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Feasibility Study Air Cargo Development at Windsor International Airport Phase 1: Market Potential Analysis

Submitted on September 04th, 2009 by:

Market Potential Analysis for Windsor International Airport

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Lufthansa Consulting GmbH Von-Gablenz-Str. 2-6 50679 Köln Germany

Registration:

Local Court of Cologne

Commercial Register HRB 17788

Managing Director:

Werner Schuessler


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Content

1. Executive Summary .................................................................... 9

2. Introduction .............................................................................. 14

3. Methodology ............................................................................. 15 3.1 Research .................................................................................................... 15 3.2 Determine Relevant Air Cargo Market ........................................................ 16 3.3 GDP driven base forecast for the Relevant Market ..................................... 17 3.4 Definition of Market Share for Windsor International Airport and creation of

base forecast .............................................................................................. 18 3.5 Consider impacts of influence factors on YQG ........................................... 20 3.6 Use Forecast Model to project YQG Cargo Volumes .................................. 20

4. Economic Environment ............................................................ 23 4.1 Economic characteristics of Canada ........................................................... 23 4.1.1 Gross Domestic Product of Canada ........................................................... 24 4.1.2 Demographic Structure of Canada ............................................................. 25 4.1.3 Foreign Direct Investments of and in Canada ............................................. 26 4.2 Economical characteristics of Ontario ......................................................... 30 4.2.1 Gross Domestic Product of Ontario ............................................................ 30 4.2.2 Trade and Infrastructure of Ontario ............................................................. 31 4.2.3 Demographics of Ontario ............................................................................ 35 4.2.4 Perishable Air Cargo and Ontario’s Perishable Trade ................................ 36 4.2.5 A closer look at the economy of Windsor .................................................... 39 4.3 Economic characteristics of Michigan, USA ................................................ 42 4.3.1 Gross Domestic Product of Michigan .......................................................... 42 4.3.2 Trade and Automotive Industry of Michigan ................................................ 44 4.3.3 Demographics of Michigan ......................................................................... 46 4.4 Canadian Trade Development .................................................................... 48 4.4.1 Canada’s Trade Partners ............................................................................ 51 4.4.2 Key Export / Import Commodities ............................................................... 52 4.4.3 Agreements impacting trade crossing the border (CA-USA) and Air Cargo

Security ...................................................................................................... 53 4.5 Canada’s Transport System and Trade by Mode of Transportation ............ 56 4.5.1 Canadian Air Transportation & Trade ......................................................... 57 4.5.2 Canadian Road Transportation and Trade .................................................. 60 4.5.3 Canadian Rail Transportation and Trade .................................................... 62 4.5.4 Canadian Marine Transportation and Trade ............................................... 64 4.6 Aviation Policies and Regulations ............................................................... 65 4.6.1 Historical Background ................................................................................. 65 4.6.2 Bilateral Air Agreements (Canada) ............................................................. 65

5. Relevant Airports and Airlines for YQG ................................... 70


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5.1 Windsor International Airport (YQG) ........................................................... 70 5.2 Competing Airports ..................................................................................... 71 5.2.1 Region of Waterloo International Airport (YKF) ........................................... 72 5.2.2 Hamilton - John C. Munro International Airport (YHM) ................................ 73 5.2.3 London International Airport (YXU) ............................................................. 74 5.2.4 Detroit Metropolitan Wayne County Airport (DTW) ..................................... 75 5.2.5 Detroit Willow Run Airport (YIP) .................................................................. 77 5.2.6 Toledo Express Airport (TOL) ..................................................................... 79 5.2.7 Toronto - Lester B. Pearson International Airport (YYZ) ............................. 80 5.2.8 Bishop International Airport (FNT) .............................................................. 82 5.3 Historic Traffic Development at YQG .......................................................... 84 5.4 Canadian Airline Market ............................................................................. 85 5.4.1 Canada’s Key Passenger and Cargo Airlines ............................................. 85 5.4.2 Other Regional and Cargo Airlines ............................................................. 89

6. Air Cargo Forecast ................................................................... 93 6.1 Influence Factors ........................................................................................ 93 6.1.1 Development of Air Cargo Related Facilities .............................................. 93 6.1.2 Distribution Centers .................................................................................... 93 6.1.3 Airline Marketing / Air Service Development ............................................... 94 6.1.4 Pre-Clearance Facility ................................................................................ 94 6.1.5 Stimulus Packages and Local Business Development ............................... 94 6.2 Assumptions for the three Forecast Scenarios ........................................... 95 6.3 Cargo Forecast Results .............................................................................. 98 6.3.1 Most Likely Scenario................................................................................... 99 6.3.2 Optimistic Scenario ....................................................................................102 6.3.3 Conservative Scenario ...............................................................................102

7. Recommendations ..................................................................103 7.1.1 Development of Air Cargo related facilities ................................................103 7.1.2 Airline Marketing / Air Service Development ..............................................104 7.1.3 Development of the “Cargo Village” ...........................................................105

8. Annex I - Cargo Forecast Data by Scenario ..........................106 8.1 Most Likely Scenario..................................................................................107 8.2 Optimistic Scenario ....................................................................................110 8.3 Conservative Scenario ...............................................................................113 8.4 Short to long term growth rates ..................................................................116

9. Annex II – Examples of Shippers, Consignees and Routings for the Windsor Region ................................................................117


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List of Figures Figure 1: Lufthansa Consulting project approach .......................................... 9 Figure 2: Data for total forecast – all three scenarios .................................. 12 Figure 3: Data for Most Likely Scenario – Comparison of Segments .......... 12 Figure 4: Lufthansa Consulting project approach ........................................ 15 Figure 5: 2008 market shares within the Relevant Air Cargo Market .......... 16 Figure 6: Air Cargo Base Forecast for the Relevant Market 2009-2034 ...... 18 Figure 7: Air Cargo Base Forecast for YQG – 2009 to 2034 ....................... 19 Figure 8: Screenshots Lufthansa Consulting “Market Model Technique” .... 21 Figure 9: From Base Forecast to three different scenarios for YQG ........... 22 Figure 10: Map of Canada showing YQG ................................................... 23 Figure 11: Nominal GDP of Canada – 1998 to 2008 ................................... 24 Figure 12: Canada’s nominal GDP growth – 1999 to 2033 ......................... 24 Figure 13: Canada’s GDP structure – 2008 ................................................ 25 Figure 14: Population density of Canada .................................................... 25 Figure 15: Top 15 cities in Canada – 2009 ................................................. 26 Figure 16: Development of Canada’s in and out flow FDI – 2004 to 2008 .. 27 Figure 17: FDI in Canada by industry – 2008 ............................................. 27 Figure 18: FDI in Canada by geographical area – 2008 ............................. 28 Figure 19: Canadian FDI abroad by industry – 2008 .................................. 28 Figure 20: Canadian FDI abroad by geographical area – 2008 .................. 29 Figure 21: Map of Ontario ........................................................................... 30 Figure 22: Ontario and its geographical regions ......................................... 30 Figure 23: GDP structure of Ontario – 2008 ............................................... 31 Figure 24: Ontario’s Real GDP – 2006 to 2013 .......................................... 31 Figure 25: Top international export markets of Ontario – 2008 ................... 32 Figure 26: Top international exports of Ontario – 2008 ............................... 32 Figure 27: Top international import markets of Ontario – 2008 ................... 33 Figure 28: Top international imports to Ontario – 2008 ............................... 33 Figure 29: Age distribution of Ontario in 2008 ............................................. 35 Figure 30: Immigration to Canada in 2008 .................................................. 35 Figure 31: Types of Perishable Air Cargo (PER) ........................................ 36 Figure 32: Ontario Agri-Food Trade Development (bn CAD) ...................... 37 Figure 33: Ontario Agri-Food Trade by Region – 2008 ............................... 37 Figure 34: Ontario’s agri-food trade per commodity group – 2008 .............. 38 Figure 35: Ontario’s agri-food trade per commodity group – 2008 .............. 38 Figure 36: Farm Statistics 2006 .................................................................. 39 Figure 37: Windor’s Real GDP growth – 2006 to 2013 ............................... 40 Figure 38: Industry Growth Rate Forecast for Windsor – 2009 to 2013 ...... 40 Figure 39: Windsor’s regional GDP by sector – 2008 ................................. 41 Figure 40: Map of Michigan ........................................................................ 42 Figure 41: USA’s GDP structure per region - 2008 ..................................... 43 Figure 42: GDP structure Michigan – 2008 ................................................. 43 Figure 43: Top international export markets from Michigan – 2008 ............ 44 Figure 44: Michigan’s Exports by industry parts - 2008 .............................. 44


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Figure 45: Top imports from Canada to Michigan – 2004 ........................... 45 Figure 46: Transportation imports from Canada to Michigan – 2004 .......... 45 Figure 47: Oil price development Michigan – Jan. 2005 to Jul. 2008 .......... 46 Figure 48: Age distribution in Michigan – 2008 ........................................... 47 Figure 49: Michigan main occupations – 2008 ............................................ 47 Figure 50: Historic Trade Development in Canada – 2005 to 2008 ............. 48 Figure 51: Canadian import growth by industry sector – 2004 to 2008 ....... 49 Figure 52: Canadian export growth by industry sector – 2004 to 2008 ....... 49 Figure 53: Canadian export growth by country – 2003 to 2008 ................... 50 Figure 54: Canadian import growth by country – 2003 to 2008 ................... 51 Figure 55: Canada’s major Export Trading Partners – 2008 ....................... 51 Figure 56: Canada’s major Import Trading Partners – 2008 ....................... 52 Figure 57: Leading exports in million CAD – 2005 to 2008 ......................... 52 Figure 58: Leading imports in million CAD – 2005 to 2008 ......................... 53 Figure 59: Canadian International Trade Value (of goods) by Transportation

Mode ......................................................................................... 56 Figure 60: Domestic Freight within Canada by Mode – 2005 (thousand of

metric tons) ................................................................................ 57 Figure 61: Int. goods shipped by air to/from Canada – ’98 to ‘08 ................ 58 Figure 62: Canadian Air Imports/Exports by world region – 2007 to 2008 .. 59 Figure 63: Top 25 Canadian Air Trade Partners – 2008 ............................. 59 Figure 64: Canadian Air Imports and Exports by commodity groups 2007-

2008 .......................................................................................... 60 Figure 65: Tonnage by Canadian For-Hire Carriers – 2004 to 2006 ........... 61 Figure 66: Canadian Int. Trade Shipped by Trucks per Country – 2008 ..... 61 Figure 67: Canadian Int. Trade Shipped by Trucks per Commodity Group –

2008 .......................................................................................... 62 Figure 68: Twenty Largest Border Crossings (CA-US) for Trucks - 2008 ... 62 Figure 69: Rail exports originating from Canada and Ontario – ‘99 to ‘08 ... 63 Figure 70: Rail imports originating from Canada and Ontario – ‘99 to ‘08 ... 63 Figure 71: Exports/Imports by Province/Territory of Origin/Clearance – ‘08 64 Figure 72: Tonnage Handled in Canada’s Port System – 2005 to 2007 ..... 64 Figure 73: Canadian Bilateral Air Agreements and Designated Carriers .... 66 Figure 74: Runways YQG ........................................................................... 70 Figure 75: Airlines serving YQG ................................................................. 70 Figure 76: Comparison of YQG’s Competing Airports ................................ 71 Figure 77: Runways YKF ............................................................................ 72 Figure 78: Airlines serving YKF .................................................................. 72 Figure 79: Landing Fees YKF ..................................................................... 72 Figure 80: Runways YHM ........................................................................... 73 Figure 81: Airlines serving YHM ................................................................. 73 Figure 82: Landing Fees YHM .................................................................... 74 Figure 83: Runways YXU ........................................................................... 74 Figure 84: Airlines serving YXU .................................................................. 75 Figure 85: Runways DTW ........................................................................... 75 Figure 86: Total Air freight DTW – 2008 to 2009 ......................................... 76 Figure 87: International Air freight DTW – 2008 to 2009 ............................. 76


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Figure 88: Domestic Air freight DTW – 2008 to 2009 .................................. 76 Figure 89: Airlines serving DTW ................................................................. 77 Figure 90: Charges DTW ............................................................................ 77 Figure 91: Runways YIP ............................................................................. 78 Figure 92: Airlines serving YIP .................................................................... 78 Figure 93: Landing Fees YIP ...................................................................... 79 Figure 94: Runways TOL ............................................................................ 79 Figure 95: Airlines serving TOL .................................................................. 80 Figure 96: Runways YYZ ............................................................................ 80 Figure 97: Airlines serving YYZ .................................................................. 81 Figure 98: Landing fees YYZ ...................................................................... 81 Figure 99: Runways FNT ............................................................................ 82 Figure 100: Air cargo tonnage at FNT – 01/2008 to 05/2009 ...................... 82 Figure 101: Airlines serving FNT ................................................................ 83 Figure 102: FedEx air cargo tonnage at FNT – 01/2008 to 05/2009 ........... 83 Figure 103: Total Aircraft movements at Windsor Airport – 2004 to 2008 ... 84 Figure 104: Air Canada ............................................................................... 85 Figure 105: Cargo Revenues Air Canada ................................................... 86 Figure 106: Cargo Airline Ranking 2007 ..................................................... 86 Figure 107: WestJet.................................................................................... 87 Figure 108: Air Transat ............................................................................... 87 Figure 109: CargoJet Airways..................................................................... 88 Figure 110: Other regional and cargo airlines ............................................. 89 Figure 111: Aggregated Average Growth Rate of the Total Cargo Forecast98 Figure 112: Total Air Cargo Forecast – all three Scenarios ........................ 98 Figure 113: Most Likely Air Cargo Forecast for YQG .................................. 99 Figure 114: Impact of Influence Factors on Most Likely Scenario ............... 99 Figure 115: Most Likely Scenario – Inbound vs. Outbound ....................... 100 Figure 116: Most Likely Scenario – International vs. Domestic ................. 100 Figure 117: Most Likely Scenario – Comparison of Cargo Segments ....... 101 Figure 118: Optimistic Air Cargo Forecast for YQG .................................. 102 Figure 119: Conservative Air Cargo Forecast for YQG ............................. 102 Figure 120: Air Service Development Approach ....................................... 104 Figure 121: Development of the Cargo Village ......................................... 105 Figure 122: Data for Total Forecast – all three Scenarios ......................... 106 Figure 123: Data for Most Likely Scenario – Inbound vs. Outbound ......... 107 Figure 124: Data for Most Likely Scenario – International vs. Domestic ... 108 Figure 125: Data for Most Likely Scenario – Comparison of Segments .... 109 Figure 126: Data for Optimistic Scenario – Inbound vs. Outbound ........... 110 Figure 127: Data for Optimistic Scenario – International vs. Domestic ..... 111 Figure 128: Data for Optimistic Scenario – Comparison of Segments ...... 112 Figure 129: Data for Conservative Scenario – Inbound vs. Outbound ...... 113 Figure 130: Data for Conservative Scenario – International vs. Domestic 114 Figure 131: Data for Conservative Scenario – Comparison of Segments . 115 Figure 132: Growth Rates ......................................................................... 116


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List of Abbreviations AADT Annual Average Daily Traffic a/c Aircraft approx. Approximately ATI Air Transport Intelligence bn Billion CA Canada CAD Canadian Dollar CAGR Compound Average Growth Rate CASS Cargo Accounting Settlement System et al and others e.g. for example etc. et cetera EU European Union FDI Foreign Direct Investments GDP Gross Domestic Product IATA International Air Transport Association IBET Integrated Border Enforcement Team ICAO International Civil Aviation Organization i.e. that means ISO International Standard Organization km Kilometers LCG Lufthansa Consulting GmbH LH Lufthansa m Million MPA Market Potential Analysis n.a. not available O&D Origin and Destination PAX Passenger PIP Partners in Protection RFS Road Feeder Services RTK Revenue Ton Kilometers sqkm square kilometers sqm square meter SSCMS Secure Supply Chain Management System UN United Nations USD US Dollar YQG Windsor International Airport


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1. Executive Summary

Lufthansa Consulting recognizes the uniqueness of Windsor International Airport’s position in the regional and national economy and its desire to de-rive added value from a location in the midst of a region of high-level com-mercial, transportation and logistics activities. Air cargo can play a large role in developing an airport; in the case of Wind-sor International Airport (YQG), considerable quantities of air cargo are gen-erated in its catchment area, mainly by the automotive and agricultural sec-tors. YQG furthermore is characterized by excellent accessibility and pro-vides ample space for development and intermodal transshipments, but currently lacks state-of-the-art infrastructure and facilities to process and handle air cargo. The Market Potential Study and Forecast have been defined as Phase 1 of a comprehensive Feasibility Study for Windsor International Airport. The Study’s objective has been to analyze and assess the potential for YQG to build up its air cargo business in the short, medium and long term. The report provides reliable figures on which to base subsequent deci-sions in regard to the development of suitable, economically viable facilities for air cargo services in line with the market requirements. The figure below shows the steps that have been carried out to compile the Market Potential Study and the Air Traffic Forecast. The figure also includes Phase 2 and 3 of the Feasibility Study. Figure 1: Lufthansa Consulting project approach

Determine Relevant Air Cargo Market

for YQG

Define Market Share for YQG

and create a base forecast

Use Forecast Model to project

YQG Cargo Volumes

Consider Impacts of Influence

Factors on YQG

Develop GDP driven Traffic

Forecast for the Relevant Air

Cargo MarketRe

sea

rch


for YQG




YQG Cargo Volumes


Factors on YQG



Cargo MarketRe

sea

rch

Market Potential Study and Forecast

Conceptual Planning Study and Financial

Viability Analysis

Detailed Design and Implementation

Management

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deci

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Source: Lufthansa Consulting

The Market Potential Analysis takes into account all factors having an impact on the demand and supply situation for Windsor International Airport and forecasts cargo traffic over the next twenty five years (2009-2034). The re-sults show that YQG – building on its strengths – has the potential to suc-


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cessfully develop its air cargo business. An enlarged business base, but also the implementation of specific influence factors will enable Windsor to be-come a true full service airport. Lufthansa Consulting evaluated a catchment area of 350 km around Wind-sor International Airport. Eight airports within this radius, considered the most important in the region in terms of air cargo, and YQG have been de-fined as Relevant Air Cargo Market. A GDP-driven base forecast for the Relevant Market has been calculated. To derive a base forecast for YQG only, Lufthansa Consulting has made logical and profound assumptions on the market share development of YQG for the following air cargo segments (see chapter 6.3 and Annex I) respec-tively for inbound and outbound traffic: International Scheduled Cargo Domestic Scheduled Cargo International Charter Cargo Domestic Charter Cargo International Integrator Domestic Integrator International Road Feeder Services - RFS (Trucking) Domestic Road Feeder Services - RFS (Trucking) Since the base forecast for Windsor does not consider the local and regional influence factors it has been modified and substantiated by taking specific influence factors (determinants) into account that are a precondition for air cargo development at YQG: Specific micro-economic influence factors Development of Air Cargo Related Facilities Development of Distribution Centers Implementation of Airline Marketing / Air Service Development Initiatives Specific macro-economic influence factors Establishment of a U.S. Pre-Clearance Facility Stimulus Packages and Local Business Development How the different influence factors affect the air cargo forecast is outlined in chapter 6.2. To a large degree, air cargo traffic relies on scheduled, frequent passenger services in hub-and-spoke as well as in point-to-point traffic. YQG is present-ly suffering from a lack of scheduled uplift capacity. The volume currently transported is almost entirely based on the occasional charter flight. As a


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result, YQG is not being recognized as a cargo airport by either forwarders or shippers. Field research has shown that shippers would be inclined to ship through YQG if cargo capacity were provided on a regular basis. The demand for cargo capacity by local and regional shippers adds to the attrac-tion of YQG for cargo and passenger airlines. However, the growth of the air cargo business at YQG is likely to be initially based on Cargo Charters and truck-based services for transit shipments. Onward transportation by truck may occur on road feeder service or flying trucks, in which a truck substi-tutes a flight. YQG is presently handicapped in its cargo development as it lacks specific cargo handling and storage facilities. The ability to handle cargo is rudimen-tary and not in line with international handling practices. The establishment of a modern, efficient Air Cargo Terminal to accommodate general and spe-cial cargo (e.g. perishables, valuable cargo) with supporting facilities and distribution centers (e.g. for forwarders and logistical service providers) would be a major step for YQG towards becoming a full-service airport. It would also improve the competitive position of YQG and be a prerequisite in attracting cargo business to YQG. Further, the establishment of an inte-grated Pre-Clearance Facility for cargo intending to cross the Canadian-US border will serve to significantly increase the air cargo opportunities. All identified influence factors have been defined for three different scenarios to project the air cargo forecast for YQG in a comprehensive market model: Optimistic Scenario describing the best possible future development Conservative Scenario describing the worst possible development Most Likely Scenario with the highest probability for realization from to-

day’s point of view representing the most probable development path. It is based on current expectations and the most viable forecast for the fu-ture development.


