March 2006.....Top Stories

Flight Path - Reg Milley and Co. on fast track

The Eagle Soars - Air Mikisew lands Business of the Year Award

Off the Ground - Edmonton’s City Centre Airport

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Flight Path

Reg Milley and Co. on fast track

By Les Brost

People have love-hate relationships with airports. That’s not surprising… airports are contradictory places. An airport can have the sweet syncopation of a grooving jazz trio, or it can give a whole new meaning to the word ‘chaos’—all on the same day. The weak and the mighty, the old and the young—all on their own journeys, linked through the complex organism that is an airport.

Like any other organism, an airport evolves to meet the demands placed upon it. Edmonton International Airport is on a dynamic path of change. In many ways, its growth—and its growing pains—mirror the challenges faced by our province as it adapts to a new role as one of Canada’s main economic engines.

Greater Edmonton needs to be prepared for the opportunities and challenges that come with rapid growth. The potential is huge—if Edmonton can collaborate and partner with northern communities whose resources drive that expansion.

Edmonton International Airport is at the hub of much of that growth. It directly employs 180 people who are among the 3500—the population of Fairview—working for the various airport partners and businesses. In one capacity or another, most cater to the needs of roughly 4.5 million travelers who pass through the security gates annually. Others handle and manage 200,000 tons of cargo every year. The airport generates 8200 person-years of employment annually, and contributes $1.4 billion to Alberta’s economy. Canada’s fifth largest airport racked up an estimated $85+ millions in revenue in 2005, and embarked on a 10-year, $89.5 million capital development program. 

So what about the future? The inevitable push to develop our massive northern resources will drive exponential economic growth, creating even greater challenges for the International and its satellite airports—City Centre, Villeneuve and Cooking Lake.

There will be unprecedented increases in commercial and charter air services to transport people and goods to Fort McMurray, Grande Prairie and beyond to other development magnets.

Will this guarantee dramatic growth for Edmonton International? Consider the aggressive promotion by Calgary and proposed expansion plans by Red Deer for initiatives designed to capitalize on opportunities in the north. What are the implications of the launch of the “Newfie Express”—Air Canada’s recently announced Fort McMurray-Toronto-St. John’s service—for the Inernational?

Maximizing the opportunities for growth will require effective leadership—and that makes the leadership team very important. Yet most Edmontonians know very little about the people charged with managing and shaping the future of Edmonton Airports. Who are they? What are their priorities? How will they work with other stake-holders—particularly municipalities like Wood Buffalo, Grande Prairie and Peace River?

Edmonton Airports President and CEO Reg Milley is a sports fan, and he uses a sports analogy to describe the nature of airports. “Airports nationally are like members of a relay team. Members of the team have to be able to run very, very fast on their own. Yet they are completely dependent upon each other for overall success. If one member of the team falls, or if the baton is dropped during the hand-off, the team is in trouble. Like relay team members, each airport is independent of other airports.”

He also uses the relay race analogy to describe the operations of individual airports. If one member of the airport team—anyone from ticketing agents and baggage handlers to the folks who sell coffee—struggles in his assignment, it impacts the entire team. There is a collective need to adapt to changes outside individual control.

What kind of person takes on the challenge of leading such an interdependent team and complex business? Milley says he loves to communicate, and thrives on challenges and opportunities. His management style leans toward inclusion and collaboration, and he likes to keep an “open door and an open mind.”

He has had one constant passion in a business career that has taken him across Canada, working in the energy and air transport industries. “What really drives me is to take something that others say can’t be done and do it. I love working with others to achieve common success. My job is not to knock down doors, it is to give others the keys.”

He is candid about the challenges of operating a major airport. Running a business is not always about being a warm and cuddly person. There comes a time when tough decisions have to be made, and tough action taken. How does Milley approach the tough calls? He sees himself as a manager who doesn’t rush to decision and who communicates the rationale for his decision. “When I make the tough call, you may not like the decision I make, but I will always explain what I do in terms of the strategic thinking and long-term forces behind it.”

After 14 months at his post, Milley has put together his executive and senior management group. “I rely on my team and need my team more than they need me, because I don’t have all the answers.” Who are they and what do they do?

