Vancouver Takes Off -- New Terminal, Third Runway May Give B.C. Airport The Edge In Regional Battle To Become Asia's Gateway

VANCOUVER, B.C. - VYR.

The initials stand for Vancouver International Airport. Air travelers in the Northwest are going to see them more and more in the months ahead as the airport here completes a major expansion.

While the Puget Sound region argues about whether to build a third runway at Seattle-Tacoma International Airport, Vancouver is finishing taxiways for a third runway that will be operational next spring.

Add the "open skies" agreement that allows more flights to and from Canada and you have a prescription for growth that could present a major challenge to the Seattle area's bid to become a major Asian gateway.

"British Columbia says they are out to eat our lunch," says Pat Davis, head of the Washington Council on International Trade and a former Port of Seattle commissioner. The airport may be the main course.

This past summer, more than 70,000 people a day were using the Vancouver airport, testing its capacity to the limits. Customs officials set up a separate immigration office in a trailer to speed up the process.

Airport officials play down the competitive aspects of the upgraded airport, but there is no getting around the fact that it will be a strong contender in the region.

"There is a sea change in the way we run this airport," said David Emerson, president and chief executive officer of the Vancouver International Airport Authority.

There are differences between Seattle and Vancouver. Sea-Tac already attracts more than 20 million passengers a year. Extensive domestic networks feed passengers through Seattle to other destinations in Alaska and the rest of the United States.

In addition, there is a stronger, more diverse business base in the Puget Sound region. Vancouver, while home to more than 1.5 million, lacks major players in the global business world such as Boeing and Microsoft.

Still, the changes here will be impressive. When Charles Lindbergh was invited to stop here during a 1928 tour to mark his Atlantic crossing, he turned it down, saying the city lacked "an airport fit to land on."

The airport is on Sea Island, in the shadow of the Coast Mountains. It handles everything from Beaver float planes serving remote fishing camps to long-haul 747-400s arriving from Asia.

By spring next year, it will boast a new international terminal with 15 gates and 120 check-in counters, improved customs and immigration facilities, restaurants and stores. It will have a new 10,000-foot-long third runway, which will increase the airport's capacity to 425,000 takeoffs and landings a year, up from 275,000.

A state-of-the-art control tower will allow takeoffs and landings in all but the foulest weather.

Of course, on low visibility days, the controllers will not be able to use their unique language for controlling planes. When an aircraft is beginning its descent into Vancouver, it passes over the Alex Fraser bridge with its two tall uprights. Controllers ask pilots if they are "lined up over the goal posts."

The "open skies" agreement between the United States and Canada is a key to the future of the airport. Emerson said operating Vancouver profitably is a three-legged stool with domestic, foreign and U.S. flights being the three legs. The U.S. leg has been missing until the new agreement.

Before the agreement, there were only seven U.S. cities served from Vancouver. The farthest east was Chicago. In the months since the agreement was signed, the number has jumped to 16, and airport officials expect it to be more than 25 in the next three years.

Cruise-ship business is an example. In the past, a passenger often flew into Seattle and took a bus to Vancouver to catch a ship. Now there are direct flights to Vancouver and the ships.

U.S. passengers often had to drive or have friends drive them to Vancouver to catch some of the inexpensive flights to Asia and Europe that operate from there. Now there are direct flights that begin in Seattle and connect with the long-haul flights to Asia.

"We're sitting on the edge of the Pacific Rim where the world's economic center is shifting," Emerson said. "We're sitting pretty . . . if we don't blow it."

Running airport for profit

One controversial area is the airport tax to help pay for the huge improvements. It ranges from $5 to $15 depending on the flight. Canadians particularly feel it is just another tax, although the fees are common in most of the world's international airports.

Emerson makes no apologies. The tax is needed to improve the airport and bring it into the modern age. When it was run by the government, he said it was run like a bus station, not an airport.

The organization that runs the airport now is a privatized company that runs the airport for a profit. "We're running it like a business," Emerson said.

Since 1987, it has been Canadian policy to turn over airports formerly run by Transport Canada to organizations such as the Vancouver authority through long-term leases. There is a local board of directors, drawn from community and business leaders. The authorities are free from federal bureaucracies and enjoy the best of both worlds.

Emerson noted that profits are plowed back into the operation of the airport, not paid out to shareholders in the form of dividends. The authorities receive no subsidies, government financing or guarantees. And they pay the government for the lease.