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Figure 2: Data for total forecast – all three scenarios

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Source: Lufthansa Consulting In the most likely scenario the impacts result in an average growth rate of 28.17% (for the forecast period 2009-2034) which is based on the fact that Windsor International Airport starts off the cargo business with a very low volume. It is expected that the total cargo tonnage at Windsor International Airport will grow from 161 tons in 2009 to 79,708 tons in 2034. It is assumed that Road Feeder Services (RFS) and Charter Traffic create the majority of the cargo tonnage for YQG. The dominance of the forecasted cargo tonnage that is created by RFS reflects the role of Windsor as a transit location for cargo being unloaded from trucks crossing the border between the U.S. and Canada. Figure 3: Data for Most Likely Scenario – Comparison of Segments Metric tons

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Scheduled Cargo - Most Likely Charter Cargo - Most Likely Integrator Cargo - Most Likely RFS (Trucking) - Most Likely



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Considering the remarkable business forces and competition surrounding the issue of air cargo potential for YQG, it is important to point out that cer-tain steps will have to be taken to realize this potential as set out above. The results of the Market Potential Analysis form the basis for the subse-quent phases of the Feasibility Study: the Conceptual Planning Study and Financial Viability Analysis (Phase 2) as well as the Detailed Design and Implementation Management (Phase 3). Based on the positive outcome of this analysis, Lufthansa Consulting recommends that Windsor International Airport proceed with developing the business case, infrastructure and facili-ties to meet the air cargo market potential in this region. YQG’s most likely market forecast carries great potential of proving a successful business case for a nucleus of an expanding air cargo logistics infrastructure or Air Cargo Village at YQG. Phase 2 will also aim to identify and support the investment decisions for a terminal or facility operator based on the financial viability of this project.


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2. Introduction

Owing to its traditions, the rich industrial history and the requirements of a global economy, the City of Windsor has clearly foreseen the need to up-grade its aviation infrastructure and to increase the available uplift, as these are prerequisites for high-quality, time-sensitive transportation of passengers and cargo. But quality air transportation for passengers and cargo has to take into account the entire journey from the point of origin to the final desti-nation. Any kind of infrastructure upgrade, airport promotion or such, needs to be in line with the development of the specific market, i.e. expensive efforts to upgrade or market an airport should have a sound basis rooted in the expe-rience and expectations of the players in the industry. Lufthansa Consulting has been entrusted with establishing this basis or Mar-ket Potential Analysis, which takes into account all the factors that have an impact on the demand and supply situation for Windsor International Airport. Elements of the study are: Development in the state and country; political, macro-economic and

demographic factors Analysis of the situation and future developments of competing modes of

transportation Analysis of the situation and future developments of competing airports;

definition of relevant airports competing for air traffic Analysis of domestic and international air and road transport volumes in

the past Forecast of Market Potential (Conservative, Most likely and Optimistic

Scenario). The focal point of this Market Potential Analysis is the forecast for cargo traffic, which is given for 25 years (2009-2034), allowing the decision-makers to devise and implement a phased, capacity-related development scheme, thereby minimizing expenditure and risk. The advantages are manifest: in-vestments can be made based on revenues accrued from previous devel-opment phases; investments can be pinpointed and fine-tuned to reflect actual traffic and other developments (e.g. Cargo Village) allowing for more accurate and tailor-made spending; investors (e.g. under a PPP scheme) can be attracted more easily as revenue streams correlate with anticipated traffic volumes. This report provides a summary of all findings and conclusions of Lufthansa Consulting. It is intended to be the basis for the subsequent phases of the Feasibility Study.


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3. Methodology

The following chapter contains a description of the methodology applied by Lufthansa Consulting in the course of this study. The Market Potential and Forecast Study have been defined as Phase 1 of a comprehensive Feasibili-ty Study for Windsor International Airport. The figure below shows the steps that have been carried out to compile the Market Potential Study and the Air Traffic Forecast. The figure also includes Phase 2 and 3 of the Feasibility Study. Figure 4: Lufthansa Consulting project approach


for YQG




YQG Cargo Volumes


Factors on YQG



Cargo MarketRe

sea

rch


for YQG




YQG Cargo Volumes


Factors on YQG



Cargo MarketRe

sea

rch

Market Potential Study and Forecast

Conceptual Planning Study and Financial

Viability Analysis

Detailed Design and Implementation

Management

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The steps shown will be described in detail in the following chapters.

3.1 Research

A two week on-site visit in Windsor was performed by a team of Lufthansa Consulting experts during calendar week 13 and 14 in 2009. The interview partners who were approached in the course of this project and the findings of the discussions with these experts provided a comprehensive picture of the current status of Windsor International Airport and its opera-tions, as well as the respective developments which are to be expected. This insight into the current situation (including -amongst others- the shortcom-ings of the existing infrastructure and the expectations for future develop-ments) represents an important basis for any considerations regarding the future development potential of the airport. 44 interviews were conducted in Windsor, Toronto, Detroit, at a trade con-vention in Las Vegas and at other locations. The Lufthansa Consulting ex-perts conducted interviews with airlines, shippers, forwarders, and govern-ment agencies in order to gain a broad and comprehensive picture of the


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future developments and potentials in the regional and international aviation market. As one outcome of the interviews Annex II (page 117) includes some exemplary routings for shipments originating from or destined for the Windsor region. The results were based on a multitude of current micro and macro-economic data that were thoroughly analyzed by using econometrical models and by taking advantage of Lufthansa Consulting’s various data bases and expe-rience gained in similar projects. Thus, the information collected and gener-ated during this project phase has been compared and enriched with Luf-thansa Consulting’s extensive experience in the Canadian aviation market in order to derive a comprehensive picture of the outlook for Windsor Interna-tional Airport.

3.2 Determine Relevant Air Cargo Market

To determine the Relevant Air Cargo Market Lufthansa Consulting has eva-luated a catchment area of 350 km around Windsor International Airport. All airports within this radius have been analyzed by the Lufthansa Consulting experts. Eight airports that are the most important in the region in terms of air cargo, apart from YQG, were selected. The air cargo tonnage in 2008 that was handled at these eight airports together with YQG’s tonnage was defined as the Relevant Air Cargo Market. The following eight airports were chosen of which four airports are situated in the U.S. and four airports in Canada. Figure 5: 2008 market shares within the Relevant Air Cargo Market

Windsor (YGQ)0%

Detroit (DTW)16%

Toronto (YYZ)36%

Toledo (TOL)27%

Toronto Hamilton7%

Waterloo (YKF)0%

Detroit Willow Run (YIP)13%

Bishop Airport (FNT)

1%

London (YXU)0%

Total Tonnage 2008:1,326,173 metric tons(Export & Import)

<1%

<1%

<1%

Source: Data collected from the respective airports


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3.3 GDP driven base forecast for the Relevant Market

In general a close relation between the development of a country’s economic growth, as shown by the GDP growth and the development of the air cargo volumes of this country can be identified. Nevertheless, for deeper analysis it has to be realized that this correlation is highly dependent on many factors exceeding the development of the GDP of this country. While there are cer-tain rules of thumb that could be applied to the correlation between air cargo traffic growth and economic growth, it is important to understand the specific correlation of these two factors in each separate market. As each market environment is different, an in-depth analysis should be undertaken of the actual correlation between the growth rates observed. This can be done by analyzing the historic timelines of the traffic and eco-nomic development of the target country or airport using a regression analy-sis method. Based on these findings a multi-variable formula can be derived, representing the interdependency of the two factors with the highest correla-tion factors possible. The historical tonnage development of the Relevant Market for the last 10 years (from 1999 to 2008) has been compared to the historical development of the following GDP figures by carrying out a regression analysis. GDP Canada GDP USA GDP NAFTA GDP EU GDP Asia Pacific GDP World Based on the regression analysis a base forecast for the Relevant Market until 2034 has been calculated. The base forecast for the Relevant Market is only GDP-driven. Local and regional influence factors have been considered in the detailed air cargo forecast for YQG at a later stage.


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Figure 6: Air Cargo Base Forecast for the Relevant Market 2009-2034

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3.4 Definition of Market Share for Windsor International Airport and creation of base forecast

YQG is part of the Relevant Market and based on different influence factors will reach a certain market share within this market. The Lufthansa Consult-ing experts have made logical and profound assumptions on the market share development of YQG within the relevant market for the following air cargo segments. All segments have been defined for inbound and outbound cargo respectively. International Scheduled Cargo Domestic Scheduled Cargo International Charter Cargo Domestic Charter Cargo International Integrator Domestic Integrator International RFS (Trucking) Domestic RFS (Trucking) Integrators are the only logistic providers who offer all services, which are traditionally handled by the forwarders, transportation companies, customs brokers and airlines, out of one hand. The integrative organization and the quick handling of cargo in a well-established network are the most important factors for their customers. Usually all express companies, such as FedEx, DHL, TNT etc. are referred to as Integrators. A Road Feeder Service (RFS) is a truck which substitutes a flight. This transportation mode is especially popular in Europe, where the RFS is orga-nized by an airline, while the operation is done by forwarding or trucking


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companies. The RFS operates under a real flight number, is defined by ori-gin and destination and certain “on” and “off-block” times. Even the Airway Bills (AWB) show the “truck flight number” and the exact origin and destina-tion. All defined market shares have been applied to the Relevant Market to re-ceive a base line forecast for YQG. This forecast does not consider other local and regional influence factors. These have been considered in the fol-lowing step. Figure 7: Air Cargo Base Forecast for YQG – 2009 to 2034

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

200

920

10

2011

2012

201

32

014

201

520

1620

172

018

201

920

20

2021

202

22

023

202

420

25

2026

202

72

028

202

920

3020

312

032

203

320

34

Total

Outbound

Inbound

metric tons



20

3.5 Consider impacts of influence factors on YQG

For this study Lufthansa Consulting has used a complex methodological approach based on a composition of various activities. A fundamental basis was extensive desk research and numerous interviews (see chapter 3.1) concerning specific macro and micro-economic influence factors relevant for the development of the air cargo traffic at Windsor International Airport. The following specific micro and macro-economic influence factors have been identified. Specific micro-economic influence factors: Development of Air Cargo Related Facilities Distribution Centers Airline Marketing / Air Service Development Specific macro-economic influence factors: Pre-Clearance Facility Stimulus Packages and Local Business Development The characteristics of each influence factor are further described in chapters 6.1 and 6.2.

3.6 Use Forecast Model to project YQG Cargo Volumes

The planning and development of Windsor International Airport is influenced by the specific market environment – an environment being characterized by a high degree of uncertainties and ongoing developments. As a conse-quence a high degree of flexibility had to be integrated into all data evalua-tion and assessment phases. In order to account for this framework and its inherent complexity, Lufthansa Consulting has followed its “Market Model Technique” to integrate, verify and double-check data provided by and collected from numerous sources. This technique is carried out with a sophisticated Microsoft Excel © based tool that allows adjusting and testing of specific market developments and simu-lates their effects on the aviation industry.


21

Figure 8: Screenshots Lufthansa Consulting “Market Model Technique” AssumptionsAssumptions

Forecast Growth

Rates Overview

Forecast Growth

Rates Overview

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Total Cargo Most Likely 161 263 7,391 14,488 18,133 19,718 26,121 30,396 35,283 38,913 41,173 48,500Total Cargo Conservative 161 245 5,975 11,023 12,859 14,642 17,240 18,206 19,542 22,130 24,459 31,822Total Cargo Optimistic 161 265 10,393 18,916 27,461 30,516 34,746 37,357 43,106 46,076 53,596 56,671

Inbound Most Likely 93 111 3,789 9,528 11,587 12,386 14,718 15,999 18,542 20,458 21,660 25,099Inbound Conservative 93 111 3,144 7,155 8,064 8,893 10,451 11,047 11,828 13,237 14,487 18,843Inbound Optimistic 93 111 5,699 12,380 14,835 16,431 18,529 19,940 22,931 24,522 27,744 29,287

Outbound Most Likely 68 152 3,603 4,960 6,546 7,333 11,403 14,397 16,742 18,455 19,513 23,401Outbound Conservative 68 134 2,832 3,868 4,795 5,749 6,789 7,159 7,714 8,893 9,971 12,979Outbound Optimistic 68 154 4,695 6,535 12,626 14,085 16,217 17,418 20,176 21,554 25,852 27,384

International Most Likely 154 256 5,744 8,284 11,285 12,270 17,980 21,448 25,344 27,964 28,511 34,126International Conservative 154 238 4,328 6,259 7,532 8,594 10,569 10,933 11,297 12,708 14,352 20,345International Optimistic 154 258 8,746 11,869 19,823 22,185 25,793 27,588 32,336 34,285 40,291 41,334

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 12,662 14,374Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337

Scheduled Cargo Most Likely 7 7 11 1,151 2,028 2,158 2,448 2,665 4,027 4,075 4,165 5,540Scheduled Cargo Conservativ 7 7 11 611 979 1,375 1,784 1,805 1,831 2,040 2,137 3,826Scheduled Cargo Optimistic 7 7 1,511 2,331 2,761 3,083 3,142 3,367 3,411 4,778 4,876 4,934

Charter Cargo Most Likely 154 256 964 1,278 1,693 1,876 3,962 5,329 5,460 5,593 5,728 5,865Charter Cargo Conservative 154 238 588 766 1,174 1,590 1,804 1,963 2,054 2,146 2,271 2,367Charter Cargo Optimistic 154 258 1,566 1,808 5,151 5,377 8,690 8,932 9,130 9,307 9,487 9,668

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 0Integrator Cargo Conservative 0 0 0 0 0 0 0 0 0 0 0 0Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704

Trucked Cargo Most Likely 0 0 6,416 12,058 14,411 15,684 19,711 22,401 25,797 29,245 31,280 37,095Trucked Cargo Conservative 0 0 5,376 9,646 10,706 11,677 13,652 14,437 15,657 17,944 20,051 25,629Trucked Cargo Optimistic 0 0 7,316 14,777 19,549 22,056 22,914 25,058 30,566 31,991 37,595 40,364

Forecast Summary2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Cargo Most Likely 161 263 7,391 14,488 18,133 19,718 26,121 30,396 35,283 38,913 41,173 48,500Total Cargo Conservative 161 245 5,975 11,023 12,859 14,642 17,240 18,206 19,542 22,130 24,459 31,822Total Cargo Optimistic 161 265 10,393 18,916 27,461 30,516 34,746 37,357 43,106 46,076 53,596 56,671

Inbound Most Likely 93 111 3,789 9,528 11,587 12,386 14,718 15,999 18,542 20,458 21,660 25,099Inbound Conservative 93 111 3,144 7,155 8,064 8,893 10,451 11,047 11,828 13,237 14,487 18,843Inbound Optimistic 93 111 5,699 12,380 14,835 16,431 18,529 19,940 22,931 24,522 27,744 29,287

Outbound Most Likely 68 152 3,603 4,960 6,546 7,333 11,403 14,397 16,742 18,455 19,513 23,401Outbound Conservative 68 134 2,832 3,868 4,795 5,749 6,789 7,159 7,714 8,893 9,971 12,979Outbound Optimistic 68 154 4,695 6,535 12,626 14,085 16,217 17,418 20,176 21,554 25,852 27,384

International Most Likely 154 256 5,744 8,284 11,285 12,270 17,980 21,448 25,344 27,964 28,511 34,126International Conservative 154 238 4,328 6,259 7,532 8,594 10,569 10,933 11,297 12,708 14,352 20,345International Optimistic 154 258 8,746 11,869 19,823 22,185 25,793 27,588 32,336 34,285 40,291 41,334

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 12,662 14,374Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337

Scheduled Cargo Most Likely 7 7 11 1,151 2,028 2,158 2,448 2,665 4,027 4,075 4,165 5,540Scheduled Cargo Conservativ 7 7 11 611 979 1,375 1,784 1,805 1,831 2,040 2,137 3,826Scheduled Cargo Optimistic 7 7 1,511 2,331 2,761 3,083 3,142 3,367 3,411 4,778 4,876 4,934

Charter Cargo Most Likely 154 256 964 1,278 1,693 1,876 3,962 5,329 5,460 5,593 5,728 5,865Charter Cargo Conservative 154 238 588 766 1,174 1,590 1,804 1,963 2,054 2,146 2,271 2,367Charter Cargo Optimistic 154 258 1,566 1,808 5,151 5,377 8,690 8,932 9,130 9,307 9,487 9,668

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 0Integrator Cargo Conservative 0 0 0 0 0 0 0 0 0 0 0 0Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704

Trucked Cargo Most Likely 0 0 6,416 12,058 14,411 15,684 19,711 22,401 25,797 29,245 31,280 37,095Trucked Cargo Conservative 0 0 5,376 9,646 10,706 11,677 13,652 14,437 15,657 17,944 20,051 25,629Trucked Cargo Optimistic 0 0 7,316 14,777 19,549 22,056 22,914 25,058 30,566 31,991 37,595 40,364

Forecast Summary

Cargo Forecast YQG Most Likely Scenario

Cargo Forecast YQG Most Likely Scenario

Cargo Forecast YQG Optimistic ScenarioCargo Forecast YQG Optimistic Scenario

Macro Determinants Most Likely Scenario Micro Determinants Most Likely Scenario

Macro Determinants Conservative Scenario

Macro Determinants Optimistic Scenario

Micro Determinants Conservative Scenario

Micro Determinants Optimistic Scenario

Regression

Forecast Competing Airports

GDP Forecast

Historic Data

Forecast


All identified influence factors have been defined for three different scenarios to project the air cargo forecast for YQG in a comprehensive market model: Optimistic Scenario describing the best possible future development Conservative Scenario describing the worst possible development Most Likely Scenario with the highest probability for realization from to-

day’s point of view representing the most probable development path The scenario technique is a method to consolidate different realistic possible developments or development corridors of certain environmental factors into complex models, which represent a broad bandwidth of possible and proba-ble pictures of the future. Using the scenario technique, quantitative data and information is combined with qualitative information, estimations and opinions. Thus the results are detailed descriptions of one or several possi-ble future situations.


