Toronto's New Airport Authority Plans Widespread Upgrades

The Greater Toronto Airports Authority, which officially took control of Canada's largest airport last December, has begun work on a 10-year, $1.9 billion project to upgrade existing facilities and eventually build a new terminal at Canada's largest airport.

As is the case at many other major airports across the country, Pearson's management has changed hands from the federal government to a local not-for-profit authority. In Toronto's case, operational responsibilities are now under the stewardship of Louis Turpen, GTAA's president and chief executive, and the former director of San Francisco International Airport. Under terms of the agreement with the local authority, all operational profits are poured back into the airport.

GTAA already has began to facilitate the purchase of Terminal 3, the six-year-old privately owned terminal that houses major carriers, including Calgary-based Canadian Airlines International, British Airways and Lufthansa German Airlines. The 33-year-old Terminal 1 and Terminal 2, Air Canada's 25-year-old base, already were managed by GTAA.

Earlier this month, the group signed an agreement in principle with the Terminal 3 Limited Partnership and Terminal 3 Development Corp. to acquire the facility for about $540 million. The deal is expected to close in late May.

"Time marches on, and technological obsolescence overtakes facilities like Terminal 1 and will overtake facilities like Terminal 2," said Lloyd McCoomb, executive vice president of GTAA.

To McCoomb, the purchase of Terminal 3 can only facilitate easier airport redevelopment. "It clearly is desirable for any airport to manage all the facilities because it's a balancing act between air carriers, the ground side, the land side and the air side," he said. "If you don't control all the assets, it makes keeping the balancing act going that much more difficult."

McCoomb said airport redevelopment is more difficult now because of changing airline alliances.

Turpen said that "having Terminal 3 under our direct management will bring significant efficiencies for gate utilization and give the additional capacity we will require when our terminal redevelopment program begins."

But officials stressed that the pace of terminal redevelopment is contingent on demand. Last year, Pearson handled 24.2 million passengers, up 8 percent from the previous year, while aircraft movements grew by 9.5 percent to 375,250. Passenger volumes will reach 28 million by 2000 and 36 million in 2010. according to the GTAA.

The new terminal will have 130 gates capable of handling 40 million to 50 million annually, a common parking structure linked by covered walkways and a large, centrally located customs and immigration facility.

The airport will use operational revenues to help pay for the project. Turpen said GTAA will not levy a user charge on passengers to finance capital expenses.