengthen.
The regional growth is anticipated to have a
conservative but positive impact on 2014 and
improve as more of the mega projects gain
momentum.
Growth is also expected in sectors such as
finance and insurance, other business services,
healthcare, aerospace and port transportation,
among others. The regional economic growth is
expected to drive the demand for air services.
7.0%
5.5%
4.0%
2.5%
1.0%
-0.5%
-2.0%
-3.5%
-5.0%
NL
NB
PE
NS
2012A
-4.8%
-0.6%
1.2%
0.2%
2013F
6.0%
0.0%
1.1%
0.8%
2014F
0.6%
0.9%
1.3%
2.0%
Figure 2 - Atlantic Canada Economic Outlook Forecast - Annual Growth in Real GDP
This growth will come over time; the result in
the near term is that the provincial economy is
expected to post GDP growth of approximately
0.8% in 2013, but rise to 2.0% in 2014. 6 Halifax’s
real GDP was over $15 billion for the first time
in 2012, accounting for 54.6% of the total value
of goods and services produced in Nova Scotia. 7
The regional economic
growth is expected to drive
the demand for air services.
5
Shipsstarthere.ca
APEC Outlook – Fall 2013
7
Greater Halifax Partnership, The Halifax Index – May
2013
6
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
8
Summary of CETA Benefits, Prime Minister of Canada –
October 2013
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2014 BUSINESS PLAN
Prepared in December, 2013
improvements 10. The main Canadian airlines,
Air Canada and WestJet, are both expected to
post strong pre-tax operating incomes for
2013 11.
Aviation Industry
The global aviation industry has been faced with
a number of challenges over the last several
years that have impacted the demand for air
services and air passenger traffic; however, the
long-term trend has always been continued
growth as the industry rebounds. This is due to
globalization and the importance of air travel
for trade and commerce, along with the
increasing demand for tourism worldwide. The
long-term outlook for the aviation industry is
continued growth.
Another trend developing in the aviation
industry is the growing popularity of airline
incentives. Many airlines now require risksharing incentives from airports in order to
commit to a new air service. If used properly,
incentives can bridge the gap between the
airport’s confidence in its market and the
airline’s perceived risk. Incentives will
increasingly become an important part of the
business case for new air services. 12
A key trend which has continued to evolve over
the past several decades is the growth of
international air traffic relative to domestic air
traffic. In 1990, international air passengers
made up 24% of all global air passenger traffic
and this is forecasted to grow to 40% in 2016. 9
This trend is expected to continue due to
globalization and the increasing accessibility of
international travel as a result of economic
growth and new aircraft technology. This has
important implications for air services
development in terms of market opportunities
and new routes. Specifically, this suggests that
the demand and growth for international air
travel will continue to outpace the growth of
domestic travel.
Fuel is projected to account for approximately
31% and 30%10 of total airline operating costs in
2013 and 2014 respectively. As costs rise and
fluctuate, airlines may adjust seat capacity,
which in turn affects the airport business. An
increase in air services and seat capacity
supports the airport business by generating
revenue opportunities (e.g. landing fees) while
a decline in seat capacity has the opposite
effect.
Consideration must also be given to the new
and changing types of aircraft and related
market opportunities. The new aircraft can
offer lower costs, smaller capacities and longer
ranges that could be beneficial to smaller
markets and also create more non-stop routes.
The airline industry is expected to post $11.7
billion in profits for 2013, a slight decline over
previous forecasts, reflecting a spike in oil prices
due to the Syrian crisis and disappointing
growth in several key emerging markets.
Airlines are expected to see a significant boost
in 2014 with profits of $16.4 billion due to rising
business and consumer confidence levels.