Running the operations side of a major international airport—and its satellites—is a demanding job, definitely not suited for the feint of heart. Milley says vice-president of operations and services Diane Trenn is up for the task. “She has a huge focus on customer service.” Trenn has a 23-year history with the operation.

Successful marketing in the highly competitive airport industry depends upon a solid knowledge of the industry players. Vice-president of marketing Peter McCart, on board since December 2005, is a former Air Canada executive. “Peter is able to bring the perspective of the airline industry to the decision-making table, and that is incredibly important” acknowledges Milley.

The bean-counting side of the the ledger is no small feat, either. Ralph Peterson, vice-president of finance, chief financial officer and corporate secretary, leads the development of the five-year strategic plan and annual business plans. Having joined Edmonton Airports in January 2003, he has spent his professional career in audit and finance. “Ralph is a solid financial watchdog. He knows finances… he knows balance sheets… and he asks the right questions.”

Peter Martyniuk is director of infrastructure, a position he has held since August 2004. Planning and developing infrastructure at airports becomes even more challenging during periods of rapid growth. Edmonton International will hit traffic growth targets well ahead of schedule, and will be challenged to meet the capacity expectations of its customers.

The team sees their people as their competitive advan-tage. Managing the “people file” is human resources director Garth Heizdzen. Appointed in November 2005, he has a background in psychology and human relations practice. And, since the summer of 1997, communication director Traci Bednard has become the familiar face, answering to the media. “Traci is the most strategic-thinking communication person I have ever known,” says Milley.

Have these players gelled into a team? The CEO thinks the answer is yes. “We have grown from being a group of individuals into a team that is capitalizing on the individual strengths that we bring to the table. The team is now solely focused on where we need to go in order to succeed.”

Regarding Air Canada’s Newfie Express, Milley says “I think it’s fantastic. It makes good business sense, and will generate more traffic at Edmonton International.” Air Canada has already announced extra daily flights from Edmonton to Fort McMurray and Grande Prairie. Edmonton Airports is also actively seeking directs flights to China—a good move should Canadian Natural Resources decide to use Chinese labourers to build its tank terminals at its $10.8-billion oilsands project.

The board of directors of the Edmonton Regional Airports Authority has identified revenue diversification as a priority. Since the International has more land than any other Canadian airport with scheduled air service, there is a strategic need to develop new and complemen-tary land uses for revenue generation.

Where is this airport headed? Milley and his team have picked their destination of choice. “We want to be a customer focused, dynamic airport that positions this region in the best possible light. Our airport will be a business that talks to customers and exceeds their expectations.”

A good idea for Edmonton. For Milley, one important message that came from his first year sitting in the president’s seat. “I didn’t fully understand the amount of emotion that was generated by the City Center Airport issue. A year ago, there were days when the issue took up 85 percent of my time. On bad days, it took up 95 percent. It was evidence of the importance of listening to people and working with them.”

Ownership of the City Center property was a factor in the downtown airport controversy. The City of Edmonton owns the approximately 500 acres on which the airport is located and has the final say in property use. The Airports Authority has been granted a 50-year lease to operate the property as an airport.

Because Edmonton is Alberta’s capital, ramifications of the Authority’s decision to limit the usage of City Centre were felt across the province. Northern and southern Albertans doing business with government, in particular, need to travel to Edmonton. The easy access to down-town from the City Center Airport resulted in significant cost, time and stress savings. Local businesses that had emerged and grown to fill the needs of the airport customers also raised concerns about the changes.

Inevitably, the move to change the status of City Centre ran into fierce resistance, sparking a political fight. MLAs and municipal leaders from the Regional Municipality of Wood Buffalo in the north to the County of Lethbridge in the south, and Chambers of Commerce were involved in the debate—on all sides of the issue.

The legislated accountability and governance structure for regional airports—not readily transparent to outsiders—added to the complexity. The board of the Edmonton Regional Airports Authority comprises 15 members: Six are appointed by the City of Edmon-ton, two each by the federal government and the board itself, and one each by Leduc, Sturgeon, Strathcona and Parkland counties and the City of Leduc. There will soon be provincial representation on the board, reflecting the government’s interest in airports as economic facilitators.