22

Figure 9: From Base Forecast to three different scenarios for YQG

Development of Air Cargo Related Facilities

Distribution Centers

Airline Marketing / Air Service Development

Pre-Clearance Facility

Stimulus Packages and Local Business Development

Base Forecast for YQG Air Cargo Tonnage

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

metric tons

3

1

2

1

2

Macro and Micro economic influence Factors

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Total Cargo Most Likely 161 263 7,391 12,078 14,202 15,058 22,082 30,208 33,767 38,705 39,922 48,025 52,944 54,766 56,774 58,703 60,665 62,197 66,068 67,921 69,804 71,726 73,604 75,512 77,884 79,440Total Cargo Conservative 161 370 5,976 9,314 10,093 11,067 16,659 18,098 19,433 22,051 24,347 31,709 33,030 35,710 38,521 40,242 41,994 43,316 44,895 47,548 49,201 50,889 52,530 54,199 57,889 59,217Total Cargo Optimistic 161 265 14,348 21,207 25,218 27,545 34,555 38,490 44,253 45,910 54,091 57,172 62,199 64,127 66,242 68,280 72,430 74,095 77,061 79,038 81,047 83,096 85,103 87,141 89,646 91,335

Inbound Most Likely 93 111 3,789 8,128 9,269 9,778 13,738 15,907 17,786 20,356 21,037 24,840 27,386 28,378 29,531 30,612 31,710 32,560 34,599 35,632 36,681 37,753 38,798 39,861 41,192 42,049Inbound Conservative 93 111 3,144 6,105 6,566 7,111 10,396 10,992 11,772 13,180 14,430 18,784 19,555 20,984 22,560 23,560 24,579 25,348 26,266 27,725 28,685 29,666 30,619 31,589 33,866 34,640Inbound Optimistic 93 111 5,269 11,060 13,024 14,246 18,357 20,428 23,425 24,359 27,579 29,120 31,716 32,759 33,962 35,093 37,282 38,194 39,778 40,869 41,978 43,109 44,216 45,339 46,733 47,653

Outbound Most Likely 68 152 3,603 3,950 4,933 5,279 8,343 14,301 15,981 18,349 18,886 23,185 25,559 26,387 27,243 28,092 28,955 29,637 31,469 32,289 33,123 33,973 34,806 35,651 36,692 37,391Outbound Conservative 68 259 2,833 3,209 3,527 3,957 6,263 7,107 7,661 8,871 9,918 12,925 13,475 14,726 15,962 16,682 17,415 17,968 18,628 19,823 20,516 21,223 21,911 22,610 24,023 24,577Outbound Optimistic 68 154 9,080 10,147 12,195 13,299 16,199 18,062 20,828 21,551 26,512 28,052 30,483 31,368 32,281 33,187 35,148 35,900 37,283 38,169 39,069 39,987 40,888 41,802 42,913 43,682

International Most Likely 154 256 5,744 5,874 7,355 7,610 13,941 21,260 23,828 27,756 28,301 33,664 37,676 38,570 39,376 40,152 40,936 41,656 44,505 45,311 46,130 46,962 47,731 48,509 49,301 50,104International Conservative 154 363 4,329 4,550 4,767 5,019 9,988 10,825 11,188 12,629 14,241 20,233 20,680 22,466 24,122 24,723 25,333 25,877 26,468 28,110 28,734 29,369 29,938 30,514 32,142 32,750International Optimistic 154 258 12,701 14,161 17,580 19,213 25,603 28,721 33,482 34,119 40,786 41,835 45,943 46,933 47,835 48,707 51,669 52,509 53,401 54,307 55,228 56,163 57,037 57,921 58,820 59,731

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 11,622 14,361 15,269 16,196 17,398 18,552 19,728 20,541 21,563 22,610 23,675 24,765 25,873 27,003 28,583 29,336Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477 12,350 13,243 14,400 15,519 16,662 17,440 18,427 19,439 20,467 21,521 22,593 23,685 25,747 26,468Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337 16,256 17,194 18,407 19,573 20,761 21,585 23,659 24,730 25,819 26,933 28,066 29,220 30,826 31,604

Scheduled Cargo Most Likely 7 7 11 151 216 222 2,388 2,604 2,639 3,997 4,086 4,134 5,509 5,577 5,640 5,705 5,770 5,839 5,905 5,976 6,044 6,117 6,186 6,256 6,755 6,404Scheduled Cargo Conservativ 7 7 11 11 11 155 1,749 1,770 1,795 2,003 2,100 3,789 3,833 3,881 3,926 3,971 4,016 4,065 4,111 4,162 4,209 4,261 4,310 4,359 4,836 4,463Scheduled Cargo Optimistic 7 7 11 214 217 306 3,030 4,580 4,639 4,694 5,454 5,519 6,910 6,994 7,074 7,155 7,236 7,322 7,404 7,492 7,577 7,668 7,755 7,843 8,359 8,027

Charter Cargo Most Likely 154 256 964 1,038 1,210 1,386 2,047 5,291 5,421 5,553 5,688 5,825 5,963 6,351 6,681 6,902 7,127 7,355 7,588 7,825 8,066 8,312 8,485 8,660 8,839 9,020Charter Cargo Conservative 154 363 589 767 935 1,139 1,316 1,950 2,040 2,163 2,257 2,353 2,451 2,809 3,080 3,260 3,443 3,630 3,821 4,015 4,214 4,416 4,545 4,675 4,809 4,944Charter Cargo Optimistic 154 258 4,088 4,199 7,493 7,749 8,609 8,851 9,047 9,223 9,402 9,583 9,765 10,197 10,571 10,837 11,106 11,379 11,657 11,940 12,228 12,521 12,742 12,965 13,193 13,424

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,102 1,114 1,127 1,140 1,153 1,166 1,179 1,192 1,206 1,219 1,233 1,247 1,261Integrator Cargo Conservative 0 0 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,101 1,114 1,126 1,139 1,152 1,165 1,178 1,191 1,205 1,219 1,232Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704 1,724 1,744 1,764 1,784 1,805 1,825 1,845 1,866 1,887 1,909 1,931 1,952 1,975 1,997

Trucked Cargo Most Likely 0 0 6,416 10,888 12,776 13,449 17,647 22,313 25,707 29,154 30,148 36,989 40,383 41,736 43,338 44,969 46,629 47,850 51,410 52,942 54,502 56,092 57,714 59,362 61,043 62,754Trucked Cargo Conservative 0 0 5,376 8,536 9,147 9,773 13,594 14,379 15,598 17,884 19,990 25,567 26,747 27,943 30,426 31,910 33,421 34,494 35,824 38,219 39,613 41,034 42,484 43,960 47,026 48,577Trucked Cargo Optimistic 0 0 10,249 16,794 17,509 19,490 22,916 25,060 30,567 31,993 37,596 40,366 43,799 45,192 46,833 48,505 52,284 53,569 56,154 57,739 59,354 60,998 62,676 64,380 66,119 67,887Outbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Optimistic ScenarioOutbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Conservativ ScenarioOutbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034Total Cargo Most Likely 161 263 7,391 12,078 14,202 15,058 22,082 30,208 33,767 38,705 39,922 48,025 52,944 54,766 56,774 58,703 60,665 62,197 66,068 67,921 69,804 71,726 73,604 75,512 77,884 79,440Total Cargo Conservative 161 370 5,976 9,314 10,093 11,067 16,659 18,098 19,433 22,051 24,347 31,709 33,030 35,710 38,521 40,242 41,994 43,316 44,895 47,548 49,201 50,889 52,530 54,199 57,889 59,217Total Cargo Optimistic 161 265 14,348 21,207 25,218 27,545 34,555 38,490 44,253 45,910 54,091 57,172 62,199 64,127 66,242 68,280 72,430 74,095 77,061 79,038 81,047 83,096 85,103 87,141 89,646 91,335

Inbound Most Likely 93 111 3,789 8,128 9,269 9,778 13,738 15,907 17,786 20,356 21,037 24,840 27,386 28,378 29,531 30,612 31,710 32,560 34,599 35,632 36,681 37,753 38,798 39,861 41,192 42,049Inbound Conservative 93 111 3,144 6,105 6,566 7,111 10,396 10,992 11,772 13,180 14,430 18,784 19,555 20,984 22,560 23,560 24,579 25,348 26,266 27,725 28,685 29,666 30,619 31,589 33,866 34,640Inbound Optimistic 93 111 5,269 11,060 13,024 14,246 18,357 20,428 23,425 24,359 27,579 29,120 31,716 32,759 33,962 35,093 37,282 38,194 39,778 40,869 41,978 43,109 44,216 45,339 46,733 47,653

Outbound Most Likely 68 152 3,603 3,950 4,933 5,279 8,343 14,301 15,981 18,349 18,886 23,185 25,559 26,387 27,243 28,092 28,955 29,637 31,469 32,289 33,123 33,973 34,806 35,651 36,692 37,391Outbound Conservative 68 259 2,833 3,209 3,527 3,957 6,263 7,107 7,661 8,871 9,918 12,925 13,475 14,726 15,962 16,682 17,415 17,968 18,628 19,823 20,516 21,223 21,911 22,610 24,023 24,577Outbound Optimistic 68 154 9,080 10,147 12,195 13,299 16,199 18,062 20,828 21,551 26,512 28,052 30,483 31,368 32,281 33,187 35,148 35,900 37,283 38,169 39,069 39,987 40,888 41,802 42,913 43,682

International Most Likely 154 256 5,744 5,874 7,355 7,610 13,941 21,260 23,828 27,756 28,301 33,664 37,676 38,570 39,376 40,152 40,936 41,656 44,505 45,311 46,130 46,962 47,731 48,509 49,301 50,104International Conservative 154 363 4,329 4,550 4,767 5,019 9,988 10,825 11,188 12,629 14,241 20,233 20,680 22,466 24,122 24,723 25,333 25,877 26,468 28,110 28,734 29,369 29,938 30,514 32,142 32,750International Optimistic 154 258 12,701 14,161 17,580 19,213 25,603 28,721 33,482 34,119 40,786 41,835 45,943 46,933 47,835 48,707 51,669 52,509 53,401 54,307 55,228 56,163 57,037 57,921 58,820 59,731

Domestic Most Likely 7 7 1,647 6,204 6,847 7,448 8,141 8,948 9,939 10,949 11,622 14,361 15,269 16,196 17,398 18,552 19,728 20,541 21,563 22,610 23,675 24,765 25,873 27,003 28,583 29,336Domestic Conservative 7 7 1,647 4,763 5,326 6,048 6,671 7,273 8,245 9,422 10,107 11,477 12,350 13,243 14,400 15,519 16,662 17,440 18,427 19,439 20,467 21,521 22,593 23,685 25,747 26,468Domestic Optimistic 7 7 1,647 7,046 7,638 8,332 8,953 9,769 10,771 11,791 13,305 15,337 16,256 17,194 18,407 19,573 20,761 21,585 23,659 24,730 25,819 26,933 28,066 29,220 30,826 31,604

Scheduled Cargo Most Likely 7 7 11 151 216 222 2,388 2,604 2,639 3,997 4,086 4,134 5,509 5,577 5,640 5,705 5,770 5,839 5,905 5,976 6,044 6,117 6,186 6,256 6,755 6,404Scheduled Cargo Conservativ 7 7 11 11 11 155 1,749 1,770 1,795 2,003 2,100 3,789 3,833 3,881 3,926 3,971 4,016 4,065 4,111 4,162 4,209 4,261 4,310 4,359 4,836 4,463Scheduled Cargo Optimistic 7 7 11 214 217 306 3,030 4,580 4,639 4,694 5,454 5,519 6,910 6,994 7,074 7,155 7,236 7,322 7,404 7,492 7,577 7,668 7,755 7,843 8,359 8,027

Charter Cargo Most Likely 154 256 964 1,038 1,210 1,386 2,047 5,291 5,421 5,553 5,688 5,825 5,963 6,351 6,681 6,902 7,127 7,355 7,588 7,825 8,066 8,312 8,485 8,660 8,839 9,020Charter Cargo Conservative 154 363 589 767 935 1,139 1,316 1,950 2,040 2,163 2,257 2,353 2,451 2,809 3,080 3,260 3,443 3,630 3,821 4,015 4,214 4,416 4,545 4,675 4,809 4,944Charter Cargo Optimistic 154 258 4,088 4,199 7,493 7,749 8,609 8,851 9,047 9,223 9,402 9,583 9,765 10,197 10,571 10,837 11,106 11,379 11,657 11,940 12,228 12,521 12,742 12,965 13,193 13,424

Integrator Cargo Most Likely 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,102 1,114 1,127 1,140 1,153 1,166 1,179 1,192 1,206 1,219 1,233 1,247 1,261Integrator Cargo Conservative 0 0 0 0 0 0 0 0 0 0 0 0 0 1,076 1,089 1,101 1,114 1,126 1,139 1,152 1,165 1,178 1,191 1,205 1,219 1,232Integrator Cargo Optimistic 0 0 0 0 0 0 0 0 0 0 1,638 1,704 1,724 1,744 1,764 1,784 1,805 1,825 1,845 1,866 1,887 1,909 1,931 1,952 1,975 1,997

Trucked Cargo Most Likely 0 0 6,416 10,888 12,776 13,449 17,647 22,313 25,707 29,154 30,148 36,989 40,383 41,736 43,338 44,969 46,629 47,850 51,410 52,942 54,502 56,092 57,714 59,362 61,043 62,754Trucked Cargo Conservative 0 0 5,376 8,536 9,147 9,773 13,594 14,379 15,598 17,884 19,990 25,567 26,747 27,943 30,426 31,910 33,421 34,494 35,824 38,219 39,613 41,034 42,484 43,960 47,026 48,577Trucked Cargo Optimistic 0 0 10,249 16,794 17,509 19,490 22,916 25,060 30,567 31,993 37,596 40,366 43,799 45,192 46,833 48,505 52,284 53,569 56,154 57,739 59,354 60,998 62,676 64,380 66,119 67,887Outbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Optimistic ScenarioOutbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

Conservativ ScenarioOutbound 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034International Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%InboundInternational Scheduled Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.01%Domestic Scheduled Cargo 0.01% 0.01% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.03% 0.04% 0.04% 0.04% 0.04% 0.05% 0.05% 0.05% 0.50% 0.05%International Charter Cargo 0.25% 0.30% 0.40% 0.50% 0.75% 1.00% 1.25% 1.35% 1.45% 1.55% 1.65% 1.75% 1.85% 1.95% 2.10% 2.30% 2.50% 2.70% 2.90% 3.10% 3.30% 3.50% 3.60% 3.70% 3.80% 3.90%Domestic Charter Cargo 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%Domestic Integrator 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%International RFS (Trucking) 0.00% 0.00% 1.00% 1.00% 1.00% 1.00% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%Domestic RFS (Trucking) 0.00% 0.00% 0.50% 0.65% 0.80% 0.95% 1.10% 1.25% 1.50% 1.75% 1.90% 2.10% 2.30% 2.50% 2.75% 3.00% 3.25% 3.40% 3.60% 3.80% 4.00% 4.20% 4.40% 4.60% 4.80% 5.00%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Total Cargo Most Likely Total Cargo Conservative Total Cargo Optimistic

Mac

roM

icro

metric tons

Lufthansa Consulting Market Model

Three Air Cargo Forecast Scenarios


The three scenarios as shown above are specifically presented in detail in chapter 6.3 and Annex I (page 106).


23

4. Economic Environment

This chapter contains a basic survey of Canada’s economy. For the sake of the Forecast, the Relevant Air Cargo Market for Windsor International Airport has been determined to encompass the eight most important airports within a 350 km radius around YQG (compare Chapter 3.2). These airports are mostly situated in Ontario and Michigan, the two states which are also the most important in cross-border trading and traffic. Therefore Ontario’s and Michigan’s economy are described in detail. In addition the economic envi-ronment for Windsor-Essex County as a generator and recipient of air cargo for YQG is presented.

4.1 Economic characteristics of Canada

The following economic characteristics of Canada will be focused on: Gross Domestic Product Demographic structure Foreign Direct Investments (FDI) Figure 10: Map of Canada showing YQG

YQG

Source: The Atlas of Canada


24

4.1.1 Gross Domestic Product of Canada

Canada’s nominal Gross Domestic Product has grown constantly over the last ten years, but the increase has decelerated. In 2008 Canada had a no-minal Gross Domestic Product of CAD 1,600 bn. Figure 11 shows the devel-opment of Canada’s nominal GDP within the last ten years. Figure 11: Nominal GDP of Canada – 1998 to 2008

1,6001,5331,4491,3741,2911,2131,1531,1081,077982915Nominal GDP

bn CAD

20082007200620052004200320022001200019991998Year

1,6001,5331,4491,3741,2911,2131,1531,1081,077982915Nominal GDP

bn CAD

20082007200620052004200320022001200019991998Year

Source: Deutsche Bank Research (2009)

The nominal GDP growth decreased during the last nine years. But a fore-cast of Global Insight predicts an increase in 2009 that will last until 2011. The development of Canada’s nominal GDP is shown in the figure below.

Figure 12: Canada’s nominal GDP growth – 1999 to 2033

-4,00%

-3,00%

-2,00%

-1,00%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

-4,00%

-3,00%

-2,00%

-1,00%

0,00%

1,00%

2,00%

3,00%

4,00%

5,00%

6,00%

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

Source: Global Insight

In 2008, the industry sector (29.6%), the service sector (20.1%), the finance, insurance and real estate sector (20.1%) as well as the health care and so-cial assistance sector (6.5%) accounted for the major parts of Canada’s GDP (Figure 13).


25

Figure 13: Canada’s GDP structure – 2008

Goods producing industries

29%

Services producing industries

20%

Finance, insurance & Real Estate

20%

Health care and social assistance

7%

Others24%

Source: Statistics Canada

4.1.2 Demographic Structure of Canada

Canada has a population density of 3.3 people per square kilometer, which is one of the lowest population densities in the world. In 2001, most of Can-ada’s inhabitants lived near the border of the United States, as shown in Figure 14. Figure 14: Population density of Canada

Population Density by

Census Division

(persons / square

kilometre)

Less than 0.1

0.1 - 0.9

1 - 4.9

5 - 19.9

20 - 49.9

50.0 - 150

Greater than 150

Source: The Atlas of Canada (2009) Canada’s cities with the highest populations are Toronto (5,509.9 thousand inhabitants), Montréal (3,695.8 thousand inhabitants) and Vancouver


26

(2,285.9 thousand inhabitants). Windsor is Canada’s 14th largest city with 331.1 thousand inhabitants. Figure 15: Top 15 cities in Canada – 2009

337.4 BCVictoria15

331.1 ONTWindsor14

385.5 NSHalifax13

395.8 ONTSt. Catharines12

468.0 ONTKitchener11

469.7 ONTLondon10

712.7 MANWinnipeg 9

720.4 ONTHamilton8

728.9 QUEQuébec7

1,081.3 ALTAEdmonton6

1,139.1 ALTACalgary5

1,168.8 ONTOttawa4

2,285.9 BCVancouver3

3,695.8 QUEMontréal2

5,509.9 ONTToronto1

# of inhabitants (thousands )

Adm.Name

2.4

2.3

2.4

2.0

3.4

2.4

2.6

3.1

2.5

3.6

3.7

2.9

3.1

2.7

4.1

Real GDP Growth [%] 2010*-2013*

Source: Statistics Canada, *Forecast

4.1.3 Foreign Direct Investments of and in Canada

If a parent enterprise owns 10% or more (IMF definition) of an incorporated foreign affiliate this share is defined as Foreign Direct Investment (FDI) in the foreign country. Growing FDI is a positive indicator for dynamic globali-zation activities including an exchange of knowledge and technology. Coun-tries, regions or cities with high FDI are characterized by increased transpor-tation activities. Therefore a high FDI is an important indicator for a positive air cargo environment. Canada’s in and out flow FDI rose steadily (average growth inflow of USD 31.4 m, outflow USD 47.2 m) within the last five years. In 2007 a decrease in outgoing investments was recorded.


