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Float-plane operators still at loggerheads with new terminal

Harbour Air float plane comes in for landing into Vancouver Harbour May 16, 2011.

John Lehmann/The Globe and Mail/John Lehmann/The Globe and Mail

With their ability to touch down nearly anywhere there's water, float planes have long been the taxis of the hinterland.

In British Columbia, the aircraft are also an increasingly popular option for commuters. Politicos flying back and forth between Victoria and the mainland account for much of the traffic, but seaplanes also cater to small business owners, contractors and tourists, with 350,000 to 400,000 passengers flying in and out of Vancouver Harbour every year.

Evidence of that shift, and the millions of dollars in business it represents, can be seen floating on Vancouver Harbour, where workers are putting the finishing touches on a new float-plane terminal scheduled to open May 25 to replace a temporary facility a few minutes' walk to the west.

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The high stakes are also evident in a bitter standoff between the developers of the new terminal and prospective tenants, including Vancouver-based Harbour Air, the biggest float-plane operator in the province and the company that operates the existing facility. In January, float-plane operators publicly balked over what they called a passenger levy of $12 per flight in and out of the harbour via the new facility.

Based on the rent Harbour Air pays for its current space, the cost per trip works out to about $2, says Harbour Air CEO Greg McDougall. At Seair's Richmond float-plane base, companies pay about $3 per trip.

Vancouver Harbour Flight Centre, the developer of the new terminal, says the cost is not a passenger levy but rent - and that it reflects the price of building to the latest safety and performance standards. As the clock ticks down to the opening, the two sides remain at loggerheads, even though VHFC has reduced the charges enough to attract two float-plane operators, which signed on to use the new terminal at $9.50 per trip. The other operators insist that is still too high.

The province is taking heat from tourism interests worried about potentially higher ticket costs. The city, meanwhile, is under pressure to keep its promise to Coal Harbour residents to close a "temporary" float-plane facility that's been in place since 2004.

Stick-handling the file for the province is Minister of Jobs, Tourism and Innovation Pat Bell, who on Friday said he was hopeful a solution could be found.

Float planes are "significant both from a transportation perspective and from a tourism perspective," Mr. Bell said. "It's something that is important to not just residents of B.C. but to the tourism industry - to make sure we are able to move people around efficiently."

Float planes have been zipping in and out of Vancouver Harbour for decades, but the current impasse dates back to 2004, when Harbour Air was bumped from its site at the foot of Burrard Street to make room for the Convention Centre expansion.

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The dislocation was supposed to last only a few years, until a new facility was built, but construction on the new terminal didn't start until last year.

The current situation includes questions about how the deal was put out to bid and awarded. VHFC says it won the project in a transparent process and has made changes and concessions in an attempt to please Harbour Air. But Greg McDougall, president of Harbour Air, says his company was shut out because float-plane operators were told that the winner would have to provide retail and commercial space - something his company had no expertise in - and were stunned when the float-plane portion later became a separate lease. In the legislature this month, Mr. Bell said he would consider reviewing the procurement process.

Mr. McDougall has also fiercely objected to a private developer holding what he calls a monopoly on float-plane traffic.

VHFC chairman Graham Clarke - who was the chair of the Vancouver Airport Authority for 13 years before stepping down in 2010 - says private consortiums worldwide are taking on the complex, expensive tasks of running airports. One of the leaders in the field is Vancouver Airport Services Ltd., a Vancouver Airport Authority subsidiary that runs airports in Canada, the United Kingdom and Jamaica. Float-plane bases are typically small and run as non-profits.

When the new terminal is up and running, Harbour Air will likely face pressure from the city to pull up stakes. The company's agreement with the city allows it to stay on its current site until 2012 or when a new terminal is complete, whichever comes first.

The city has not given the company notice but has asked for a decommissioning plan, said David McLellan, general manager of community services with the City of Vancouver.

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Council has been clear that once the new terminal is open, it would not support an extension for Harbour Air on the current site, he said.

Mr. McDougall, who over the past two decades has built his company from a handful of aircraft to the world's biggest float-plane-only operation, insists that operators should be given a green light to build a non-profit terminal at a different location.

Others aren't counting on that possibility. At the new terminal last week, Seair president Peter Clarke said his Richmond-based company has long wanted to expand its downtown presence.

Under the terms of its deal with VHFC, Seair will not pay rent for a few months, an incentive Mr. Clarke likened to those commonly offered by commercial real-estate landlords. And he said the $9.50 per passenger rate is reasonable for the services the new terminal will provide.

"We've always wanted to be here and we have always said we are going to be there when it opens," Mr. Clarke said.

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