However, the financial performance of airlines
varies considerably by region, country and
individual air carrier. Contrary to recent trends,
North America is expected to be particularly
strong in 2014 ($6.3 billion profit) as the
economy improves and with airline seat
capacity discipline by airlines driving yield
9
Improvement in the financial performance of
the global aviation industry will facilitate air
services development, and regional and air
carrier differences must be taken into account
when assessing potential opportunities. In 2012
and 2013, the impact of the seat capacity
discipline driving yield improvements for
airlines was evident in declining passenger
numbers and seat capacity reductions at several
Canadian airports, including HSIA.
10
International Air Transport Association, Revised 2013
Outlook – September 2013
11
CIBC 2013 Transportation Outlook – January 2013
12
InterVISTAS Consulting Inc. – September 2013
International Air Transport Association (IATA)
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
mobility. There is increasing demand to move
people to specific job sites across Canada,
including Alberta and Labrador, to support the
booming oil, mining and energy sectors. Within
the past twelve months, aircraft movements
specifically for workforce mobility have
increased by over 130% as compared to the
prior year. With the development of the mega
projects in Atlantic Canada, including Halifax,
these movements and passengers are expected
to continue to grow.
Halifax Stanfield International
Airport
Passengers
HSIA is served by 16 scheduled and charter
passenger air carriers that provide services to a
network of 42 destinations, including 16 in
Canada, 12 in the United States and 14 in
international markets including Europe and the
Caribbean.
In 2012, air passenger traffic at HSIA reached a
record of over 3.6 million enplaned/deplaned
(E/D) passengers; however due to seat capacity
constraints by the airlines, E/D passengers are
forecasted to decrease by 1.4% in 2013.
An increase in passenger
traffic for 2014 of 1.1% is
budgeted, as airlines begin to
slowly add back seat capacity
to the market.
Approximately 80% of passenger traffic at HSIA
is domestic, followed by 11% transborder and
9% international. An increase in passenger
traffic for 2014 of 1.1% is budgeted, as airlines
begin to slowly add back seat capacity to the
market.
A growing segment of the aircraft movements
and passengers at HSIA is related to workforce
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2008
2009
2010
Domestic
Figure 3 - Overview HSIA Passenger Traffic
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
2011
Transborder
2012
2013*
2014*
International
* Denotes forecasted passenger traffic.
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2014 BUSINESS PLAN
Prepared in December, 2013
Figure 4 – HSIA’s Current Non-Stop Destinations
Major air exports via HSIA include seafood,
electric parts and machinery, and industrial
equipment. The completed runway extension to
10,500 feet is expected to facilitate further
growth of air cargo business at HSIA by allowing
service from larger freighters.
Cargo
Air cargo at HSIA includes both mail and
commercial shipments carried in the belly-hold
of passenger aircraft and in all-cargo freighters.
Cargo service providers at the airport include
Air Canada, Air St. Pierre, Air Transat, Cargojet,
Condor Flugdienst, Icelandair, Purolator, FedEx,
UPS, Skylink Express and WestJet.
HIAA’s outlook, as detailed in the 2013-2017
Strategic Plan, suggests a compound annual
growth rate of approximately 6% for cargo
traffic at HSIA from 2013 to 2017.
Cargo traffic at HSIA reached 29,570 metric
tonnes in 2012 and is forecasted to be up
slightly, at approximately 30,000 metric tonnes
in 2013. The estimated tonnage for 2014 is
budget at 33,000 metric tonnes.
40,000
Actual
35,000
Forecast
Metric Tonnes
30,000
25,000
20,000
15,000
10,000
5,000
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Figure 5 – HSIA Air Cargo Traffic
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
2014 GOALS
The following goals were established in the 2013-2017 Strategic Plan and flow from the key business
strategies.
Safety, Security & Environmental Excellence
Exercise high levels of safe work practices throughout
HIAA and foster work safety in the HSIA community.
Continue to enhance the highest level of airport security.
Enhance standards of environmental stewardship and
increase awareness in the HSIA community.
Professional Excellence
Implement revised recruitment and retention strategies.
Build organizational capability and capacity.