Although these members are appointed by the various jurisdictions, their fiduciary responsibility is to the Authority. It is noteworthy that there is no barrier to the federal and provincial governments making board appointments representative of northern interests. As part of its accountability architecture, the board holds two public meetings twice yearly and consults with a business advisory group, composed of 20 local business leaders.

Given this level of consultation, why would Edmonton Airports take such a contentious decision? As part of planning for future growth, the board of the Authority had identified key priority needs: to grow and strengthen relationships with stakeholders; to address issues pertaining to capacity, human and financial management issues; and to address challenges inherent in controlling a growing business and to refine Edmonton International Airport’s brand.

These were some of the strategic considerations that drove the decision to change the status of City Center Airport. While resistance to limiting scheduled air services at City Centre has not disappeared, Milley sees a slow healing of the scars of the dispute. He believes that a strategy of communication and building win-win relationships is taking root. This fall, as part of that strategy, Edmonton Airports will host the first annual regional air service development workshop. It will bring together smaller communities and air service providers to find innovative ways to enhance service to those communities.

The Edmonton Airports team dreams big dreams. Can big dreams come true? Is it in our interests to resolve today’s challenges in ways that position the community to seize long-term opportunities?

If we want to see the city continue to grow and prosper, we have an interest in building a cohesive, efficient air service network. If we want to position our city as the focal point of the emerging powerhouse that will be tomorrow’s Canada, we have an interest. Reg Milley and his team appear to share these aspirations. Their success will be our success.

The Eagle Soars

Air Mikisew lands Business of the Year Award

by Murray Donaldson

In the Cree language, the word mikisew means eagle.

Eagles fly proud, say the elders. And so it seems fitting that a small airline bearing the Cree name of the eagle could reverse its fortunes and go from near collapse to winning Business of the Year in Alberta’s hottest economic region.

In November 2005, Air Mikisew was awarded the title by the Fort McMurray Chamber of Commerce.

“That, in 11 short months, from near death to being the community’s business of the year is a very exciting accomplish-ment,” says Dale Monaghan, marketing and communications manager for Air Mikisew. The airline has been flying the route between Fort Chipewyan, Fort McMurray and Edmonton for about a decade.

Access in and out of Fort Chipewyan by air is virtually a necessity—this year more so than others. For most of the year there are no roads into Alberta’s oldest continuously settled community, located 286 km further away from Edmonton than Fort McMurray, and home to around 1,200 people. Only when the weather is cold enough in mid-winter can hardy, four-wheel drive vehicles traverse a unique ice road into Fort Chip. The warm winter this year delayed freezing, so the scheduled air service that brings people and cargo in and out has been more heavily relied upon.

When the airline that provides the service—one that is owned and operated by the Mikisew First Nation—teetered on the verge of collapse, a determined group of people approached the problem with passion, seeking consensus and finding the best solution for everyone involved.

Monaghan was a key player in keeping Air Mikisew alive and well. His drive came not just out of professionalism, but from a love of the north he has deve-loped during 15 years of working in the region. Born and raised in Edmonton, and a graduate of the University of Alberta, he went north to Slave Lake where he spent 12 years in municipal management, focusing on business, economic and tourism development. Showcasing the beauty of the lake took hold of him.

When he became the northern marketing manager for Travel Alberta, he saw a need to connect the commun-ities. Instead of every community marketing itself, Mohaghan built Team Alberta North to promote the area to international circles, successfully creating what he calls the tourism “powerhouse of the north.” That led to formation of the Northern Alberta Tourism Alliance in 2000 that marketed Edmonton as the gateway to the north, Jasper as the playground, and northern Alberta as a cultural mosaic of lakes and rivers. A year later, he project managed the 2001 Meet the North conference and exposition.

Based on his knowledge of the north and the relationships he had built over the years, Aboriginal Affairs Minister Pearl Calahasen, MLA for Lesser Slave Lake, parachuted Monaghan in as her executive assistant. Subsequently, Calahasen encouraged him to seek other opportunities. “She said, ‘You really understand what it means to forge relationships on social, cultural and business levels between the aboriginal community and the mainstream community,” recalls the 38-year old.