27

Figure 16: Development of Canada’s in and out flow FDI – 2004 to 2008

0,00

100,00

200,00

300,00

400,00

500,00

600,00

700,00

2004 2005 2006 2007 2008

Inflow

Outflow

US

$ m

illio

ns

0,00

100,00

200,00

300,00

400,00

500,00

600,00

700,00

2004 2005 2006 2007 2008

Inflow

Outflow

US

$ m

illio

ns


Dividing Canada’s FDI in industry sectors, it is visible that 34% of all invest-ments are made in the energy and metallic minerals industry (CAD 171,899 m in total). 18.7% are invested in the finance and insurance industry (CAD 94,506 m). Figure 17: FDI in Canada by industry – 2008

Services & Retailing Industry, 10.20%

All other industries, 24.2%

Finance & Insurance Industry, 18.7%

Wood & Paper Industry, 3.3%

Energy & Metallic Minerals Industry,

34.0%

Machinery & Transportation

Equipment Industry, 9.6%


The countries that were contributing the most FDI in Canada in 2008 are shown in Figure 18. The United States is with 57% the country with the most FDI in Canada.


28

Figure 18: FDI in Canada by geographical area – 2008

Rest of the world13%

United States57%

United Kingdom11%

Other European countries

16%

Japan3%

Source: Statistics Canada Dividing Canadian FDI by industry sectors, a remarkable 49.9% was in-vested in the finance and insurance industry in 2008 whereas in comparison just 18.7% was invested from foreign countries in the Canadian finance and insurance sector. This leads to a difference of CAD 223,573 m. Figure 19: Canadian FDI abroad by industry – 2008

Services & Retailing Industry, 10,90%

All other industries, 10,8%

Finance & Insurance Industry, 49,9%

Wood & Paper Industry, 2,0%

Energy & Metallic Minerals Industry,

22,7%

Machinery & Transportation

Equipment Industry, 3,7%

Source: Statistics Canada In 2008, the most important country for outward FDI from Canada was the USA (FDI of USD 310,708 m). Canada invested USD 637,281 m in total in the U.S.


29

Figure 20: Canadian FDI abroad by geographical area – 2008

Rest of the world29.28%

United States48.76%

United Kingdom8.49%

Other European countries

12.99%Japan0.48%



30

4.2 Economical characteristics of Ontario

Ontario is Canada’s second largest province, covering the area of more than one million square kilometers. Windsor is located in the South of Ontario, close to Ontario’s large lakes and rivers. The lakes and rivers hold about one third of the world’s fresh water, therefore Ontario is considered as the Land of Water. Figure 21: Map of Ontario

YQG

Source: The Atlas of Canada

Figure 22: Ontario and its geographical regions Land and Freshwater Area (in sqkm) Land 917,714 Freshwater 158,654 Total area 1,076,395 Total land in census farms (%) 5.9 Source: Office of Economic Policy, Ontario Ministry of Finance

4.2.1 Gross Domestic Product of Ontario

The GDP indicator, as the basic consolidated indicator extending the charac-teristics of economic operation for a defined period, predicts the correlation of data for all branches and sectors of the economy. Ontario had a GDP of CAD 494,156 m in 2008, of which 26.5 % were goods and 73.5 % were services.


31

Figure 23: GDP structure of Ontario – 2008

Other Services21%

Manufacturing17%

Wholesale & Retail Trade12%

Health & Education11%

Utilities3%

Transportation & Warehousing

4%

Construction5%

Information & Cultural

4%Finance, Insurance

and Real Estate23%

Source: Ministry of Finance Ontario’s Real GDP grew continuously during the last three years. The Con-ference Board of Canada forecasted an even higher growth for the next four years up to a Real GDP of CAD 569,356 m. Figure 24: Ontario’s Real GDP – 2006 to 2013

440,000

460,000

480,000

500,000

520,000

540,000

560,000

580,000

2006 2007 2008 2009* 2010* 2011* 2012* 2013*

440,000

460,000

480,000

500,000

520,000

540,000

560,000

580,000

2006 2007 2008 2009* 2010* 2011* 2012* 2013*

m CAD

Source: The Conference Board of Canada, *Forecast

4.2.2 Trade and Infrastructure of Ontario

The following topics are described in detail in this chapter: Export Activities of Ontario Import Activities of Ontario Infrastructure


32

Export Activities of Ontario The value of Ontario’s exports in 2008 amounted to CAD 329,388 m, which included international and interprovincial trade. The following figure shows the five largest international export markets and the five most exported types of goods from Ontario in 2008. With a share of 81.7% the USA is Ontario’s largest export market. Figure 25: Top international export markets of Ontario – 2008

United States81% Rest of the world

10%

United Kingdom5%

Norway2%

China1%

Mexico1%

Source: Ontario Ministry of Finance Motor vehicles and parts are the main products being exported by Ontario with 35.7%, followed by mechanical equipment (10.6%) and electrical ma-chinery (5.3%). These figures reflect the total exports from Ontario that are not related to specific countries. The total value of Ontario’s exports is CAD 336,850 m. Ontario exported CAD 121,266 m of motor vehicles and parts, CAD 37,054 m of mechanical equipment and CAD 16,843 m of electrical machinery. Figure 26: Top international exports of Ontario – 2008

Mechanical equipment

11%

Others43%

Plastic Products4%

Precious Metals & Stones

7%

Electrical machinery6%

Motor vehicles & parts29%

Source: Ontario Ministry of Finance


33

In the first quarter of 2009 Ontario exported goods and services with a value of CAD 282,972 m of which CAD 176,650 m (62.4%) were international and CAD 106,322 m (37.6%) were interprovincial. Import Activities of Ontario The value of Ontario’s imports in 2008 amounted to CAD 325,971 m. Ontar-io’s most important import market is the United States of America with 61%, followed by China with 9.3%. Figure 27: Top international import markets of Ontario – 2008

United States61%

China9%

Mexico6%

Japan4%

Germany2%



Most imported parts are motor vehicles and parts (22.2%) with a value of CAD 72,366 m, followed by mechanical equipment (16.1%) with a value of CAD 52,481 m and electrical machinery (11.3%) with a value of CAD 36,835 m. These figures reflect total international imports and are not related to specific countries. Figure 28: Top international imports to Ontario – 2008

Mechanical equipment

16%

Others45%

Oils & other petroleum products

4%

Electrical machinery12%

Plastic Products4%

Motor vehicles & parts19%



34

In the first quarter of 2009 Ontario imported goods and services with a value of CAD 282,343 m, 12.6% less compared to the first quarter in 2008. Infrastructure Ontario provides a multifaceted infrastructure since its lakes and rivers have historically provided natural travel and trade routes. Additionally canals were built to link certain lakes and rivers. On the landside, railways are largely responsible for opening up northern Ontario and are very important for both passenger and freight services. Ontario provides more than 16,500 centerline kilometers of provincial high-ways. Highway 401 for example stretches 820 kilometers from Windsor to the Quebec border and is one of the busiest roads in the world with an esti-mated Annual Average Daily Traffic (AADT) of over 500,000 vehicles in 2006 between the Weston Road and Highway 400 interchanges in Toronto. For many industries the Ambassador Bridge – carrying nearly a quarter of Canada-US Trade in 2008 – is the main conduit between the United States (Detroit) and Canada (Windsor). It is the busiest commercial vehicle border crossing in North America. The Detroit River International Crossing (DRIC) initiative has announced the construction of a new international crossing between Windsor and Detroit for redundancy and additional capacity for commercial vehicle traffic.


35

4.2.3 Demographics of Ontario

Ontario’s population reached almost 13 m in July 2008, which was 38.8% of Canada’s population. The population density per square kilometer was 13.4. There was a population increase of 6.6% during 2001 and 2006. Most people living in Ontario are aged between 25 and 44 (29%), followed by people aged between 45 and 64 (27%). Figure 29: Age distribution of Ontario in 2008

25 to 4429%

45 to 6427%

15 to 2414%

65 +13%

0 to 1417%

Source: Ontario Ministry of Finance 61,810 people immigrated to Canada in 2008. 45% of them (27,815) immi-grated to Ontario. Ontario is followed by Quebec and British Columbia (each 18%) as a popular place for immigration. Figure 30: Immigration to Canada in 2008

Ontario45%

Quebec18%

Alberta10%

Rest of Canada9%

British Columbia18%

Source: Based on Ontario Ministry of Finance


36

4.2.4 Perishable Air Cargo and Ontario’s Perishable Trade

The impact of perishable cargo on the study has been adapted within the running project. Initially it was planned to focus the study on perishable car-go. Following intense interview sessions with industry leaders from the greenhouse and farming industry Windsor International Airport and Lufthan-sa Consulting decided to give the study a broader scope and develop the air cargo market potential and forecast focusing on all cargo types (general as well as special cargo such as perishables). However the figures for Ontario’s perishable trade discussed in this chapter have been considered in the air cargo forecast. The International Air Transport Association (IATA) defines perishable cargo as follows: “Goods which loose their inherent properties or essential quality performance when not maintained within certain conditions, elements or other criteria as defined by their life cycle”. The figure below shows an over-view of the different types of Perishables. Figure 31: Types of Perishable Air Cargo (PER)

Fruits and Vegetables

Fresh-Cuts & Prepared Salads

Seafood and Fish

Meat and Meat Products

Dairy Products

Bakery

Frozen Food

Ornamentals (Cut-Flowers etc.)

Pharmaceutical Products

Others (Spices, Confectionary, Cosmetics)

Source: IATA Perishable Cargo Regulations

Most of Ontario’s products falling under this definition of Perishables are produced in the agriculture and food industry. The trade within this industry grew on average by 5.1% per year between 1999 and 2008. Import com-modities accounted for 66% in 2008 while export commodities only represented 34% of Ontario’s total agri-food trade.


37

Figure 32: Ontario Agri-Food Trade Development (bn CAD)

0

5

10

15

20

25

30

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Average annual growth (AAG): 5.1%

AAG: 5.8%

AAG: 4.0%

Import Export Total

66%

34%

Total Trade 2008: CAD 25.784 bn

0

5

10

15

20

25

30

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


AAG: 5.8%

AAG: 4.0%

ImportImport ExportExport TotalTotal

66%

34%



Source: Ontario Ministry of Agriculture Food & Rural Affairs

Ontario’s most important agri-food trade partner in 2008 was the USA (71.4% of agri-food trade) followed by the European Union (7.9% of agri-food trade), Asia (excluding Japan, 7.5% of agri-food trade) and Latin Amer-ica (excluding Mexico, 4.6% of agri-food trade). Figure 33 gives a detailed overview of the imported and exported trade shares for Ontario’s trade part-ners in 2008. Figure 33: Ontario Agri-Food Trade by Region – 2008

0,4%

71,4%

1,6%7,5%

2,7%

4,6%

7,9%0,3%

1,0%1,1%

1,0%

0,6%

United States

Mexico

Latin America (excl. Mexico)

Caribbean

EU-27

Other West Europe

Other East Europe

Middle East

Africa

Japan

Asia (excl. Japan)

Oceania

Total Agri-Food Trade 2008:

CAD 25.784 bn

78,9%

0,5%

0,6%7,5%

1,4%

0,4%

4,9%

0,0%

0,5%2,6%

1,5%1,1%

67,1%

0,4%

2,2%7,4%

3,5%

6,9%

9,6%

0,4%

1,3%

0,2%

0,8%0,3%

Export Agri-Food Trade 2008:

CAD 9.323 bnImport Agri-Food Trade 2008:

CAD 16.461 bn


Not all agri-food products can be transported by air. Figure 34 shows Ontar-io’s agri-food trade (in m CAD) divided by commodity groups for 2008. The commodity groups that are marked include the products that meet the IATA definition for Perishable Cargo.


38

Figure 34: Ontario’s agri-food trade per commodity group – 2008

0 500 1000 1500 2000 2500 3000 3500 4000

Vegetable fibres

Tobacco and products

Other agri-food products

Seeds for sowing

Floriculture and nursery products

Dairy products

Live animals

Grains

Poultry and eggs

Oilseeds

Other animal products

Fish and products

Animal feeds

Oilseed products

Sugar and confectionery

Tropical products (excl. fruit)

Red meats

Beverages

Other edible preparations

Vegetables

Fruit and nuts

Grain products

Import Trade OntarioImport Trade Ontario

Export Trade OntarioExport Trade Ontario

Total Trade Ontario

Commodity groups that meet the IATA definition for Perishable Cargo

Commodity Groups

CAD in mCAD in m


The marked commodity groups have been further analyzed regarding their trade development over the last eight years as shown below. Figure 35: Ontario’s agri-food trade per commodity group – 2008

0

500

1,000

1,500

2,000

2,500

3,000

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD VegetablesTrade in m CADTrade in m CAD VegetablesVegetables

0

500

1,000

1,500

2,000

2,500

3,000

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Fruits and NutsTrade in m CADTrade in m CAD Fruits and NutsFruits and Nuts

Import Trade OntarioImport Trade Ontario Export Trade OntarioExport Trade Ontario Total Trade OntarioTotal Trade Ontario

0

100

200

300

400

500

600

700

800

900

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Fish and ProductsTrade in m CADTrade in m CAD Fish and ProductsFish and Products

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Poultry and eggsTrade in m CADTrade in m CAD Poultry and eggsPoultry and eggs

0

100

200

300

400

500

600

700

800

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Dairy productsTrade in m CADTrade in m CAD Dairy productsDairy products


AAG: 3.7%

AAG: 4.9%

AAG: 5.9%

AAG: 5.9%

AAG: 5.0%

AAG: 1.1%

AAG: 2.5%

AAG: -7.4%

AAG: 3.3%

AAG: 3.8%

AAG: 2.1%

AAG: -1.7%

AAG: -0.5%

AAG: -3.5%

0

500

1,000

1,500

2,000

2,500

2001 2002 2003 2004 2005 2006 2007 2008

Trade in m CAD Red MeatTrade in m CADTrade in m CAD Red MeatRed Meat

AAG: 4.4%

AAG: 9.9%

AAG: 0.2%



39

The shown figures on Ontario’s perishable trade include products produced on farms and in greenhouses. Figure 36: Farm Statistics 2006

Item OntarioNumber of farm operators 82,410Total number of farms 57,211Number of farms with sales over CAD 25,000 31,883Number of farms with sales over CAD 100,000 17,965Number of farms with sales over CAD 250,000 10,000Farms reporting under 53 hectares 29,710Farms reporting 53 to 161 hectares 18,648Farms reporting 162 hectares and over 8,853 Source: Ontario Ministry of Agriculture Food & Rural Affairs

To put an emphasis on Ontario’s exceptional greenhouse industry the follow-ing paragraphs line out major facts and characteristics. Ontario’s strong greenhouse industry is a very significant part of Ontario’s provincial economy. A study commissioned by the Ontario Greenhouse Al-liance in 2005 evaluated an impact of the greenhouse industry of CAD 3.8 bn on Ontario’s economy in 2004 (CAD 1.1 bn in gross sales, CAD 2.7 bn additional industrial output and CAD 706 m in income). In 2003, the major portion of the Canadian floricultural production (52%) was situated in Ontario. More than half of Canada’s total greenhouse production acreage (51%) was located in Ontario. Ontario belongs to the largest producers of greenhouse products in North America. With respect to vegetable production, Ontario has the largest con-centration of greenhouse vegetable production in North America (approx-imately 355 hectares around the town of Leamington). It is larger than the entire corresponding United States industry.

4.2.5 A closer look at the economy of Windsor

Windsor’s GDP fell during the last two years. Among other reasons this was caused by the suffering automotive-industry. However starting in 2010, The Conference Board of Canada has forecasted a moderate GDP growth for Windsor of 2.2% up to an amount of CAD 12,653 m.


40

Figure 37: Windor’s Real GDP growth – 2006 to 2013

10,800

11,000

11,200

11,400

11,600

11,800

12,000

12,200

12,400

12,600

12,800

2006 2007 2008 2009* 2010* 2011* 2012* 2013*

10,800

11,000

11,200

11,400

11,600

11,800

12,000

12,200

12,400

12,600

12,800

2006 2007 2008 2009* 2010* 2011* 2012* 2013*

m CAD

Source: The Conference Board of Canada, *Forecast

An industry outlook for Windsor shows a high negative growth rate for the industrial sector of -3.7% in 2009. Total industry has a decline of -0.6% but all other industry sectors are still growing. The growth forecast for 2010 to 2013 is positive. Figure 38: Industry Growth Rate Forecast for Windsor – 2009 to 2013

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Non-com.Service

W&R Trade Transportation& Com.

Office Industrial Total

2009 2010-2013

Source: The Conference Board of Canada

Windsor’s greatest industry is the manufacturing industry which provides 29.6% (CAD 3437 million) of Windsor’s total GDP, followed by Commercial (14.6%) and Non-Commercial Services (13.2%).


41

Figure 39: Windsor’s regional GDP by sector – 2008

Non-Commercial Services, 13,17%

Wholesale & Retail trade, 10,05%

Others, 14,78%

Manufacturing, 29,59%

Finance, Insurance & Real Estate, 17,85%

Commercial Service, 14,56%

Source: The Conference Board of Canada


42

4.3 Economic characteristics of Michigan, USA

Michigan is a mid-western state of the United States of America, which is named after Lake Michigan. Michigan is the eighth most populous state in the United States. In the map below the location of Michigan is shown in respect to Canada. Figure 40: Map of Michigan

YQG

Windsor

Source: The National Atlas of the United States of America

4.3.1 Gross Domestic Product of Michigan

The Government of Michigan reported a GDP of USD 382,544 m in 2008 and is therefore ranked number 12 compared to other U.S. States as shown in the figure below.