Improve current succession and workforce planning
processes.
Sustain positive labour relations.
Improve delivery of Human Resource services.
Air Service Growth
Increase passenger and cargo volumes.
Increase passenger and cargo destinations.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
2014 GOALS (cont’d)
Non-Aeronautical Revenue Growth
Develop and begin implementing a commercial
development plan to facilitate the growth of an Airport
City at HSIA.
Influence key government stakeholders to provide zoning,
regulation and adequate services to support airport
operations and growth.
Increase other non-aeronautical revenue.
Generate revenue growth through the provision of
services to external parties.
Culture of Superior Service
Improve customer satisfaction levels.
Integrate The Stanfield Way into existing HSIA programs.
Expand and diversify Tartan Team volunteer host
program.
Implement processes and adapt facilities to minimize
barriers within our facility resulting in a seamless airport
experience.
Facilities & Service Improvements
Deliver a capital program that optimizes the airport
experience, supports growth, and improves efficiency and
productivity.
Improve the processes and systems used to manage
infrastructure data and to support delivery of
infrastructure initiatives and ongoing operations.
Deliver enterprise business solutions by leveraging airport
technology.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
Prepared in December, 2013
FINANCIAL PLAN
This section provides supporting data on the 2014 Business Plan’s revenue and expense budget. It
addresses the way in which the financial component of the plan links to the goals, allowing HIAA to
achieve its stated objectives.
The financial plan for HIAA is summarized as follows:
2014
Budget
($ millions)
Operations
Revenues
Expenses
Operating Margin
Other Revenue and Expenses
Airport Improvement Fee (net)
Interest Expense (net)
Depreciation and Amortization
55.7
51.2
2013
Forecast
($ millions)
53.0
49.1
4.5
33.9
14.3
19.6
-
3.9
33.6
14.1
17.7
1.8
Excess Revenue Over Expenses
4.5
5.7
Capital Program Expenditures
44.5
44.8
283.5
283.5
Total Long-Term Debt as at Dec. 31
Figure 6 – Financial Plan Summary
Revenue
total HSIA passenger traffic for 2014 is
budgeted to increase from the 2013 forecasted
levels by 1.1%. This includes an increase of 0.3%
in total passenger aircraft movements from the
2013 levels. Although aircraft movements are
expected to remain relatively flat, aircraft seats
are forecasted to increase by 1.4% in 2014 as
airlines shift to larger size aircraft for certain
routes. To provide context, this represents an
increase in passenger seat capacity of
approximately 90 seats per day and is
equivalent to the arrival and departure of one
large regional jet per day. In 2014, through a
combination of increases in seating capacity,
increases in aircraft movements, increases in
specific aeronautical fees and the addition of
During 2013, HIAA continued to experience a
reduction in airline seat capacity that impacted
operating revenue. Through the
implementation of the annual plan, HIAA’s
operating revenue budget in 2014 is $55.7
million. This represents an increase of 5.0% over
the 2013 forecasted revenue of $53.0 million.
Airport Improvement Fee (AIF) revenue is
budgeted to be $33.9 million. Interest revenue
of $300,000 is budgeted from the investment of
surplus funds based on HIAA’s investment
guidelines and Master Trust Indenture.
When considering published airline schedules,
Transport Canada aviation forecasts and other
related information available as of October
2013 when budget assumptions were prepared,
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
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Capital Program
two new fees, aeronautical revenue is budgeted
to be 5.9% greater than the 2013 forecast.
The estimated 2014 capital program investment
is $44.5 million and will result in the completion
of a number of significant capital projects that
are currently in progress, including the
development of new leasable area in the Air
Terminal Building (ATB) and the planned
construction of a new groundside road
circulation network.
Non-aeronautical revenue is budgeted to
increase by 4.0% in 2014 over the 2013
forecast. The more significant non-aeronautical
revenue generators are parking, concession and
rental revenues. The most significant driver of
the budget increases relates to parking due to
rate increases in 2014.