With that in mind, Monaghan’s thoughts turned to Fort Chipewyan for which he had developed a soft spot when he assisted the Discovery Channel in filming a piece on Wood Buffalo National Park. He made a call to Archie Waquan, then chief of the Mikisew Cree First Nation, and expressed an interest in serving on his team in some capacity. Soon, Monaghan was on board and, in early 2004, progress was being made on what was blossoming into an exciting Fort Chipewyan and Mikisew tourism strategy.

They had come a long way from the days when the community was overly reliant on southern-based, profit-oriented airlines. If fly volumes were not high enough, they would leave and the community would have to plead for another carrier to come into Fort Chipewyan. So, in the early 1990s, the Mikisew First Nation bought Contact Air. “Mikisew said, ‘We are never again going to be at the mercy of anyone to ensure our community is connected to the world for health, for social, for business and for everything else,’” explains Monaghan.

By the turn of the century, Air Mikisew was in growth mode and things were looking up. It was further encouraged by the Authority’s efforts to attract 19-seater planes to the facility and scheduled airlines of small capacity to operate out of City Centre.

But, within three years, the eagle’s wings were in a flap.

First, the Edmonton Regional Airports Authority announced a ban on 19-seat airplanes from City Centre Airport and, shortly after, on scheduled service flights.

This was a frustrating and potentially devastating decision for Air Mikisew: Half of its flight activity was between Edmonton and Fort McMurray, half between Fort McMurray and Fort Chipewyan.

“If half the operation were to disap-pear, the entire airline would have closed its doors,” Monaghan points out. “If your operation is in northeastern Alberta—Fort McMurray specifically—where do you go but north and south. There’s nothing east and west.”

With no other flight options and no real opportunity to sell the airline and move into another business sector, the Mikisew First Nation realized its only option was to keep the airline flying. At one meeting, the elders stressed how vital it was to the community that the airline survive.

“The council said, ‘We cannot fail.’ And we had to ensure success in convincing Edmonton that our airplanes —running 10 people out and 10 people in, three times a day—are in no way a threat to the viability of the International Airport.

“Most of the businesses, including the one I represent, have huge interests in international travel. We own Miki-sew Sport Fishing, Alberta’s largest fly-in fishing company. I would say 80 percent of our clients come from the international market. They all come in via the International Airport. About $600,000 of flying a year comes from our floatplanes. Well, if we don’t have an effective way to get the international people into our operation, we would lose $600,000 and all the benefits of running the sport fishing company.

“We’ve always said that we’re not against the International Airport. All we are trying to do is present the opportunity of a dual airport strategy because we have interests in both airports.”

So it was a matter of survival for the airline. But what Monaghan stresses as more important—what Air Mikisew wanted—was for all sides to work together to create an economic union between Edmonton and the north that would benefit both regions.

It grew into a northern Alberta-wide lobby effort. With no real marketing budget to speak of, sending letters was the best they could do to try and convince Edmonton Airports leadership that they were not trying to determine the fate of the city and its airports, but to become and effective complement to the International Airport.

Just before Christmas in 2004, Air Mikisew announced it would defy the ban, continue to fly into Edmonton. “We were willing to face the conse-quences for what we believed in,” Monaghan recalls. As a result of the defiance, the ban was lifted and a short-term solution was worked out.

“That happened to coincide with the arrival of Reg Milley [as president of Edmonton Airports], who I believe is an astonishing, visionary fellow that sees the bigger picture, and very open-minded to talking through differences to find mutual opportunities.”

Monaghan appreciates that Milley seems to understand what ‘win-win situation’ means, and hopes his record of working to provide satisfactory results to stakeholders will ensure success for everyone.

Air travel is a lifeline for the Albertans of Fort Chipewyan; it was their passion that convinced the Authority to think about the City Centre Airport within a dual airport strategy.

Monaghan feels that the information gathered back in 1995 that supported closing the municipal airport may be old news in terms of how relative it is today.

