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NEW RUNWAY, EH? Canada reveals plans for massive airport expansion

The Canadian government will send a team to Cayman in the next few weeks, talking to Airports Authority officials about redevelopment of both the Owen Roberts and Gerrard Smith terminals and runways.

The group arrives in the wake of the 1 August Memorandum of Understanding between the Cayman Islands Airports Authority (CIAA) and Ottawa’s Canadian Commercial Corporation (CCC), and will discuss expansion plans and financing for the multi-million-dollar project.

Meanwhile, longtime aviation expert, Island Air operations administrator and University College of the Cayman Islands air transport lecturer Edward Jerrard says the redevelopment, to be effective, needs to address enormous questions of commercial expansion, infrastructure improvement and financing.

Those questions, he said, are far in excess of the Cayman Islands Airports Authority 2004 and 2006 master plan.

They imply costs of $500 million to move buildings, expand passenger terminals, create international cargo facilities, build a 2,000-foot runway extension into North Sound and overhaul legislation to make the Civil Aviation Authority into a genuinely independent regulator.

Don Olsen, who signed the airport memorandum for the CCC, and serves as its director of business development and contract structuring, told iNews that the meetings would determine “what the CIAA wants, and it has to be financially feasible.”

“The goal of any airport development is to increase traffic, help passengers and increase revenues for the government. That means attracting bigger airlines so people are spending money, and that all works to the benefit of hotels, restaurants and tourism,” Mr Olsen said.

“CCC” he said, “will put into place a bankable document as to what the Cayman Islands government would like and if it is feasible to be done. Once we have that in place, then the CCC is in a position to say whether we want to move forward.”

CCC will also identify financing options, including commercial banks that would negotiate with the Ministry of Finance. More likely, Mr Olsen indicated, was a “BOT”, a build-operate-transfer agreement giving CCC the right to administer the airport for a number of years, repaying construction costs and garnering a profit.

“It’s still very early, and the technical visit in the next few weeks will determine that. We have a lot of homework and due diligence still to do.

The CIAA’s three-stage, 18-year master plan is a $131 million programme starting with safety improvements, hangar and road relocations, cargo, passenger terminal and apron development.

General aviation developments, including hangers and taxiways, dominate the second stage, while runway extension, relocation of the fuel farm and other improvements run through 2015.

“It is so out of date, they really need to start again,” Mr Jerrard said.

Shifting the runway 100 feet northward, then extending it from 7,000 feet to 9,000 feet – on pillars into North Sound — should come first, attracting new airlines, larger aircraft and long-haul flights from Europe and both Central and South America. Taxiways will need to be moved and parking aprons expanded.

Boosting the airport’s profitability will require expansion of non-aviation business — London’s Heathrow Airport, derives 70% of its income from non-aviation activities, he said.

Cayman Airways will need to pay landing fees, reducing costs to other airlines, a cargo hub should be developed and most buildings must be moved.

“They need to get $500 million in the next 25 years and then another $500 million in operating revenues,” Mr Jerrard said, pointing out that the limited area for the airport in the master plan was inadequate .

“You need to have the capability of expansion,” he said, and the 2006 master plan did not permit modular additions. “You have to redesign all the buildings for today’s requirements, not for six years ago.”

Mr Jerrard remained skeptical that CIAA would mandate the required changes, fearing the CCC would be unable to gain Department of Tourism agreement, while Cayman Airways appeared unlikely to relinquish annual subsidies of at least $15 million.

“These are all pieces of the jigsaw puzzle,” he said, pointing to the necessary political will. “It’s not a huge job, but it’s a huge commitment.”


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