Traditional ways of running airlines and airports are about to be thrown out the window without a parachute, says an aviation industry analyst.

The traditional hub system – directing travellers to specified hubs before they board a flight to their ultimate destination – is about to give way to a resurgence of more direct flights, otherwise known as point-to-point travel, an Edmonton conference heard last week.

“The future will be different,” air-industry analyst David Gillen told a gathering of Canadian small-airport officials at the Small Airport Challenges Workshop, a two-day national joint event sponsored by the Vancouver-based Western Transportation Advisory Council and Calgary’s Van Horne Institute. “You will no longer have genuine hubs and you will see genuine connection points.”

This, he noted, as the country’s small-airport operators work to survive in a marketplace where just under half are unable to remain viable without additional external funding.

Gillen added the low-cost carrier model employed by WestJet and others – based on the success enjoyed by pioneer Southwest Airlines – is no longer a single straightforward recipe that will work for everyone.

The low-cost carriers may not be in for as bumpy a ride as the traditional legacy carriers are facing, but are being told that the example set by Southwest “does not end there. This is an evolution that will continue to go on,” said Gillen. He pointed to Australia’s Virgin Blue, which has introduced executive lounges, and the leather seats on new WestJet planes as examples of how these types of carriers are staking their claims in a shifting marketplace.

While Canada’s low-cost carriers are expected to emerge with between 35 and 45 per cent of the domestic market, said Gillen, Air Canada is going to have to rely on long-haul international destinations until the government agrees to further liberalize air travel by allowing a free market for aviation services.

Air Canada president Robert Milton has said the company backs a “true open-skies agreement” that would provide carriers in both Canada and the U.S. with the ability to link the entire North American market with the world.

Some of Canada’s small- airport operators – generally those handling less than 200,000 passengers on an annual basis – expressed concern about their futures.

George Friesen, manager of the Dryden Regional Airport in Dryden, Ont., disputed recent Transport Canada figures that show 52 per cent of the country’s small airports have operational surpluses while 48 per cent are in the red.

“I read that federal study, and if you interpret the numbers in a different way, more than 90 per cent of the small airports are in trouble. We’re going broke,” he told the conference.

“I hear the same message all around the table about the amount of money that comes out of the industry,” Friesen said later, referring to federal government taxes, rising airport rents and an air security fee. “What other mode of transportation pays a security fee?”

“We have to take a real long, hard look at the value and economic impact of small airports – especially those with very minimal or no scheduled service,” he added. “They’re a very important part of the travel infrastructure.”

Though other speakers complained of problems dealing with an airline industry in transition, increasing regulations and customers who want low prices, not all the news at the conference was negative.

“I don’t intend to minimize what my colleagues are saying, but we do need to balance the story,” said Roger Sellick, airport general manager of British Columbia’s Kelowna International Airport. “My primary reason for attending is to tell the other side of the story. There are a number of small airports that are thriving.”

One example, he said, is his own. About seven years ago, the Kelowna airport was losing $500,000 a year. Now, it’s turning a small operational surplus of $150,000.

The turning point, he said, was in 1994 when the federal government said it would get out of the airport business and turn over operations to local authorities.

“Yes, there are economic challenges, but since the 1994 policy a significant number of small airports turned over to local operators are very successful,” said Sellick.

Sellick, though, did tell workshop participants that they all face one major obstacle.

“I think at times we don’t frame our arguments properly, especially when we deal with the federal government. We get outmanoeuvred in Ottawa,” said Sellick, stressing that the airport community tends to be too fractious and there is a need to start working together with their airline partners.

FLIGHT PLAN

Here are some ways Canada’s small airports – ranging from those with no scheduled passenger service to others that transport less than 200,000 passengers on an annual basis – are carving out their own niches:

* Right-sizing airports by making sure staff and infrastructure are the right size for the community, as opposed to the older model where airports were overbuilt.

* Not just being an airport, but being the community’s airport.

* Working with area tourism attractions to draw passengers to the region.

* Extending runways, a move described as critical to opening up new destination markets.

* Using facilities in different ways. For example, transforming an abandoned runway into driving test sites for transportation or automobile companies.

* Trading services, if possible.

* Changing insurers. One Canadian small airport saved 17 per cent by switching companies.

* Bargain hunting. The conference heard how shopping for some lightbulbs at Canadian Tire, rather than using a traditional supplier, saved money.

(Laura Severs can be reached at laura@businessedge.ca)