Groundside
2014 Total Revenues = $89.9M
Groundside Road Circulation
Improvements
Aeronautical
32.7%
$29.4M
AIF
37.7%
$33.9M
The groundside road network is planned to be
redeveloped from the existing two-way road
system with multiple intersections into a new
one-way loop road system with multiple lanes
to serve free flowing traffic to and from the
ATB. The new system will provide increased
capacity for growing traffic demand, eliminate
signalized intersections and crossover turning
movements, provide more efficient access to
Non Aeronautical
29.6%
$26.6M
Other
3.9%
$3.5M
Concessions
11.9%
$10.7M
Parking
13.8%
$12.4M
Expenses
Total expenses for 2014 are budgeted to be
$85.3 million. Operating expenses are budgeted
to be $51.2 million, which represents an
increase of 4.3% or $2.1 million over the 2013
forecasted operating expense.
Total interest to be paid in 2014 on HIAA’s
Series A and Series C bonds at an annual
interest rate of 5.503% and 4.888% respectively
is $14.9 million.
2014 Total Expenses = $85.3M
Materials, Supplies
& Services
21.2%
$18.1M
Interest
17.1%
$14.6M
General &
Administration
5.6%
$4.7M
Ground Lease Rent
7.0%
$6.0M
groundside facilities, simplify signage and way
finding, and improve road surface conditions.
Realty Taxes
1.7%
$1.5M
Depreciation
22.9%
$19.5M
Commercial Development
Work will continue to further advance the
Commercial Development plan for the purpose
of enhancing non-aeronautical revenue.
Salaries & Benefits
24.5%
$20.9M
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
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2014 BUSINESS PLAN
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Air Terminal Building (ATB)
Airside
Check-In and Passenger Processing
Improvements
The emergency response vehicle replacement
program will conclude in 2014 with the delivery
of the rapid intervention vehicle to supplement
the two new crash trucks and the new pumper
truck, which were delivered in 2013. These
vehicles replace aging vehicles in the fleet of
firefighting equipment while enhancing the
capability and flexibility of HIAA’s emergency
response service.
The significant redevelopment of the baggage
handling and passengers processing systems in
the ATB, which began in 2013, will be
completed in 2014. Following the
implementation of the new domestic/
international baggage handling system, the new
transborder system will go into operation in the
first half of 2014. New self-serve baggage drop
devices will be deployed in the newly renovated
and expanded domestic/ international check-in
hall. The transborder check-in hall will be
renovated to provide additional check-in
counters and to expedite passenger processing.
Information Technology
The enterprise systems upgrade program will be
completed in 2014 with continued investments
in the service and asset management system to
expand its functionality and capability, as well
as extensive replacements of common use
terminal equipment which has reached the end
of its useful operating life, and with the
implementation of a business intelligence and
corporate reporting platform.
Hold Room Concessions Development
To enable further development of nonaeronautical revenue, the domestic/
international hold room is planned to be
expanded to create a significant area of new,
leasable space for retail or food and beverage
concession operators. A first floor roof area
adjacent to the existing second floor hold room
is planned to be enclosed and finished as new
second floor space.
Minor/Maintenance Capital Projects
The balance of the capital funding requirements
for 2014 consists of minor capital projects
categorized as new initiatives, minor works,
capital acquisitions, mobile equipment
replacement, preliminary design for the 2015
capital program and 2013 carryover projects.
ATB Airside Tenant Space
Leasable airside space is planned to be
developed on the ground floor of the ATB to
address airline demand for operational and
maintenance space.