43

Figure 41: USA’s GDP structure per region - 2008

248,603Colorado20

248,888Arizona19

252,127Tennessee18

254,861Indiana17

262,847Minnesota16

273,333Maryland15

322,778Washington14

364,988Massachusetts13

382,544Michigan12

397,025Virginia11

397,756Georgia10

400,192North Carolina9

471,508Ohio8

474,936New Jersey7

553,301Pennsylvania6

633,697Illinois5

744,120Florida4

1,144,481New York3

1,223,511Texas2

1,846,757California1

GDP in Million USDStateRank

248,603Colorado20

248,888Arizona19

252,127Tennessee18

254,861Indiana17

262,847Minnesota16

273,333Maryland15

322,778Washington14

364,988Massachusetts13

382,544Michigan12

397,025Virginia11

397,756Georgia10

400,192North Carolina9

471,508Ohio8

474,936New Jersey7

553,301Pennsylvania6

633,697Illinois5

744,120Florida4

1,144,481New York3

1,223,511Texas2

1,846,757California1

GDP in Million USDStateRank

Source: Bureau of Economic Analysis

Michigan’s greatest industries are Manufacturing, Government, Finance & Insurance and Services as shown in the figure below. Figure 42: GDP structure Michigan – 2008

Manufacturing21%

Retail trade6%

Construction5%

Wholesale trade5%

Others23%

Finance & insurance

5%

Government15%

Health care & social assistance

10%

Services10%

Source: Government of Michigan


44

4.3.2 Trade and Automotive Industry of Michigan

The following topics are described further in this chapter: Export Activities Import Activities Automotive industry Export activities The figure below shows Michigan’s greatest export partners. Michigan has a total export volume of USD 98.2 bn. In comparison to Ontario, which exports 91% to the USA, Michigan exports 89% to Canada. Figure 43: Top international export markets from Michigan – 2008

Canada89% Germany

2%

Belgium2%

France1%

United Kingdom2%

Others4%

Source: US Census Bureau

A remarkable 26.9% of Michigan’s export activities were motor vehicle parts in 2008. 14.4% were motor vehicles. Figure 44: Michigan’s Exports by industry parts - 2008

Other Parts, 48.5%

Civilian Aircraft Engines, 1.2%

Silicon Parts, 2.3%

Passenger vehicles, 14.4%

Motor vehicles parts, 26.9%

Natural Gas & Oil, 6.7%

Source: U.S. Census Bureau


45

Import Activities The North American automotive industry, concentrated in Ontario and Michi-gan, ensures that there are a multitude of opportunities for cross-border investment, and a strong economic partnership between Canada and Michi-gan. As a result, interdependence between Canada and Michigan has de-veloped to the extent that Michigan’s imports from Canada are equal to the value of goods Canada exports to the rest of the world outside the United States. Michigan’s total imports from Canada are worth USD 48.7 bn. Most import goods are from the transportation sector (79.7% of total im-ports), split up into automobiles (50.4%), trucks (15%) and motor vehicle parts (9%). Figure 45: Top imports from Canada to Michigan – 2004

Transportation79%

Chemicals2%

Equipment2%

Agriculture1%Others

3%

Machinery2%

Forest products3%

Energy4%

Metals4%

Source: Canada International

Figure 46: Transportation imports from Canada to Michigan – 2004

Automobiles50%

Trucks15%

Motor vehicle parts9%

Motor vehicle engines & parts

4%

Natural gas3%

Others19%

Source: Canada International


46

Automotive Industry The automotive industry is the major industry of Michigan, which is the lead-ing auto producing state in the U.S. But the high speculative price of oil be-came a factor for the U.S. auto industry even before the economic crisis of 2008 began seriously impacting industry revenues. The following chart shows the continuous rise of the oil price in Michigan since January 2007. Figure 47: Oil price development Michigan – Jan. 2005 to Jul. 2008

Source: ICIS Pricing

4.3.3 Demographics of Michigan

In 2008, Michigan had a population of approximately 10 m which represents 32% of United State’s population. The population density is very high with 175 persons per square mile, compared to the United States in total with a population density of 79.6 persons per square mile. In Michigan most inhabitants are aged between 19 and 64, hence 57% of inhabitants are of working age.


47

Figure 48: Age distribution in Michigan – 2008

0 to 56%

6 to 1824%

19 to 6457%

65 +13%


31% of Michigan’s inhabitants work in management or as professionals. 26% are employed in the sales and office sector and just 5% work in con-struction and maintenance. Figure 49: Michigan main occupations – 2008

Management & professional

31%

Service occupations

15%

Sales and office occupations

26%

Construction & maintenance

9%

Production & transportation

19%



48

4.4 Canadian Trade Development

The Trade Development of Canada is generally positive. Canada holds ex-cellent relations to Europe and the Asian countries. All kind of goods are exchanged in both directions – import and export. Caused by the proximity to the U.S. this is Canada’s main trading focus and most important trading market. In 2006 more than CAD 1.7 bn worth of goods and services and more than 300,000 people crossed the Canada-U.S. border each day includ-ing land and air crossings. It was estimated that approximately 7.1 m U.S. jobs were supported by trade with Canada in 2005. Canada’s total imports grew on average 17.5% in the last five years, exports grew on average 15.7%. The figure below shows the trade development of Canadian import and ex-port activities in the years 2005 to 2008. In the past Canada’s export activi-ties have been higher than its import activities. Figure 50: Historic Trade Development in Canada – 2005 to 2008

0,00

100,00

200,00

300,00

400,00

500,00

600,00

2005 2006 2007 2008

Export

Import

Ca

nad

ian

$ m

illio

ns

Source: Foreign Affairs and International Trade Canada

Canada’s total imports grew 22% between 2004 and 2008. When divided into industry sectors, the energy products sector had the highest growth (114.2%) starting with a value of CAD 24,781.7 m in 2004 up to a value of CAD 53,071.9 m in 2008.


49

Figure 51: Canadian import growth by industry sector – 2004 to 2008

33,2%

114,2%

24,6%17,8% 20,5%

-9,5% -7,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

Agr

icul

tura

l &F

ishi

ngP

rodu

cts

Ene

rgy

Pro

duct

s

For

estr

yP

rodu

cts

Indu

stria

l Goo

ds&

Mat

eria

ls

Mac

hine

ry &

Equ

ipm

ent

Aut

omot

ive

Pro

duct

s

Oth

er G

oods


Canada’s total exports grew by 14.2% between 2004 and 2008. Regarding the industry sectors, exports of forestry products and exports of automotive products declined by -34.9% and -32.4% respectively. Figure 52: Canadian export growth by industry sector – 2004 to 2008

33,2%

84,7%

43,0%

2,1% 5,2%-34,9% -32,4%

-60,0%

-40,0%

-20,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

Agr

icul

tura

l &F

ishi

ngP

rodu

cts

Ene

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Pro

duct

s

For

estr

yP

rodu

cts

Indu

stria

l Goo

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Mat

eria

ls

Mac

hine

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Equ

ipm

ent

Aut

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ive

Pro

duct

s

Oth

er G

oods



50

Canada’s exports to the United Kingdom had the highest increase between 2003 and 2008 (84.6%), starting with an export value of CAD 7,695.3 m up to a value of CAD 14,206.9 m. Figure 53: Canadian export growth by country – 2003 to 2008

12,4%

21,1%

54,6%

65,3%

84,6%

102,0%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

US

A

Japa

n

Uni

ted

Kin

gdom

Oth

er E

UC

ount

ries

Oth

er O

EC

DC

ount

ries

Oth

er C

ount

ries


In comparison to the export, Canada’s imports from the United Kingdom increased by 23.3%, starting with a value of CAD 9,183 m in 2003 reaching a value of CAD 11,321.2 m in 2008.


51

Figure 54: Canadian import growth by country – 2003 to 2008

16,8%9,6%

36,1% 39,1%

23,3%

107,6%

0,0%

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

US

A

Japa

n

Uni

ted

Kin

gdom

Oth

er E

UC

ount

ries

Oth

er O

EC

DC

ount

ries

Oth

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ount

ries


4.4.1 Canada’s Trade Partners

In 2008, 77.7% of Canadian merchandise exports were destined to the U.S., and 52.4% of Canada’s imports of merchandise came from the U.S. The U.S. exported more goods and services to Canada than to any individu-al country - more than to Japan and Mexico combined in 2008. The figure below shows Canada’s major export markets. As stated above, the USA is Canada’s most important trading partner with exports of CAD 375,492 m in 2008. Figure 55: Canada’s major Export Trading Partners – 2008

USA78%

UK3%

Japan2%

China2%

Mexico1%




52

In 2008 Canada imported goods with the value of CAD 433,431 m. The USA is also Canada’s major import partner with a share of 52.4%, followed by China with 9.8%. Figure 56: Canada’s major Import Trading Partners – 2008

USA52%

China10%

Mexico4%

Japan4%

Germany3%



4.4.2 Key Export / Import Commodities

Canada’s top merchandise exports to the US include mineral fuels and oils (27.6%), motor vehicles (11.1%), machinery (7.6%), electrical and electronic equipment (4%) and precious stones & metals. In the figure below the development over the last four years is listed. Figure 57: Leading exports in million CAD – 2005 to 2008

Commodity 2005 2006 2007 2008

Mineral fuel & oils 88,08 87,874 93,839 133,4

Motor vehicles & parts 78,364 73,521 68,558 53,796

Machinery 33,745 33,949 35,992 36,607

El. Machinery / equipment

20,524 21,013 20,411 19,142

Prec. Stones & metals 7,379 9,058 10,135 13,962


The top imports are machinery (14.7%), motor vehicles (14.6%), mineral fuels and oils (12.4%), electrical and electronic equipment (9.8%) and plastic (3.2%).


53

Figure 58: Leading imports in million CAD – 2005 to 2008

Commodity 2005 2006 2007 2008

Machinery 62,305 63,694 62,545 63,543

Motor vehicles & parts 65,771 67,836 68,735 63,252

Mineral fuel & oils 34,999 36,262 37,875 53,782

El. Machinery / equipment

37,515 38,988 40,573 42,41

Plastic 13,668 13,877 13,488 14,073


4.4.3 Agreements impacting trade crossing the border (CA-USA)

and Air Cargo Security

Canada has bilateral relations with several countries around the world. Since the USA is Canada’s most important trading partner this chapter puts an emphasis on the trade agreements and policies between Canada and the USA. Furthermore Canadian air cargo security initiatives are described. Since Canada and the USA share a common border that stretches across 8,893 kilometers of land and three oceans, they are each other’s most im-portant trading partners. Canada and the US developed several programs, especially with the aim to ease and accelerate customs procedures at the border and to increase se-curity. The following four programs are of high importance: C-TPAT (Customs Trade Partnership Against Terrorism) by US Customs

and Border Patrol (US CBP) FAST is a program where the identity of a driver is put on a card (FAST

card). FAST is a US Program PIP (Partners in Protection) is a Canadian program CSA (Customs Self Assessment) in Canada Partnership for a smart border An important agreement between Canada and the USA is the partnership for a smart border. With about CAD 1.7 bn in goods and services crossing the Canada-U.S. border each day, secure and efficient border crossings are the life line of the mutual economic growth and prosperity. Canada's investments in secure and efficient border management in coop-eration with the U.S. demonstrate the common values and interests.


54

There are more trade flows between Windsor, Ontario and Detroit, Michigan than through any other border crossing in the world. Trucks carry approx-imately 80% of Canada's trade with the U.S. – one truck crosses the Cana-da-U.S. border almost every two seconds. Canada and the United States are actively engaged in implementing the 32-point Smart Border Action Plan. Since the signing of the Smart Border Declaration and Action Plan in De-cember 2001, significant progress has been made to enhance the security and efficiency of their shared border. Several Smart Border initiatives are underway, including the expansion of NEXUS (dedicated "fast lanes" for pre-approved and low-risk travelers) and FAST (expedited clearance processes for pre-authorized shipments) pro-grams, the establishment of joint teams of customs officials in the ports of Vancouver, Montreal, Halifax, Seattle-Tacoma and Newark to target marine containers arriving from abroad that are destined for the other country and the expansion of Integrated Border Enforcement Teams (IBETs) from coast to coast along the Canada-U.S. border. Air Cargo Security Initiatives in Canada Transport Canada has launched the Air Cargo Security (ACS) Initiative to improve security along the supply chain. ACS includes a so-called “two-pronged approach” that mainly focuses security improvement projects in two fields of activity: Supply Chain Security Air Cargo Screening To improve supply chain security all participating freight forwarders, shippers and air carriers have to register in Canada's Secure Supply Chain Manage-ment System (SSCMS) that is similar to European regulated agent or U.S. known shipper principles. The interoperability of SSCMS with these pro-grams and others, such as partners in protection (PIP), is tested. The air cargo screening efforts focus the use of the right technology in the respective environments. Intrusive and non-intrusive technologies such as x-ray, trace detection and canine are tested in different environments to estab-lish a matrix with appropriate screening models for various industry mem-bers. ACS basically improves both aviation and business security along the supply chain. Aviation security aims to prevent unlawful interference in the air transport system as this generally has a great impact on people and assets: 95% of the threats in this area, such as hijacking or bomb attacks, are fo-cused on the flight itself and not on facilities or security personnel. Aviation security is highly regulated by ICAO and national authorities that are not globally harmonized and are developing continuously.


55

Business security focuses mainly on preventing unlawful interference with the business of one’s own company or related parties such as clients or business partners to prevent threats such as theft or pilferage. Business security is greatly influenced by industry requirements (e. g. on the part of business partners or industry standards) and is very dependent on identified unacceptable risks.


56

4.5 Canada’s Transport System and Trade by Mode of Transpor-tation

The present chapter gives an overview on the trade per mode of transporta-tion. Moreover facts and figures on the different transport modes that build the Canadian transportation system are explained. The Canadian transportation system includes nearly 900,000 km of road; 2,452 aerodromes, 72,245 km of operating railroad tracks, and more than 300 commercial ports and harbors. A comparison of the international trade value development by transportation mode shows that road transportation plays the dominant role. Water trans-port became more important compared to air and rail transportation since 2002. A heavy decline in sea freight costs, enhanced sea freight services (e.g. time-defined sea freight) and reliability in delivery are some of the rea-sons for this development. Figure 59: Canadian International Trade Value (of goods) by Transpor-tation Mode

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

19

90

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

Air - Total Trade

Water - Total Trade

Road - Total Trade

Rail - Total Trade

m USD

Source: North American Transportation Statistics Database (2009)

The majority of domestic freight tonnage within Canada is transported on the road. In 2005 67.8% of the total domestic tonnage was trucked, followed by rail transportation – accounting for 29.9% – and water transportation ac-counting for 2.3% of the total freight tonnage. Air cargo accounted for only 0.1% of the total domestic tonnage in 2005.


57

Figure 60: Domestic Freight within Canada by Mode – 2005 (thousand of metric tons)

Road, 518500

Rail, 228700

Water*, 17400Air, 500

Source: North American Transportation Statistics Database (2009), * Inland Water-

ways only

According to Transport Canada the GDP at basic prices for the transport sector in 2008 was at a level of CAD 50,571 m. That is a 0.9% increase compared to 2007. Compared to the previous years this growth is not signifi-cant as between 2002 and 2007 an annual GDP growth of 3.0% was re-ported. The total employment within the transport sector for 2008 is esti-mated at 897.1 thousand employees. The following chapters include a brief overview about the different modes of transportation within the Canadian Transport System and the respective trade per mode of transportation.

4.5.1 Canadian Air Transportation & Trade

Statistics Canada reported a GDP for the air transport industry of CAD 4.9 bn in 2006. An increase of 4.4% in enplaned/deplaned passengers from 2006 to 2007 led to a total number of 106.1 m passengers in 2007. Ontario accounted for the highest share with 34.7% of all deplaned and enplaned passengers in 2007. Canada’s civil air navigation provider NAV CANADA reported 4.9 m aircraft take-offs and landings in 2007. This is an increase of 8% compared to 2006 (4.5 m). Regarding air cargo a comparison of transport costs between air and road for Canada and the US shows that air cargo transportation in Canada costs 63% more than in the US, whereas road transportation in Canada costs only one third of the amount in the US. Air transport in the US costs nearly six times as much as road transport. In Canada air transport costs more than 27 times as much as road transport.


58

After the recession in 2001/2002 the Canadian air cargo trade caught up and reached a value (exported/imported goods) of CAD 100,831 m in 2008. The average annual growth rate from 1998 to 2008 was 5.33%. Exported goods accounted for 43% of the total value and imported goods for 57%. Figure 61: Int. goods shipped by air to/from Canada – ’98 to ‘08

0

20,000

40,000

60,000

80,000

100,000

120,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

m CAD

Air Trade ImportAir Trade Import Air Trade ExportAir Trade Export Total Air TradeTotal Air Trade Source: Transport Canada, Lufthansa Consulting Analysis

Regarding the total trade the U.S. plays a very dominant role for Canada as discussed in chapter 4.4.1 (see Figure 55 and Figure 56). Viewing Canadian air trades broken down on world regions this picture does not change totally but the shares are far more balanced compared to the total Canadian trade (Figure 62). Western Europe accounted for 39% of imported and exported goods by air in 2008 followed by the U.S. (35%) and Asia (11%). The air trade export value grew by 6.4% while imported air trade increased by 3.4% between 2007 and 2008. Imported air trade 2008 came mainly from the U.S. (31%), Western Europe (29%) and Asia (25%).


59

Figure 62: Canadian Air Imports/Exports by world region – 2007 to 2008

39%

36%

11%

5%

9%

United States

Western Europe

Asia

Latin America

Other

35%

39%

11%

6%

9%

EXPORT 2007: Value of Air Cargo goods CAD 40,761 m



EXPORT 2008: Value of Air Cargo goods CAD 43,357 m+6.4%

32%

29%

25%

8%

6%

United States

Western Europe

Asia

Latin America

Other

31%

29%

25%

8%

7%

32%

29%

25%

8%

6%

United States

Western Europe

Asia

Latin America

Other

31%

29%

25%

8%

7%

IMPORT 2007: Value of Air Cargo goods CAD 55,599 m





IMPORT 2008: Value of Air Cargo goods CAD 57,474 m+3.4%

Source: Transport Canada, Lufthansa Consulting Analysis

Canada’s top 25 air trade partners accounted for 89.9% of the total air trade value in 2008. The top three air trade partners were the U.S, the UK and China. 73% of air trade between Canada and the UK originated in Canada and was exported to the UK. 86% of air trade values between Canada and China were imported from China to Canada. Figure 63: Top 25 Canadian Air Trade Partners – 2008

0 5 10 15 20 25 30 35

SpainAustralia Thailand

Hong Kong Netherlands

Sweden Israel

Singapore Taiwan

Malaysia India

Canada*Peru Italy

Ireland Belgium

Korea, South Japan

Switzerland Mexico France

Germany China, Peoples Republic

United Kingdom United States

Air Trade ImportAir Trade Import

Air Trade ExportAir Trade Export

Total Air Trade

bn CADbn CAD

* Imports from Canada to Canada are goods that were produced in Canada, exported to another country, and returned to Canada for any number of reasons (e.g. wrong size, wrong colour, did not sell, …)* Imports from Canada to Canada are goods that were produced in Canada, exported to another country, and returned to Canada for any number of reasons (e.g. wrong size, wrong colour, did not sell, …)



60

The main commodity groups transported by air (measured by value of goods) are shown in Figure 64. Machinery & electrical equipment exports decreased from 2007 (36%) to 2008 (32%). Only 2% of exported and 1% of imported values were generated by agriculture and food products in 2008. Figure 64: Canadian Air Imports and Exports by commodity groups 2007-2008

36%

36%

22%

2% 1%0%1%

2%

Other manufactured andmiscellaneous goods

Machinery and electricalequipment

Aircrafts and othertransport equipment

Plastics and chemicalproducts

Base metals and articlesof base metal

Agricultural and foodproducts

Waste and scrap

Other

42%

32%

18%

2% 2%2%

2%

0%

EXPORT 2007: Value of Air Cargo by commodity groupsCAD 40,761 m




34%

41%

11%

1% 2% 1%2%

8%

37%

40%

10%

3% 1%1%2%

6%

IMPORT 2007: Value of Air Cargo by commodity groupsCAD 55,599 m







4.5.2 Canadian Road Transportation and Trade

The Canadian road system comprises around 900,000 kilometers of road of which ca. 4.2% are highways. In 2007 Canada had about 12,200 for-hire trucking companies that generated estimated revenues of CAD 32.4 bn. (source: Transport Canada). Intraprovincial truck traffic grew by 14.1% from 2004 to 2006.


