A new report warns that upgrading Toronto’s island airport to permit jets could be significantly costlier than believed, possibly exceeding $1 billion.

The study from consultants Oliver Wyman was commissioned by Air Canada, which has been vocal in its opposition to any jet expansion at Billy Bishop Toronto City Airport being pushed by competitor Porter Airlines.

PortsToronto, the federal agency that operates the airport, has several studies due out this fall. They include a preliminary runway design and environment assessment review, which will eventually wind its way to city hall for a final decision on jets.

The Oliver Wyman report also warns new Transport Canada safety rules could raise costs substantially due to additional infrastructure investments.

PortsToronto declined to comment on the report, but Derek Vanstone, Air Canada’s vice-president of corporate strategy, government and industry affairs, and Michael Deluce, Porter Airlines’ executive vice-president and chief commercial officer, weren’t shy about weighing in.

Vanstone says the process to consider Porter’s jet expansion has been done backwards, with former mayor Rob Ford essentially taking a letter from Porter CEO Robert Deluce to jumpstart initial studies.

“This isn’t a proposal by an airport. It is a proposal by an airline,” Vanstone said. “That’s why we went to Oliver Wyman and asked them to give us their professional perspective.”

Deluce scoffed at the consultants’ report, saying it has been specifically to tailor to deliver the results that Air Canada wants.

“All of this is just one of many steps that Air Canada has taken over the last 10 years to try and disrupt a competitor from growing in the marketplace,” he said, citing repeated litigation. “This didn’t surprise anybody.”

VOTE

Runway

The main runway is 1,216 metres or 3,990 feet in length.

The Porter proposal calls for adding 200 metres at each end, plus an overrun usage assumption, for 1,658 metres, or 5,440 feet.

Air Canada’s consultants say that’s not long enough for Bombardier’s CSeries jet, especially in hot or rainy weather. The runway, they say, would need an additional 161 metres, for a total of 1,829 metres or 6,000 ft.

Vanstone: The current runway is not optimal for Q400 operations, so in certain conditions you cannot operate it in at full loads. You take it in stride. But if the airport is going to allow jets, shouldn’t the studies examine how long the runway should be for jets, optimizing it for other similar-size aircraft, and not limiting it artificially?

Deluce: That runway length is based on unrestricted CSeries operations, which is considering full maximum takeoff weight for the aircraft with full range, but that is not what Porter intends to do. We don’t need that for the mission that we’re using the aircraft for. We wouldn’t go out and order 30 CS100 planes without knowing the aircraft could operate there.

Price tag

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Preliminary studies have pegged the runway extension at $92 million to add 200 metres at each end. The Air Canada report suggests it could top more than $1 billion with significant infrastructure changes from new terminal space to a vehicle tunnel. Air Canada says it could mean higher landing fees, which would translate into higher costs for passengers.

Vanstone: Given there are limited infrastructure funds available, it raises questions of whether this is the best investment of passenger dollars or potentially taxpayer funds. The airport improvement fee which stands at $20 per departing passenger might have to jump by as much as $15 to $20.

Deluce: The current airport improvement fee is $20. About one-third is going towards paying for the new pedestrian tunnel. There is more enough capacity within the current AIF to fund the likely ultimate costs for improvements at this airport.

New Transport Canada rules

Effective Tuesday, Transport Canada has brought in new safety aerodrome standards that require wider runway strips, safety areas and greater runway to taxiway separation, which could add significant infrastructure costs.

However, PortsToronto says as long as the runway work, which has already begun under the old rules, and is fully completed by Sept. 15, 2017, then the old rules will apply. But last March, PortsToronto consultants suggested the work couldn’t be done until 2019.

Vanstone: If you were building your home, and new fire code rules were brought in, why wouldn’t you try to meet them, instead of aggressively rushing to finish it under the old rules?

Deluce: There is some transition time. We are very comfortable with a runway design that will meet requirements and will ultimately get approved by Transport Canada. There is no discomfort with the new rules.

Last word

Vanstone: The idea we are trying to squelch competition is absurd. We are trying to increase competition. We welcome competition.

Deluce: I laughed when I saw the Oliver Wyman report. It’s a report designed to invoke fear and concern, to try and disrupt this plan.

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