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
- 15 -
2014 BUSINESS PLAN
Prepared in December, 2013
FINANCIAL SCHEDULES
Halifax International Airport Authority
PROFORMA BALANCE SHEET
as at December 31
($000’s)
2014
BUDGET
ASSETS
2013
FORECAST
Current Assets
Cash and Short Term Investments
Accounts Receivable
Other
15,876
4,950
1,764
45,851
4,800
1,696
Total Current Assets
22,590
52,347
Long-Term Assets
Capital Assets
Debt Service Reserve Fund
Accrued Pension Asset
379,443
7,427
-
354,505
7,427
6,581
Total Long-Term Assets
386,870
368,513
TOTAL ASSETS
409,460
420,860
23,338
2,092
827
81
26,338
31,320
902
81
32,303
LIABILITIES and EQUITY
Current Liabilities
Accounts Payable & Accrued Liabilities
Accrued Pension Liability
Deferred Revenue
Current Portion of Long Term Debt
Total Current Liabilities
Long-Term Liabilities
Long-Term Debt
Due to Transport Canada
Less: Current Portion
Total Long-Term Liabilities
283,371
81
(81)
283,349
161
(81)
283,371
283,429
TOTAL LIABILITIES
309,709
315,732
99,751
105,128
409,460
420,860
EQUITY IN CAPITAL ASSETS
TOTAL LIABILITIES and EQUITY
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
- 16 -
2014 BUSINESS PLAN
Prepared in December, 2013
FINANCIAL SCHEDULES
Halifax International Airport Authority
PROFORMA STATEMENT OF OPERATIONS
for the year ended December 31
($000’s)
2014
2013
BUDGET
FORECAST
REVENUES
Aeronautical
Parking
Concessions
Other
Investment Revenue
Airport Improvement Fee
29,358
12,415
10,678
3,219
300
33,890
27,722
11,612
10,536
3,145
700
33,571
TOTAL REVENUES
89,860
87,286
EXPENSES
Salaries, Wages & Benefits
Depreciation and Amortization
Materials, Supplies & Services
Interest Expense
Ground Lease Rent
General and Administrative
Realty Taxes
20,880
19,562
18,097
14,575
6,001
4,743
1,486
19,829
17,671
17,555
14,861
5,795
4,452
1,468
TOTAL EXPENSES
85,344
81,631
4,516
5,655
105,128
99,393
EXCESS REVENUES OVER EXPENSES
NET ASSETS (Jan 1)
Adjustment for the cumulative effect on prior
years of applying the new method of accounting
for employee future benefits
Amortization of Deferred Financing Charges
NET ASSETS (Dec 31)
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
- 17 -
(9,973)
-
80
80
99,751
105,128
2014 BUSINESS PLAN
Prepared in December, 2013
FINANCIAL SCHEDULES
Halifax International Airport Authority
PROFORMA STATEMENT OF CASH FLOWS
for the year ended December 31
($000’s)
2014
BUDGET
2013
FORECAST
CASH BALANCE JANUARY 1
45,851
59,812
OPERATING ACTIVITIES
Excess Revenues over Expenses excluding Non-Cash Items
Adjustment for Changes in Working Capital
22,880
(8,274)
22,153
9,486
Total Operating Activities
14,606
31,639
FINANCING ACTIVITIES
Transport Canada Rent Deferral
Deferred Contribution from the Province of Nova Scotia
(81)
-
(81)
(719)
Total Financing Activities
(81)
(800)
INVESTING ACTIVITIES
Expenditures on Capital Assets
(44,500)
(44,800)
Total Investing Activities
(44,500)
(44,800)
Increase (Decrease) in Cash & Cash Equivalents
(29,975)
(13,961)
CASH & CASH EQUIVALENTS AS AT DECEMBER 31
15,876
45,851
HALIFAX INTERNATIONAL AIRPORT AUTHORITY
- 18 -
2014 BUSINESS PLAN
Prepared in December, 2013
Halifax International Airport Authority
1 Bell Boulevard,
Enfield, Nova Scotia, Canada
B2T 1K2
Tel: 902.873.4422
Fax: 902.873.4750
www.flyhalifax.com