61

Figure 65: Tonnage by Canadian For-Hire Carriers – 2004 to 2006

392421

447

69 72 7354 52 4943.5 42.4 38

0

50

100

150

200

250

300

350

400

450

500

2004 2005 2006

InterprovincialInterprovincial IntraprovincialIntraprovincial

International ExportsInternational Exports

m metric tonnes

International ImportsInternational Imports

Domestic Trucking

International Trucking

Source: Statistics Canada, new Trucking Commodity Origin and Destination (TCOD)

Survey, beginning with reference year 2004

Trade between Canada and the United States increased significantly (191%) from 1990 to 2005 (Statistics Canada). Truck traffic between Canada and the U.S. is fairly balanced whereas truck traffic between Canada and Mexico is characterized by 91% imports from Mexico to Canada.

Figure 66: Canadian Int. Trade Shipped by Trucks per Country – 2008

162,876 163,936

1,76412,635

4,976

50,203

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2008 Exports 2008 Imports

Other CountriesOther CountriesUnited StatesUnited States MexicoMexico

m CAD

Source: Transport Canada, adapted from Statistics Canada, International Trade

database, March 2009

Machinery and electrical parts, automobile parts, other manufactured goods, base metals, agricultural products and food account for 80% of all trucked export values and 82% of all trucked import values.


62

Figure 67: Canadian Int. Trade Shipped by Trucks per Commodity Group – 2008

11.2%

21.2%

0.6%

18.9%

17.4%

11.0%

10.1%

1.2%1.0%1.5%

6.0%

Machinery and electricalequipment Automobiles and other transport

Other manufactured andmiscellaneous goods Base metals and articles of basemetal Agricultural and food products

Plastics and chemical products

Forest products

Petroleum products

Cement and non-metallicproducts Waste and scrap

Minerals, ores and concentrates

8.5%

3.1%1.1%

0.9%1.4%

11.0%

8.1%

16.2%19.9%

0.2%

29.7%

EXPORT Truck Commodity groups:Total value CAD 169,616 m

EXPORT Truck Commodity groups:Total value CAD 169,616 m

IMPORT Truck Commodity groups:Total value CAD 226,773 m

IMPORT Truck Commodity groups:Total value CAD 226,773 m

Source: Transport Canada, adapted from Statistics Canada, International Trade

database, March 2009

Windsor is connected to the largest border crossing between Canada and the United States – the Ambassador Bridge (for further information please refer to chapter 4.2.2 infrastructure). The figure below shows the top 20 bor-der crossings measured by two-way truck movements. Seven out of the top 20 border crossings are situated in Ontario. Figure 68: Twenty Largest Border Crossings (CA-US) for Trucks - 2008

0 0.5 1 1.5 2 2.5 3

Armstrong Que.

Kingsgate B.C.

Osoyoos B.C.

Windsor–Detroit Tunnel Ont.

Huntingdon B.C.

Sault Ste. Marie Ont.

Woodstock N.B.

Aldergrove B.C.

North Portal Sas.

Rock Island Que.

Phillipsburg Que.

Coutts Alb.

Lansdowne Ont.

Emerson Man.

Lacolle Que.

Pacific Highway / Douglas B.C.

Niagara Falls – Queenston Br. Ont.

Fort Erie – Peace Bridge Ont.

Sarnia – Blue Water Bridge Ont.

Windsor – Ambassador Bridge Ont.

Two-way truck movements in mTwo-way truck movements in m

Source: Transport Canada, adapted from Statistics Canada, International Travel

section, and other unpublished statistics

4.5.3 Canadian Rail Transportation and Trade

Rail transportation is the most fuel efficient and environmentally friendly mode of surface transportation, but it is also the most capital-intensive. A fact that cannot be ignored in today's environment of financial volatility and limited credit. Volatility in fuel prices and concerns about carbon emissions


63

have placed demands on both passenger and freight rail services and hence on infrastructure. Total operating revenues for the Canadian railway industry reached CAD 10.5 bn in 2007. Ontario is leading international rail trade as it accounted for 23.0% of total rail exports and 45.6% of total rail imports of Canada. Figure 69 and Figure 70 show the exported tonnage originating and the im-ported tonnage cleared in Canada and Ontario respectively. Figure 69: Rail exports originating from Canada and Ontario – ‘99 to ‘08

0

10

20

30

40

50

60

70

80

90

1999 2000 2001 2002 2003 2004 2005 2006 2007

m metric tons

Rail Exports OntarioRail Exports Ontario Rail Exports CanadaRail Exports Canada Source: Adapted from Statistics Canada (International Trade Division) by Transport

Canada, 2008 Data not available due to problems with Statistics Canada estimation

factors

Figure 70: Rail imports originating from Canada and Ontario – ‘99 to ‘08

0

10

20

30

40

50

60

70

80

90

1999 2000 2001 2002 2003 2004 2005 2006

Rail Imports OntarioRail Imports Ontario Rail Imports CanadaRail Imports Canada

m metric tons

Source: Adapted from Statistics Canada (International Trade Division) by Transport

Canada, 2007/2008 Data not available due to problems with Statistics Canada esti-

mation factors

Ontario is leading international rail trade as it accounted for 23.0% of total rail exports and 45.6% of total rail imports of Canada.


64

Figure 71: Exports/Imports by Province/Territory of Origin/Clearance – ‘08

15.9%

2.3% 0.9%

4.3%

15.5%

18.5%

19.7%

23.0%

Ontario

Alberta

British Columbia

Saskatchewan

Quebec

Manitoba

New Brunswick

Nova Scotia

7.0%

2.3% 0.1%

11.3%

7.1%

9.0%

17.5%

45.6%

Rail EXPORTS 2006 by Province/Territory of Origin

Rail EXPORTS 2006 by Province/Territory of Origin

Rail IMPORTS 2006 by Province/Territory of Clearance

Rail IMPORTS 2006 by Province/Territory of Clearance

Total EXPORT Tonnage:77.9 m metric tons

Total IMPORT Tonnage:25.6 m metric tons





Source: Adapted from Statistics Canada (International Trade Division) by Transport

Canada

The main commodities transported on rails by volume were coal, mixed loads or unidentified freight and wheat. These three categories accounted for 28% of total tonnage in 2006.

4.5.4 Canadian Marine Transportation and Trade

Canada has around 110 for-hire marine carriers that generated revenues of CAD 2.9 bn in 2005. Over 300 Canadian ports handled 465.6 m metric tons of cargo in 2007. The figure below shows the total tonnage handled in Can-ada’s port system from 2005 to 2007. Figure 72: Tonnage Handled in Canada’s Port System – 2005 to 2007

471 466 466

0

50

100

150

200

250

300

350

400

450

500

2005 2006 2007

m metric tons

Source: Statistics Canada, Shipping in Canada, Cat. 54-205 and CPA’s web site data


65

4.6 Aviation Policies and Regulations

With respect to the overall goal of the consulting project, the consultants looked into the regulatory framework for international air service connections to Canada and Windsor.

4.6.1 Historical Background

In the Chicago ”Convention on International Civil Aviation“ from 1944, a mul-tilateral agreement was determined that defined the so called “freedoms of the air” (1: rights to fly over a foreign country, 2: right to make non-traffic stop e.g. for refueling, 3: right to set down traffic in a foreign country, 4: right to pick up traffic in a foreign country etc.) and included amongst others basic principles for international civil aviation such as sovereignty, equal opportuni-ty, no discrimination and autonomy. The Chicago Convention founded the International Civil Aviation Organization (ICAO) as a forum for international know-how transfer and as a framework for the accomplishment of interna-tional civil aviation.

4.6.2 Bilateral Air Agreements (Canada)

Despite the importance of the Chicago Convention the agreed principles are rather general and are the basis for secondary legislation. So-called bilateral agreements became necessary to fix traffic rights in order to transport pas-sengers, cargo and mail from one state to the other. Two states traditionally negotiate one or more of the following subjects: The number of frequencies per week Type of aircraft and/or number of seats One or more airline(s) registered in the other contracting state are entitled

to apply for the right to operate between the two states Commercial traffic rights beyond the respective contracting state The total number of airports which might be served in the other state Cabotage is the right for commercial air transport within the other state The general idea behind these agreements is to safeguard equal opportuni-ties for the (national) airlines(s) of the contracting states. Canada currently has bilateral air agreements with the countries listed be-low. For Windsor International Airport especially the designated Canadian and foreign airlines that are part of the bilateral agreements are important. Further information on each bilateral agreement can be found on the De-partment of Foreign Affairs and International Trade's Web site (http://www.treaty-accord.gc.ca).


66

Figure 73: Canadian Bilateral Air Agreements and Designated Carriers

Country Designated Canadian

Airline(s) Designated Foreign

Airline(s)

Algeria Air Canada (code-sharing services)

Air Algérie

Antigua* Air Canada West Jet Sunwing Airlines

Argentina Air Canada Aerolineas Argentinas

Aruba Air Canada WestJet

Australia Air Canada Harmony Airways (code-sharing services)

Qantas

Austria Air Canada Air Transat

Austrian Airlines

Bahamas* Air Canada West Jet

Barbados Air Canada WestJet Sunwing

Belgium Air Canada Air Transat Skyservice

Brussels Airlines

Brazil Air Canada VARIG-Vaiçao Varig Logistica TAM Linhas Aéreas S.A.

Bulgaria Air Canada Balkan Bulgarian Airlines 1

Chile Air Canada Lan Airlines S.A.

China Air Canada CargoJet Harmony Airways

Air China China Eastern Shanghai Airlines Co., Ltd.

Colombia** Air Canada Avianca

Costa Rica Air Canada Lineas Aereas Costarricensas, S.A. (LACSA)

Croatia Skyservice Air Canada

Cuba Air Canada Air Transat

Cubana

Czech Republic Air Canada Czech Airlines

Denmark Air Canada Scandinavian Airlines System (SAS)

Dominican Republic

Air Canada Air Transat Skyservice Zoom Airlines WestJet Sunwing

Dominicana 1

Egypt Air Canada EgyptAir Cargo1

El Salvador Air Canada

Fiji Air Canada Harmony Airways (code-sharing services)

Air Pacific

Finland Air Canada Finnair

France Air Canada Air Transat Zoom Airlines Skyservice

Air France Aeris 1 Corsair Air St. Pierre


67

Germany Air Canada Air Transat

Lufthansa Condor Flugdienst LTU Interna-tional Airways Lufthansa Cargo AG

Greece Air Canada Air Transat

Olympic Airlines

Grenada Air Canada

Guatemala* Air Canada

Guyana Air Canada TravelSpan GT Inc. E-Jet-Inc.

Haiti Air Canada

Hong Kong Air Canada Cathay Pacific

Hungary Air Canada MALEV Hungarian Airlines

Iceland Icelandair

India Air Canada Air India Jet Airways 1

Indonesia Air Canada Garuda 1

Ireland Air Canada Air Transat Skyservice

Aer Lingus

Israel** Air Canada El Al

Italy Air Canada Air Transat Skyservice Zoom Airlines Inc.

Alitalia Air Italy SpA Airone

Ivory Coast Air Canada Ivoire Aero Services (IAS)

Jamaica Air Canada Sunwing Airlines WestJet Skyservice

Air Jamaica

Japan Air Canada Japan Airlines All Nippon

Jordan Air Canada Royal Jordanian

Korea Air Canada Korean Airlines Asiana Airlines

Kuwait Air Canada Kuwait Airways Corporation Jazeera Airways Company

Lebanon* Air Canada1 Middle East Airlines1

Malaysia Air Canada Malaysia Airlines

Mexico

Air Canada Air Transat Skyservice Sunwing WestJet Zoom Airlines Harmony Airways CargoJet

Mexicana Aerovias de Mexico

Morocco Air Canada Royal Air Maroc

Netherlands Air Canada Air Transat

KLM Martinair

Netherlands Antilles Air Canada

New Zealand Air Canada Air New Zealand

Nicaragua Air Canada

Norway Air Canada Scandinavian Airlines System (SAS)

Pakistan Air Canada Pakistan International Airlines (PIA)

Panama Air Canada


68

Peru Air Canada Lan Peru

Philippines Air Canada Philippine Airlines

Poland Air Canada Air Transat

LOT Polish Airlines

Portugal Air Canada Air Transat Skyservice

TAP Air Portugal

Romania Air Canada TAROM S.A.

Russia Air Canada Skyservice

Aeroflot Transaero

Saint Lucia Air Canada West Jet Sunwing Airlines

British West Indies Airways (BWIA)

Saudi Arabia Air Canada

Serbia Skyservice Air Canada

Singapore Air Canada

Singapore Airlines Limited Jett8 Airlines Cargo Private Limited Singapore Airlines Cargo (Pri-vate) Limited

Spain Air Canada Air Transat

Iberia Spanair Air Comet

St. Kitts & Nevis Air Canada British West Indies Airways (BWIA)

Sweden Air Canada Scandinavian Airlines System (SAS)

Switzerland Air Canada AirTransat

Swiss International Air Lines

Taiwan** Air Canada China Airlines EVA Airways

Thailand Air Canada Thai Airways

Trinidad & Air Canada British West Indies Airways (BWIA)

Tobago

Ukraine Air Canada Air Ukraine AeroSvit Ukrainian-Mediterranean Airlines 1

United Arab Emirates

Air Canada Etihad Airways Emirates Air-lines

United Kingdom

Air Canada Air Transat Skyservice WestJet Airlines

British Airways Virgin Atlantic British Midland Airfreight Express Ltd.1 Trade Winds1 Thomas Cook Astraeus Ltd. Globespan Airways Ltd.

United States of America

Various Various

Venezuela Air Canada VIASA Aeropostal1

Vietnam Air Canada


69

1 carrier does not hold a license to operate air services to Canada

* 1949 Canada-UK Air Services Agreement, by succession

** Other instrument in lieu of an Agreement

Source: Canadian Transportation Agency, Report of Bilateral Air Relations between

Canada and Other Countries, last modified February 2009

The International Air Cargo Transshipment Program allows air cargo to be moved through Canada for shipment to third countries. For example, cargo could be flown from the United States into Windsor, stored temporarily and then flown to an Asian destination. Similarly, international air cargo could also arrive from overseas and then be shipped by rail or road from Windsor to the United States, allowing the airport to take full advantage of the Asia-Pacific gateway and corridor. The program enables the Canadian Transportation Agency to authorize any Canadian or foreign air carrier to use Windsor International Airport to trans-ship international air cargo, even if these rights are not provided in Canada's bilateral air transport agreements. In addition, air carriers will be able to combine such cargo transshipments with other services for which they may be licensed. Windsor International Airport has participated in the program since 1993.


70

5. Relevant Airports and Airlines for YQG

The following serves to give an overview of Windsor International Airport and those airports and airlines that could potentially have an impact on the eco-nomic and traffic situation for Windsor International Airport.

5.1 Windsor International Airport (YQG)

Windsor Airport is located in the southeast portion of the city of Windsor in Ontario, Canada and covers 2,000 acres of land. The airport serves a mix-ture of scheduled domestic airline flights, general aviation and cargo char-ters. The airspace above the airport is operated in collaboration with the FAA. The catchment area of Windsor International Airport has been defined in chapter 3.2 (page 16). The airport is classified as an airport of entry by NAV CANADA and is staffed by the Canada Border Services Agency (CBSA) providing on-site Canadian customs clearance services. Windsor International Airport is operated by Your Quick Gateway on behalf of the City of Windsor. YQG has two runways and is operational 24 hours per day, 7 days per week and is capable of supporting both VFR and IFR operations down to Cat I precision approach limits and departures in visibility down to 1/2 statute mile. Figure 74: Runways YQG

Name Orientation Elevation (ft)

Length (m) Width (m)

7 70 622 2394 6125 250 622 2394 6112 120 622 1571 6130 300 622 1571 61

Source: ATI

In 2007 the airport handled 118,251 passengers and 40,550 aircraft. Airlines serving the airport include Air Canada (Jazz), Sunwing and Cameron Air. Figure 75: Airlines serving YQG

Air Canada (Jazz)

Sunwing

Cameron Air

Airlines Serving YQG

Source: ATI


71

5.2 Competing Airports

Within a radius of 350 km around Windsor International Airport (this catch-ment area has been defined for the forecast – see chapter 3.2, see page 16) the following competing airports are situated, amongst others. Together with YQG these airports were defined as the Relevant Market that was consi-dered in the forecast: Region of Waterloo International Airport, ON, CA Hamilton - John C. Munro International Airport, ON, CA London International Airport, ON, CA Detroit Metropolitan Wayne County Airport, MI, USA Detroit Willow Run Airport, MI, USA Toledo Express Airport, OH, USA Toronto - Lester B. Pearson International Airport, ON, CA Bishop International Airport, MI, USA Caused by the proximity the characteristics of these airports are important for Windsor International Airport and are further described in the following chapters. The following table gives a short overview comparing the different airports: Figure 76: Comparison of YQG’s Competing Airports

AirportLanding Charges

Infrastructure FuelCargo

Tonnage (2008)

YKFup to USD 4.80 per ton plus tax

2 runways; 24/7 operations; forklift truckUSD 0.03/l turbo USD

0.04/l avgas

approx.0 tons

YHMup to USD 37.00 per ton MTOW

2 runways; warehouse; heated storage; air-conditioned storage; livestock handling; x-ray

equipment; dangerous goods; express/courier center

n/aapprox. 90,000

tons

YXU n/a 2 runways n/aapprox. 160 tons

DTWup to USD 6.69

per ton6 runways n/a

202,200 tons

YIPup to USD 3.33

per ton5 runways type 100LL

173,387 tons

TOL n/a

2 runways; 24/7 operations; cargo terminal; free port/foreign trade zone; heated storage; air-conditioned storage; refrigerated storage;

x-ray equipment; dangerous goods

n/a354,469

tons

YYZup to USD 31.58

per ton

5 runways; warehouse; heated storage; air-conditioned storage; refrigerated storage;

animal quarantine; x-ray equipment; dangerous goods

n/a483,200

tons

FNT n/a 3 runways type 100LLA14,057

tons Source: Lufthansa Consulting research


72

5.2.1 Region of Waterloo International Airport (YKF)

Region of Waterloo International Airport is situated 3 km south of the village of Breslau in the Regional Municipality of Waterloo and covers an area of 745 acres.