Emerson pointed with "I told you so" pride to the fact that the authority will pay about $30 million in rent to the federal government this year, about $10 million more than the government made from running the airport in 1991.

"We're making progress that hasn't happened in 30 years," Emerson said. "We're building a new airport for $350 million devalued Canadian dollars. That's not bad."

Not bad, indeed. But then, almost anything will be an improvement. The present aging terminal was built to accommodate 3.5 million travelers a year, not the 10 million that went through it last year. Passengers in the past had to wait on the planes after landing because there was no room in the customs area.

Parallels with Seattle

The parallels with Seattle show both the promise and the problem.

While Vancouver is putting the finishing touches on its third runway, the Puget Sound area is still debating the airport question. Port of Seattle officials recently released an environmental statement indicating that a third runway would not contribute to an increase in noise in the area.

While Vancouver has room to grow on its island airport - the government bought up most of the land on the island in the 1970s - Sea-Tac is hemmed in by residential areas that make growth difficult.

But there may be no alternative if Seattle is to stay competitive. A decision to go ahead with a third runway at Sea-Tac is expected by spring, with a court challenge almost a certainty.

Sea-Tac is the regional leader now with more than 20 million passengers a year compared with 11 million at Vancouver and about 10 million at Portland. Cargo volumes and annual revenues are equally high in a three-way comparison.

Seattle is a large city with several global companies. It has become a center for high technology, software and aerospace, and boasts the U.S. presence for the Asia Pacific Economic Cooperation organization. All help bring traffic to the city.

But Vancouver is changing as well. With liberal immigration laws that allow foreigners to earn Canadian citizenship in less than three years, Vancouver's population has become increasingly Asian. City officials say the city is now 25 percent Asian, up from 16 percent in 1990.

Chinese immigration is particularly strong, especially from Hong Kong where business families are hedging their bets by establishing residences in Vancouver as the 1997 date nears when the colony reverts to Chinese control.

But Emerson said that competition between the areas is not a zero-sum game.

"For every 10 that visit Vancouver, two or three will go on to Washington state and Seattle,' he said. "It works the other way, too, with visitors coming from Washington state and visiting Vancouver."

Some airlines would have a problem shifting operations to Vancouver. Northwest Airlines, for example, has long-standing bilateral agreements for flights to other countries. Its authority to fly to Japan dates from the 1950s and gives it a strong competitive edge.

Northwest would not jeopardize this advantage by using Vancouver as a gateway. But as new routes are awarded, airlines see Vancouver and Sea-Tac as an either/or situation because the airports are so close to each other.

Emerson admits as much. He said it is easy to market Vancouver, when compared with California stops, because it is as much as an hour shorter flying time. "It's about the same flying time with Sea-Tac," he said.

Gateway battle

Why the battle to become the Pacific Northwest gateway?

Pride plays a part. Cities like to be known as the city in the region, the one that everyone must go to. But economics plays a huge role as well.

Port of Seattle studies have shown that an international route is worth about $150 million in revenue to a city or region. Vancouver has figured it a different way, showing that every time a 747 takes off, it leaves about $62,000 (Canadian) behind - fuel, fuel taxes, landing fees, terminal fees, crew accommodation, in-flight catering and ground transportation.

Port of Seattle officials must look at Vancouver with envy.

Emerson said that when the private company took over the airport, the new managers knew they had to fast-track decisions to move ahead. In the first six weeks of control, most of the decisions were made and the plan put in place.

If it is lucky, Sea-Tac may have a third runway by the turn of the century after a 12-year battle. Or it may not. Opponents make a good case about the need for a runway, saying there are too many commuter and other short flights at the airport that contribute to the congestion. In addition, hundreds of homes and businesses would be displaced by the third runway.

Supporters say it is needed to remain competitive.

Recently, a delegation from Seattle was heading to Osaka, Japan. The group boarded a plane in Seattle and flew to San Francisco to catch a plane to Osaka. That flight parallels the West Coast as it heads to Japan, meaning the group all but retraced its steps.

Flying to San Francisco for a flight to Asia is one thing. Flying to Vancouver is quite another because it will likely mean one less international flight landing in Seattle.

Like it or not, Sea-Tac faces the prospect of being caught in the backwash from its neighbors to the north.