“If you look at factors, such as in 1995, there were $500 million dollars of announced economic development in northern Alberta. Today it ranges be-tween $50 and $80 billion. The economic factors in terms of the importance for connectivity between Edmonton and northern Alberta, primarily Fort McMurray, are suggesting that you’d be irresponsible not to look at how important it is to connect on all levels—ground, tire and in the air—the prosperity of Wood Buffalo and the ability for Edmonton to be more than just a jingle of Gateway to the North but actually be the gateway and the supplier to the north.”

With that in mind, Monaghan sees the Business of the Year Award as a testimony to the leadership and unfaltering support of the Mikisew.

“I think a big success of Business of the Year is the vision of the Mikisew being an entrepreneurial First Nation, not wanting any special treatment but wanting the ability to work with partners on mutual successes. That’s the guiding light of Mikisew.”

Monaghan still gets choked up with pride when he talks about three aspects of the nomination that led to winning the award: the proud name of the Mikisew was always honoured; keeping the airline alive was very much about providing a vital service to a com-munity; and Air Mikisew staff integrates and connects people from three communities.

And so for the future, Air Mikisew is looking to build on its success thus far, and support Edmonton’s interests in being the gateway to the north.

Off the Ground - by Murray Donaldson

For a number of years now, a group of stakeholders with an interest in keeping Edmonton’s City Centre Airport healthy and vital has been busy working to defend Alberta’s commuter air service.

They believe that the airport is vital to more than Edmonton, but the northern regions of the province and, indeed, Alberta as a whole. With increasing interest in their efforts, the stakeholders decided to formally establish their group and a little more than a year ago CAANA—the Commuter Air Access Network of Alberta—was born.

The 60-plus members recently approved their Alberta Commuter Air Passenger Strategy. Ultimately, the strategy calls for working toward an effective dual airport plan and a viable provincial commuter air network providing efficient movement of people throughout the province.

Dale Monaghan, CAANA board member and marketing and communications manager for Air Mikisew, doesn’t see the group as any kind of threat to the Edmonton Regional Airports Authority, but as one that can effectively represent small commuter airlines and the communities they serve.

“I think it’s a very important organization… To me, it’s a perfect tag-team and both organizations should see it as that, and get on with a dual airport strategy that can, for the next half-century, make Edmonton and the north a prosperous team.”

A major concern for CAANA is that restrictions on air travel into Edmonton are going to affect the economy. CAANA contends that commuters—and shoppers—from Grande Prairie used to come to Edmonton, but they are now flying over the city to Calgary and some are even taking flights to Vancouver.

While many large cities across the continent and in Europe are looking to adopt the dual airport strategy, Edmonton is ahead of the game in that we already have both airports.

The City Centre Airport is a necessity as it allows efficacy of business, according to Gary Friedel, chair of CAANA. Not just in favour of the City Centre Airport for itself, he says the province needs to support all small airports and realize that they will only supplement what the Edmonton and Calgary Internationals are doing.

“A network of airports is required to make the system work. If you start handpicking and saying certain airports can’t be a part of that, you’re going to kill the whole system. The commercial traveler—the one that wants to come in to do day-to-day business is not connecting elsewhere—is not providing the business that the international airport should want or need. They come in, do their work and go back home. People are willing to pay quite a premium for efficiency. In the business world and the government world, it’s worth quite a bit of money.

Don Grimble, CAANA board member and executive director of the Kingsway Business Association, supports Friedel.

“We’re concerned with Alberta air service. There is a network of airports that is required for all of them to survive… If you break one of the strands of the network—especially one of the strongest strands—then the whole thing falls apart.”

With the strength of economic growth in the province, CAANA believes such a network is vital to continue growth in all regions. Municipalities themselves are beginning to realize that value and are increasingly supportive of such a transportation network.

“We even have municipalities that don’t even have scheduled air service… and have joined CAANA because of what we believe in, and what we are trying to promote. This isn’t just people coming to Edmonton to do business: This is Edmonton businesses who provide jobs to people in Edmonton doing business in the regions effectively and efficiently,” says George deRappard, executive director of CAANA.

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