The first construction of the airport was completed in 1950 and it is owned and operated by the Region of Waterloo. YQF disposes of two runways. Figure 77: Runways YKF Name Orientation Elevation

(ft)Length (m) Width (m)

7 70 1040 2135 4625 250 1040 2135 4614 140 1040 1251 4632 320 1040 1251 46

Source: ATI

In 2008 the airport handled 0.118 million passengers. The handled cargo tonnage was not significant but Waterloo was considered in the Relevant Market as the airport has passenger figures that are comparable to YQG. YKF can accommodate aircraft up to a “Code C” classification. Airlines serv-ing the airport include WestJet and Bearskin Airlines, which are scheduled year round. Figure 78: Airlines serving YKF

WestJet Airlines

Bearskin Airlines

Airlines Serving YKF

Source: ATI

Aircraft Landing Fee at YKF is based on gross take off weight: Figure 79: Landing Fees YKF

Landing Fees Domestic InternationalBased Aircraft No Fee below 2,500 kg No Fee below 2,500 kg

Itinerant Aircraft No Fee below 1,000 kg No Fee below 1,000 kg1,000 - 21,000 kg $3.50 /1000 kg + tax $3.80 /1000 kg + tax21,001 - 45,000 kg $4.00 /1000 kg + tax $4.30 /1000 kg + tax

Over 45,000 kg $4.50 /1000 kg + tax $4.80 /1000 kg + tax Source: Region of Waterloo International Airport

Fuel surcharges are CAD 0.03 per liter turbo and CAD 0.04 per liter Avgas.


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5.2.2 Hamilton - John C. Munro International Airport (YHM)

Hamilton’s John C. Munro International Airport is situated in Hamilton, Ontar-io. The airport was privatized in 1995 and is now owned by the City of Hamilton and operated by Tradeport International. The airport disposes of two runways: Figure 80: Runways YHM

Name Elevation (ft) Length (m) Width (m)12L 780 2438 6030R 780 2438 60

6 780 1828 4524 780 1828 45

Source: ATI

In 2008 the airport handled 0.546 million passengers and 90,000 tons of air cargo. Airlines serving the airport include WestJet Airlines, CargoJet Airways and FlyGlobespan. The airport is Canada’s largest integrated courier airport and home to all four of the largest overnight package delivery companies operat-ing in Canada. Courier companies include Purolator Courier, United Parcel Service, FedEx, BAX Global and CargoJet. Figure 81: Airlines serving YHM

WestJet Airl ines

CargoJet Airways

FlyGlobespan

Airlines Serving YHM

Source: ATI

At John C. Munro International Airport for each aircraft landing the fee is the greater of the Standard or the Minimum Fee.


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Figure 82: Landing Fees YHM

Landing Fees Flight TypeFee per 1000 kg

MTOW or portion thereof

Standard (Signatory Air Carriers)

Domestic, Transborder and International

$ 10.88

Standard (Non-Signatory Air Carriers)


$ 12.69

Minimum Landing Fees (Aircraft up to 2000 kg)


$ 18.50

Minimum Landing Fees (Aircraft 2001 – 3750

kg)


$ 37.00

Source: John C. Munro International Airport

5.2.3 London International Airport (YXU)

London International Airport is situated 9 km northeast of London City Cen-ter in Ontario, Canada.

London International Airport is owned by Transport Canada and operated by the Greater London International Airport Authority. The airport disposes of one terminal and two runways: Figure 83: Runways YXU

Name Orientation Elevation (ft) Length (m) Width (m)9 90 912 1920 60

27 270 912 1920 6015 150 912 2682 6033 330 912 2682 60

Source: ATI

In 2007 the airport handled 0.455 million passengers with 0.165 million air-craft movements. London International Airport handled approximately 160 metric tons of cargo in 2008. Airlines serving the airport include Air Canada, Northwest Airlines, United Airlines and WestJet Airlines.


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Figure 84: Airlines serving YXU

WestJet Airlines

Air Canada

Northwest Airlines

United Airlines

Sunwing

Transat Holidays

Sunquest

Airlines Serving YXU

Source: London International Airport

5.2.4 Detroit Metropolitan Wayne County Airport (DTW)

Located 32 km southwest of Detroit, Detroit Metropolitan Wayne County Airport is the largest hub for Northwest Airlines and the second-largest hub for low-cost carrier Spirit Airlines. The airport is operated by Wayne County Airport Authority and has two ter-minals. The airport disposes of six runways: Figure 85: Runways DTW

Name Orientation Elevation (ft) Length (m) Width (m)03L 36 636 2591 6021R 216 632 2591 6004R 36 637 3658 6022L 216 636 3658 6003R 36 633 3048 4621L 216 632 3048 4609L 96 638 2654 6027R 276 635 2654 6009R 96 636 2590 4627L 276 629 2590 4604L 36 645 3048 4622R 216 642 3048 46

Source: ATI

In 2008 the airport handled 35.136 m passengers and 202,200 metric tons cargo (without mail). The chart below shows the freight development starting in January 2008 to January 2009.


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Figure 86: Total Air freight DTW – 2008 to 2009

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Figure 87: International Air freight DTW – 2008 to 2009

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Figure 88: Domestic Air freight DTW – 2008 to 2009

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Airlines serving DTW include Air Canada, Air France, American Airlines, Delta and Lufthansa. Figure 89: Airlines serving DTW

Air Canada Frontier Airlines

Air France Lufthansa

American Airlines Northwest Airlines

Aero Mexico Spirit Airlines

Continental Airlines United Airlines

Delta Airlines US Airways

Airlines Serving DTW

Source: ATI

Airlines serving Detroit Metropolitan Wayne County Airport have to pay land-ing charges, parking charges and an international terminal use fee. Figure 90: Charges DTW

Type Fee

Landing Charge (Signatory)

USD 5.36 per metric tonne

Landing Charge (Non-Signatory)

6.69 USD per metric tonne

Parking ChargeFirst 8 hours free

thereafter 50% of landing charge per 24 hours

International Terminal Use Fee (Berry

Terminal)

USD 3.50 per arriving passenger

International Terminal USE Fee (Mc Namara

Terminal)

USD 4.50 per arriving passenger

Source: IATA

5.2.5 Detroit Willow Run Airport (YIP)

Detroit Willow Run Airport is located in the Van Buren Charter Township near Ypsilanti, Michigan (seven miles west of Detroit Metropolitan Airport) and serves freight, corporate and general aviation clients. Detroit Willow Run Airport occupies 2,600 acres of land.


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The Wayne County Airport Authority operates this public airport, which dis-poses of five runways: Figure 91: Runways YIP

Name Orientation Elevation (ft) Length (m) Width (m)05L 53 716 2028 4923R 233 706 2028 4905R 53 715 2293 4623L 233 702 2293 4609L 95 716 2222 4927R 275 700 2222 4909R 95 715 1984 4927L 275 703 1984 4914 143 714 1923 4932 323 704 1923 49

Source: ATI

Willow Run Airport has 100,000 operations per year. Approximately 173,387 tons of cargo were transferred through the airport in 2008. Cargo airline Ka-litta Air is based at Willow Run Airport. Figure 92: Airlines serving YIP

Kalitta Air

National Airlines

USA Jet

Airlines Serving YIP

Source: Willow Run Airport

At Detroit Willow Run Airport, landing fees are applicable to both private and commercial aircraft, where landing fees are not covered by the terms of a written agreement between the Wayne County Airport Authority and the aircraft operator.


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Figure 93: Landing Fees YIP Landing weight

categoriesLanding Fee

Up to 2.95 tonnes No charge2.95 to 5.67 tonnes $ 18.005.67 to 13.6 tonnes $ 45.0013.6 to 27.2 tonnes $ 90.0027.2 to 36.3 tonnes $ 120.0036.3 to 45.4 tonnes $ 150.0045.4 to 68.0 tonnes $ 225.0068 tonnes and over $ 3.33 per metric tonne

Maximum landed weight categories

Tenant & Itinerant customs fees

under 5.7 tonnes $ 65.005.7 to 18.1 tonnes $ 117.0018.1 to 45.4 tonnes $ 227.0045.4 to 68.0 tonnes $ 455.0068.0 to 136 tonnes $ 700.00136 tonnes and over $ 910.00 Source: Detroit Willow Run

5.2.6 Toledo Express Airport (TOL)

Toledo Express Airport is situated 16 km west of Toledo, Ohio, about an hour drive from Windsor. It is a regional cargo airport.

The airport is owned by Toledo-Lucas County Port Authority and disposes of one terminal and two runways: Figure 94: Runways TOL

Name Orientation Elevation (ft) Length (m) Width (m)7 73 683 3231 46

25 253 665 3231 4616 163 675 1707 4634 343 665 1707 46

Source: ATI

In 2008 the airport handled 0.251 million passengers and 354,469 tons of cargo. The airport has recently started cooperation with Emirates Sky Cargo in Dubai in the field of pharmaceuticals and other lightweight, high-value-added goods. Airlines serving the airport are Allegiant Air, Mesaba Airlines, American Eagle Airlines, Qantas and Atlas Air.


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Figure 95: Airlines serving TOL

Allegiant Air

American Eagle Airlines

Atlas Air

Mesaba Airlines

Qantas

Airlines Serving TOL

Source: ATI

5.2.7 Toronto - Lester B. Pearson International Airport (YYZ)

Toronto’s Lester B. Pearson International Airport is located 27km north-west of Toronto in the city of Mississauga. The airport occupies 420 hectares of land. Owner of the airport is the Greater Toronto Airports Authority. The airport disposes of two terminals and five runways: Figure 96: Runways YYZ

Name Orientation Elevation (ft) Length (m) Width (m)15L 150 569 3368 6033R 330 569 3368 6015R 150 569 2590 6033L 330 569 2590 6023 230 569 3241 6024L 240 569 2895 6006R 60 569 2895 60

5 50 569 3348 6006L 60 569 2956 6024R 240 569 2956 60

Source: ATI

Toronto Pearson handled 32.3 million passengers and 483,200 tons of cargo in 2008. There are two main cargo facilities at Pearson. The Cargo West Facilities are located between runways 15L/33R and 15R/33L, and the Car-go Area 5 or VISTA Cargo Centers Incorporated are located north of Ter-minal 3. The airport also provides facilities for FedEx. Airlines serving the airport include Air Canada, American Airlines, Cargolux and KLM.


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Figure 97: Airlines serving YYZ

Air Canada Cathay Pacific

Air France Lufthansa

American Airlines Etihad Airways

Emirates Air India

Cargolux Airlines United Airlines

Air France US Airways

Air Transat KLM

LAN Airlines LOT Polish Airlines

Finnair WestJet Airlines

Aero Mexico British Airways

Continental Airlines

Airlines Serving YYZ

Source: ATI

Airlines serving the airport have to pay landing charges, parking charges and a general terminal fee. Figure 98: Landing fees YYZ

Type Fee

Peak: CAD 145 per landing

Non-peak: CAD 82.50 per landing

Landing charge (aircraft over 19 tons)

CAD 35.09 per ton

Parking charge (aircraft up to 19 tons)

First six hours free, CAD 12.20 per day

Parking charge (aircraft over 19 tons)

First six hours free, CAD 1.25 per ton

General Terminal Fee (International Arrivals)

CAD 9.86 per seat

General Terminal Fee (Domestic Arrivals)

CAD 7.89 per seat

Landing charge (aircraft up to 19 tons)

Source: IATA


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5.2.8 Bishop International Airport (FNT)

Bishop International Airport (FNT) is located in the city of Flint in Michigan (USA) near the Great Lakes. Bishop International Airport is publicly owned and operated by the Bishop International Airport Authority Board which contains nine members who are appointed to three year terms. Members of the board are the mayor of the City of Flint and the Genesee County Board of Commissioners. FNT’s airport director reports directly to the board. The airport has one terminal and is served from cargo integrators DHL, Emery worldwide and FedEx. It disposes of three runways. Figure 99: Runways FNT

Name Orientation Elevation(ft) Length(m) Width(m)

09 095 764 2195 4527 275 763 2195 4518 186 764 2392 4536 006 779 2392 4505 053 778 1195 4523 233 763 1195 45

Source: ATI

FNT handled 35,859 passengers in May 2009, 15.51% less than in May 2008. In 2008 the airport handled 5,891 metric tons of cargo (enplaned) and 8,168 metric tons of cargo (deplaned). The following figure shows the han-dled freight tonnage at Bishop International Airport. Figure 100: Air cargo tonnage at FNT – 01/2008 to 05/2009

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Airlines serving the airport include Delta, Northwest Airlines and Continental Connection. Figure 101: Airlines serving FNT

AirTran Airways

American Eagle

Continental Connection

Delta

Midwest Connect

Northwest Airlines

Airlines serving FNT


Bishop International Airport is also served by Federal Express. In 2008, the Integrator deplaned 4,418 metric tons and enplaned 5,516 metric tons at Bishop International Airport as shown in the figure below. Figure 102: FedEx air cargo tonnage at FNT – 01/2008 to 05/2009

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5.3 Historic Traffic Development at YQG

Existing data about freight tonnage and the number of passengers handled at YQG is very limited. It is estimated that 300 tons of cargo were handled in 2008. The following chart shows the development of aircraft movements at Wind-sor International Airport as aircrafts movements are related to transported freight. As shown in the figure below traffic movements increased over the last five years and Windsor International Airport operated 41,573 aircraft movements in total in 2008. Figure 103: Total Aircraft movements at Windsor Airport – 2004 to 2008

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Comparing the total aircraft movements of Windsor International Airport with other Canadian airports, YQG significantly improved its rank within the last five years.


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5.4 Canadian Airline Market

The development of air cargo business at Windsor International Airport is strongly dependent on the development of new air services to and from YQG. Therefore the following chapter gives a general overview of airlines in the Canadian aviation market including leading airlines such as Air Canada, WestJet and Air Transat as main passenger airlines and Air Canada Cargo, CargoJet Airways, WestJet Cargo and Air Transat Cargo as Canada’s lead-ing cargo airlines. The second part of this chapter gives a short overview of other Canadian regional and cargo airlines.

5.4.1 Canada’s Key Passenger and Cargo Airlines

Air Canada / Air Canada Cargo Canada's flag carrier, Air Canada together with its regional airline subsidiary, Air Canada Jazz, provides scheduled and charter air travel in Canada for passengers to more than 150 destinations. 23 million passengers fly with Air Canada between Canada and the U.S. per year and 23 Canadian airports offer non-stop flights to the USA. Figure 104: Air Canada

Revenue (m USD), 2008 10,383.1

Passengers (m), 2008 32.9

Net Profit (USD m), 2008 -960.4

Employees, 2008 24,200

Fleet 196

Destinations 80 Source: Air Transport Intelligence

With an extensive wide body fleet, Air Canada Cargo can handle the most varied shipments. They also offer extensive trucking services to compliment the aircraft network. Air Canada achieved operating revenue in its cargo business of CAD 76 m in June 2009. The airline achieved its highest revenue in the Canadian seg-ment (CAD 1,710), followed by the US Transborder segment (CAD 830).


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Figure 105: Cargo Revenues Air Canada

2009 2008Canada CAD 1,710 CAD 1,998

US Transborder CAD 830 CAD 998Atlantic CAD 757 CAD 858Pacific CAD 374 CAD 447Other CAD 398 CAD 474Total CAD 4,069 CAD 4,765

Six months ended June 30Cargo Revenues

Source: Air Canada

Air Canada Cargo provides the following products to their customers: Air freight shipments Express airport-to-airport service for small packages traveling within

Canada Handling of live animals (AVI) High-value shipments that require special attention Handling of dangerous goods A worldwide premium solution for time-sensitive shipments Compassion Transport of specialized or pharmaceutical shipments that require a tem-

perature-controlled environment Air Canada holds rank 37 in the top 50 cargo airline ranking by traffic in 2007 with Revenue Ton Kilometers (RTK) of CAD 1,271 m. Figure 106: Cargo Airline Ranking 2007

Ranking 2007

Airline CountryCargo traffic

RTK mchange

Cargo revenue $ m

change

1 FedEx USA 16,008 4.0% 24,421 7.7%2 Air France-KLM France 11,365 3.4% 4,181 11.4%3 United Parcel Service USA 9,93 8.5% 4,788 27.0%4 Korean Air South Korea 9,677 9.3% 2,73 9.4%5 Cathay Pacific China 8,9 18.4% 2,082 13.5%… … … … … … …35 Continental Airlines USA 1,38 (3.8%) 453 (0.9%)36 Qatar Airways Qatar 1,321 45.2% 354 39.5%37 Air Canada Canada 1,271 10.8% 516 (5.7%)

Source: Flight Global

WestJet / WestJet Cargo WestJet was founded in 1996 by a team of Calgary entrepreneurs. With 220 employees, they began service on February 29th, 1996, to five cities in Western Canada. WestJet handled 14.3 m passengers in 2008 and generated revenue of USD 2,388.7 m.


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Figure 107: WestJet Revenue (m USD), 2008 2,388.7


Net Profit (USD m), 2008 166.9

Employees, 2008 6.187

Fleet 79


Since 1997 the cargo business of WestJet is performed by ELS Marketing Inc., a supplier of air freight related services and products. ELS Marketing Inc. is responsible for sales, marketing, accounting and administrative func-tions of West Jet’s cargo product. WestJet Cargo operates a fleet of 737-600, 737-700 and 737-800 series aircraft. It operates about 300 flight depar-tures daily from 30 Canadian cities. Commodities flown by WestJet Cargo include live tropical fish, lobsters, Canada post mail, mining equipment and auto parts.

Air Transat / Air Transat Cargo Air Transat is a wholly-owned subsidiary of Tour Operator Transat A.T., op-erating scheduled and charter services out of five major bases in Canada. Primary summer season destinations are those in Europe and the Carib-bean, while winter destinations are primarily in the Caribbean, Mexico, USA and South America. Air Transat also operates year-round scheduled flights from Canada to Europe as well as to the USA (Florida) and some Caribbean countries. The airline is also the designated 'flag carrier' between Canada and Cuba. In 2008 the airline achieved USD 700 m in revenue and handled 3.2 m pas-sengers. Figure 108: Air Transat

Revenue (m USD), 2008 700.0


Employees, 2008 3,051

Fleet 19


Air Transat Cargo provides direct cargo services from Canada to Europe, the Caribbean and Latin America. The airline can carry oversize, bulky and heavy items as well as dangerous goods. Airline Services International Inc.


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is Air Transat Cargo’s new air cargo partner and manages and promotes its air cargo products and services within Canada.

CargoJet Airways CargoJet Airways is Canada's leading provider of time-sensitive overnight air cargo services. The airline transports approximately 401.4 tons of air cargo every business night over its North American network and also offers full aircraft charters. In 2008 CargoJet Airways generated revenue of USD 192.7 m with its fleet of 12 aircraft. Figure 109: CargoJet Airways

Revenue (m USD), 2008 192.7

Net profit (m USD), 2008 -0.3

Employees, 2008 406

Fleet 12

Destinations 12 Source: ATI

CargoJet offers special cargo services to transport live animals, pharmaceut-ical products and high-value cargo products to North American destinations.


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5.4.2 Other Regional and Cargo Airlines

The following table gives an overview of smaller regional airlines and some cargo airlines in Canada. Figure 110: Other regional and cargo airlines

Airline

Operational Base

Revenue Service

Montreal n/a

Passenger, Cargo, Domestic

Val d'Or

24.0 million USD (1995)


Toronto n/a

Passenger, Cargo, International

Dorval

21.0 million USD (1994)

Passenger, Cargo, Regional

St. John's n/a


Fort McMur-ray

n/a Passenger, Cargo,

Regional

Whitehorse n/a


Iqaluit n/a


Baie Com-eau


Regional

Yellowknife n/a


Inuvik n/a Passenger, Domestic

Alberta Citylink Medicine Hat n/a

Passenger, Regional, Domestic

Alta Flights Edmonton n/a

Cargo, International, Regional


90

Arctic Sunwest Charters

Yellowknife n/a Passenger, Cargo

Medicine Hat n/a


Sioux Lookout


Regional

Buffalo Airways Ltd

Hay River n/a Passenger, Cargo,

Regional

Calm Air Thompson n/a


Canadian Metro Airlines

London n/a Passenger, Domestic

Yellowknife n/a Passenger, Regional

Enfield n/a

Passenger, Interna-tional, Domestic

Central Mountain Air

Smithers 30.0 million USD (1998)


Calgary n/a Passenger

Calgary n/a Passenger, Domestic

Kanata 128 million USD (2000)


Kelowna n/a Passenger, Cargo

Globemaster Air Cargo

Edmonton n/a Cargo

Vancouver n/a Passenger, Cargo,

Domestic

Terrace n/a


Port Alberni n/a Passenger, Cargo,

International


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Kelowna n/a Passenger, Cargo,

International

Calgary n/a Passenger, Cargo,

International

Winnipeg n/a Passenger, Cargo,

Domestic

Victoria n/a Cargo, International

Edmonton n/a Cargo, Regional,

Domestic

Mirabel n/a Passenger, Cargo,

International

Fort St John n/a

International, Re-gional

Norman Wells


Domestic

Montreal n/a Passenger, Cargo,

International

Fort Smith n/a Passenger, Cargo,

Regional

Richmond n/a Passenger, Cargo,

Regional

Winnipeg n/a Passenger, Cargo,

Regional

Porter Airlines Toronto n/a

Passenger, Interna-tional, Regional

Charlotte-town


Domestic

Calgary n/a


Toronto n/a


Richmond n/a Passenger, Cargo,

Regional,

Toronto n/a

Passenger, Interna-tional

Prince Albert n/a


North Bay n/a Passenger, Cargo,

International


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Thunder Bay n/a


Vancouver n/a Passenger, Cargo,

Regional WestCan Interna-

tional Airlines Edmonton n/a

Cargo, International, Regional

World Star Air Cargo

Mississauga n/a Cargo, International,

Regional

Source: ATI


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6. Air Cargo Forecast

The methodology of the Air Cargo Forecast was described in detail in chap-ter 3. This chapter describes and presents the results of the Air Cargo Fore-cast. Primarily it outlines the influence factors that have been considered in the Forecast and describes which impact these influence factors have on the three scenarios (Optimistic, Conservative and Most Likely Scenario).

6.1 Influence Factors

As mentioned in chapter 3.5 (page 20) the following specific micro and ma-cro-economic influence factors (which have an impact on YQG’s air cargo development) have been defined: Specific micro-economic influence factors Development of Air Cargo Related Facilities Distribution Centers Airline Marketing / Air Service Development Specific macro-economic influence factors Pre-Clearance Facility Stimulus Packages and Local Business Development The influence factors are described briefly in the next chapters. How the influence factors affect the three different scenarios is explained in chapter 6.2.

6.1.1 Development of Air Cargo Related Facilities

YQG is presently handicapped in its cargo development as it lacks specific cargo handling and storage facilities. The ability to handle cargo is rudimen-tary and not in line with international handling practices. The establishment of a modern, efficient Air Cargo Terminal to accommodate general and spe-cial cargo (e.g. perishables, valuable cargo) with supporting facilities (e.g. for forwarders and logistical service providers) would be a major step for YQG towards becoming a full-service airport. It would also boost the com-petitive position of YQG and be a prerequisite in attracting cargo business to YQG.

6.1.2 Distribution Centers

Traditional and recent distribution centers (e.g. e-commerce fulfillment) rely on fast, safe and efficient logistical solutions. While trucking plays an impor-tant role for short and medium distances, only the employment of (all cargo) aircraft will make meeting delivery times possible over long distances. There-


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fore the settlement of distribution centers (on or off-airport) is likely to gener-ate air cargo for YQG (one way or to/from YQG).

6.1.3 Airline Marketing / Air Service Development

YQG is presently suffering from a lack of uplift capacity. The volume current-ly transported is almost entirely based on the occasional charter flight. Due to the lack of scheduled uplift capacity, YQG is not being recognized as a cargo airport by either forwarders or shippers. Field research has shown that shippers would be inclined to ship through YQG if cargo capacity were pro-vided on a regular basis. The demand for cargo capacity by local and re-gional shippers adds to the attraction of YQG as airlines are increasingly interested in the revenues from transporting cargo.

6.1.4 Pre-Clearance Facility

Being able to pre-clear US-bound cargo at a facility at YQG would eliminate the need to undergo time-consuming checks and inspections at the Canada-US border crossings. It would make YQG interesting as a port of entry for US-bound goods, whether they reach YQG by truck or air. Onward transpor-tation by truck may occur on RFS or Flying Trucks. Similar to the RFS trans-ports, the “Flying Trucks” are mainly used in Canada and the US. These trucks feed the cargo into the large airport gateways, e.g. in the US, for on-ward long-distance transportation but are not operated under a flight num-ber. However the units are built up completely on aircraft pallets (or contain-ers) and all paperwork is also finished at the origin station or forwarder warehouse. Windsor would be an ideal location as it is bypassed by signifi-cant truck traffic.

6.1.5 Stimulus Packages and Local Business Development

In line with other industrialized countries, Canada has passed an economic stimulus package to give a jumpstart to the contracting economy. In 2009, the plan (CAD 40 bn over 5 years) is expected to raise the GDP by 1.4%. Similarly, the USA has passed a stimulus package of far greater magnitude. On the state and regional level, various programs exist to facilitate and at-tract business development (e.g. Funding Programs for the Manufacturing Sector). Potentially, companies thus attracted to set up shop in the vicinity of the airport may generate air cargo.


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6.2 Assumptions for the three Forecast Scenarios

Lufthansa Consulting has applied the scenario technique as described in detail in the methodology section of this report. Basic assumptions for the three scenarios (conservative, most likely, optimistic) are as follows consi-dering all influence factors mentioned in the prior chapters. “Most Likely Scenario” The results of the most likely scenario are the traffic volumes to be expected with the highest probability as of today. It is based on current expectations and the most viable forecast for the future development. Expert opinions are reflected in the respective assumptions for the various market segments. Key assumptions for the development of specific segments are outlined in the following paragraphs. Specific micro-economic influence factors: Development of Air Cargo Related Facilities: A full-service cargo facility is

operational in 2011, catering to the requirements of all cargo products and players. However, the cargo community is slow to react and the ef-fects for YQG are medium-term.

Distribution Centers: Off-airport Distribution Centers contribute to the growing cargo throughput at YQG: These effects have an impact after 2012 and trucked air cargo is most likely to be the transport mode. Char-ter traffic will increase only in the long-term.

Airline Marketing / Air Service Development: Positive effects can be ex-pected in the short-term (2010), however, they will be based on charter traffic only. More supply of belly capacity on passenger aircraft is ex-pected to occur as early as 2012 due to larger aircraft and increased fre-quencies.

Specific macro-economic influence factors: Pre-Clearance Facility: The pre-clearance facility is functional only after

2016; however the situation at the border is not that critical in terms of processing delays (2nd bridge/border crossing). Therefore the pre-clearance facility will only induce some trucked and charter cargo.

Stimulus Packages and Local Business Development: GDP develop-ment, consumer spending and air cargo growth are closely correlated and there is a positive effect on air cargo for YQG as early as 2011. Spe-cial programs geared towards business development lead to the reloca-tion of companies that generate moderate amounts of air cargo. This ef-fect can take place as early as 2013.

“Optimistic Scenario” For the optimistic scenario it is expected that air cargo volumes are based on more favorable macro and micro economic and business conditions. Ad-ditionally the assumptions of the determinants have been altered according-


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ly. The influence factors for the optimistic scenario are as follows. Specific micro-economic influence factors: Development of Air Cargo Related Facilities: A full-service cargo facility is

established, catering to the requirements of all cargo products and play-ers. The air cargo effects for YQG are sizeable, but mid-term

Distribution Centers: Distribution Centers are set up as part of the YQG Air Cargo Village with the explicit intent of expediting shipments by air. The effect therefore is substantial; however, it is not likely to occur before 2012. Charter traffic will increase only in the long-term.

Airline Marketing / Air Service Development: Substantial increases in uplift capacity are based on charter flights in the short term. More supply of belly capacity on passenger aircraft is expected to occur as early as 2012 due to larger aircraft and increased frequencies.

Specific macro-economic influence factors: Pre-Clearance Facility: The pre-clearance facility as part of the Cargo

Village at YQG is a full-service facility (customs, security, phytosanitary etc.) and operational as early as 2013. Cargo handling services and trucker facilities are provided close by, minimizing costs and time. Delays at the border persist and sizeable amounts of trucked cargo and charter cargo are rerouted through YQG.

Stimulus Packages and Local Business Development: GDP develop-ment, consumer spending and air cargo growth are closely correlated and there is a very positive, short term effect on air cargo for YQG. Spe-cial programs geared towards business development lead to the reloca-tion of companies that generate considerable amounts of air cargo. In the case of some companies, the vicinity of the airport is sought out specifi-cally as air cargo transport is an important part of their logistics. Such ef-fect is likely to take place as early as 2012.

“Conservative Scenario” For the conservative scenario it is expected that air cargo volumes are based on less favorable macro and micro economic and business condi-tions. The assumptions of the influence factors have been altered according-ly. The influence factors for the conservative scenario are as follows. Specific micro-economic influence factors: Development of Air Cargo Related Facilities: A basic cargo facility is es-

tablished but only low volumes are generated. Distribution Centers: Moderate amounts of air cargo are generated by

Distribution Centers in the vicinity of YQG. The effect therefore is sub-stantial; however, it is not likely to occur before 2012. Charter traffic will increase only in the long-term.

Airline Marketing / Air Service Development: Positive effects on a limited scale can be expected in the short-term. However, they will be based on charter traffic only. More supply of belly capacity on passenger aircraft is


97

expected to occur as early as 2014 due to larger aircraft and increased frequencies.

Specific macro-economic influence factors: Pre-Clearance Facility: No agreement could be reached between the US

and Canadian authorities on establishing a pre-clearance facility Stimulus Packages and Local Business Development: The federal stimu-

lus package leads to a moderate short-term increase in demand for air cargo services to and from YQG. The effect of regional business pro-grams is noticeable only after 2015.


98

6.3 Cargo Forecast Results

The cargo forecast is derived by consolidating all cargo segments as men-tioned in chapter 3.4. The key assumptions of the forecast are described above. Overall the impacts result in an average growth rate for the forecast period (2009-2034) of 28.17% in the most likely scenario. The average growth rate for this period will be higher in the optimistic scenario (28.84%) and lower in the conservative scenario (26.67%). The average growth rates are rather high as Windsor International Airport starts off the cargo business with a very low cargo volume. The growth rates in the short term (2007-2011) are expected to be much higher – in the most likely scenario 161.62%, 185.50% in the optimistic scenario and 146.50% in the conservative scenario respectively. It is expected that in the long term the growth rates will slow down in all three scenarios. The average growth rates are an outcome of all assumptions made and the GDP related growth of the relevant market. Figure 111: Aggregated Average Growth Rate of the Total Cargo Fore-cast


The results of the cargo forecast within the three scenarios are shown be-low. A detailed list including all tonnage data for the shown forecast can be found in Annex I (page 103). A detailed presentation of each scenario is given in the next chapters. Figure 112: Total Air Cargo Forecast – all three Scenarios

0

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Total Cargo Most Likely Total Cargo Conservative Total Cargo Optimist ic



99

6.3.1 Most Likely Scenario

In terms of cargo volumes, it is expected that the total cargo tonnage at Windsor International Airport will grow from 161 tons in 2009 to 79,708 tons in 2034 in the most likely scenario. All data that is shown in the form of graphs in this chapter can be found in Annex I chapter 8.1 in tonnage figures for each year. Figure 113: Most Likely Air Cargo Forecast for YQG

0

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As outlined in chapter 6.2 the different influence factors have been exactly defined for each scenario. The figure below shows at which points the differ-ent influence factors have been assumed to have an impact on the cargo tonnage in YQG for the most likely scenario. It is expected that especially in the beginning the specific micro-economic influence factors are of higher importance to start off the cargo business in Windsor. Figure 114: Impact of Influence Factors on Most Likely Scenario

Metric tons

0

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Air Cargo related Facilities

Distribution Center2

Pre-Clearance Facilities

3 Airline Marketing / Air Service Development

1

2 Stimulus Packages & Local Business Development

3

2

1



100

Differing from passenger air transport, air cargo normally carries an imbal-ance between inbound and outbound cargo i.e. imported and exported ton-nage is not alike. For the Air Cargo Forecast for Windsor International Air-port this effect is not valid. As shown below it is expected that there is only slightly more inbound cargo but in general no significant difference is fore-casted. The detailed data is included in the present report in Annex I chapter 8.1, Figure 123 (page 107). Figure 115: Most Likely Scenario – Inbound vs. Outbound

0

10,000

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40,000

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60,000

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2010

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2034

Inbound Cargo - Most Likely Outbound Cargo - Most Likely

Metric tons


Although the majority of the expected air cargo tonnage is international, the percentage of domestic cargo grows towards 2034 compared to international air cargo. Figure 116: Most Likely Scenario – International vs. Domestic

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

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International Cargo - Most Likely Domestic Cargo - Most Likely

30.8 %

69.2 %

36.8 %

63.2 %

Metric tons


Road Feeder Services (RFS) and Charter Traffic create the majority of the cargo tonnage for YQG (for detailed data refer to Annex I chapter 8.1, Figure 124 – page 108). The dominance of the forecasted cargo tonnage that is created by RFS reflects the role of Windsor as a transit location for cargo


101

being unloaded from trucks crossing the border between the U.S. and Can-ada. Figure 117: Most Likely Scenario – Comparison of Cargo Segments Metric tons

0

10,000

20,000

30,000

40,000

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60,000

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2009

2010

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2031

2032

2033

2034




102

6.3.2 Optimistic Scenario

In the optimistic scenario it is forecasted that the air cargo tonnage will grow from 161 metric tons in 2009 to 90,713 metric tons in 2034. Figure 118: Optimistic Air Cargo Forecast for YQG

0

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4

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All further figures and data concerning the optimistic scenario are included in Annex I chapter 8.2 (starting on page 110).

6.3.3 Conservative Scenario

In the conservative scenario it is projected that the air cargo tonnage will grow from 161 metric tons in 2009 to 59,349 metric tons in 2034. Figure 119: Conservative Air Cargo Forecast for YQG

0

10,000

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30,000

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metric tons


All further figures and data concerning the conservative scenario are in-cluded in Annex I chapter 8.3 (starting on page 113).


103

7. Recommendations

Considering the remarkable business forces and competition surrounding the issue of air cargo potential for YQG, it is important to point out that certain steps will have to be taken to realize this potential. While the recom-mendations outlined below are by no means complete, in all cases further deliberation is needed.

7.1.1 Development of Air Cargo related facilities

On the supply side, the establishment of a modern, efficient air cargo ter-minal catering to the needs of YQG has been recognized as one of the prerequisites in attracting cargo business to YQG. Lufthansa Consulting recommends a comprehensive methodology to ensure project success by meeting medium and long term capacity requirements meeting international service standards required by the terminal operator,

airlines, trucking companies and other customers achieving competitive rental, operating and handling costs providing flexibility in view of possible changes in the economic environ-

ment, new commodities, cargo volume growth and shipment structures allowing promotion and marketing of special product categories and ser-

vices The development of YQG’s air cargo terminal should be preceded by the definition of specific planning parameters, as there is no cookie-cutter ap-proach in the design. While forecast figures provide the basis for capacity and space calculations, other parameters like peak time conditions, dwell times, shipment characteristics etc. have to be taken into account. In design-ing the facility, a phased, modular approach is recommended to enable the facility to grow with demand. Based on the findings of this study, the han-dling and transitory storage of perishable cargo must be possible. However, since these special storage areas are costly to build and operate, the design should be modular and flexible. The air cargo terminal will have full air/truck intermodal capability to allow for safe and speedy handling of cargo. Based on the forecasted volumes, no automated processing of cargo is fo-reseen; i.e. cargo will be handled by skilled workers operating mobile equipment. Potential sites for the cargo terminal will be evaluated according to estab-lished evaluation criteria in close cooperation with all stakeholders (YQG, Transport Canada, City Planning etc.) under consideration of a potential future integration into a Cargo Village or related projects.


104

7.1.2 Airline Marketing / Air Service Development

As pointed out before, the lack of uplift capacity severely hampers the cargo development of YQG. If cargo capacity would be provided on a regular ba-sis, shippers and forwarders would be inclined to consider YQG for their cargo business. The development of regular services therefore should be prioritized by utiliz-ing a comprehensive, time-tested approach as outlined below: Figure 120: Air Service Development Approach

Phase 2 –Traffic Development Concept

Phase 0 -Kick-off

Phase 3 -Marketing Action Plan

Phase 1 -Market PositioningStrategy

ASD Analysis & Training Implementation

Phase 4-Implementation Support

Ob

ject

ives

Create common understanding

Set-up project framework

Introduce project members

Agree on project plans, responsible persons

Quick assessment on airport’s current market strategy

Analyze weaknesses

Indentify business opportunities

Define market niches and develop future position of airport

Define necessary marketing action from the route studies Provide marketing

tools for client

Draft marketing plan/schedule to approach market

Train staff on general airline marketing techniques

Participate in individual airline meetings

Industry event / route conference support

Traffic analysis

Development of top five route studies

Selection and analysis of potential airlines

Prepare a comprehensive route profitability



105

7.1.3 Development of the “Cargo Village”

If YQG became part of an extended Cargo Village, not only would the City of Windsor and Windsor-Essex County benefit in terms of business develop-ment, revenues and new jobs, but YQG itself would likely benefit from the demand for air cargo services (and passenger services) generated within the Cargo Village. The medium to long term objective therefore should be to plan, design and develop a Cargo Village at YQG that will become a multi-modal gateway, incorporating airport and surrounding industrial areas, to-gether with rail links and trucking facilities, to attract, bundle and channel the international movement of cargo to and from points in North America. In realizing this project, the following steps should be taken: Figure 121: Development of the Cargo Village

Upgrade of the airport master plan

Integration of airport and off-airport areas

Intermodal integration

Development of the traffic infrastructure and utilities

Environmental aspects

Site selection

Security requirements

Layout design of the Cargo Village incl. options

Incorporation of regulatory requirements, guidelines and standards

Integration of issues like urban planning, zoning, tenant requirements, land- use hierarchies and compatibility, ecology, accessibility, security, sustainability, investor issues

Coordination with all pertinent stakeholders

Engagement of the stakeholders in providing solution-oriented input

Representation of the interests of YQG in Cargo Village-related matters (Consultations, presentations, workshops etc.)

Tailor business packages to specific industries

Develop incentives for potential investors / users

Identification of Development Tasks Development of Cargo Village Concept



106

8. Annex I - Cargo Forecast Data by Scenario

Figure 122: Data for Total Forecast – all three Scenarios

0

10,000

20,000

30,000

40,000

50,000

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200

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201

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201

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2013

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2031

2032

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3

2034

metric tons

Total Cargo Most Likely Total Cargo Conservat ive Total Cargo Optimistic

Year Most Likely Conservative Optimistic

2009 161 161 161

2010 263 245 265

2011 7,391 5,975 10,393

2012 14,488 11,023 18,916

2013 18,133 12,859 27,461

2014 19,718 14,642 30,516

2015 26,121 17,240 34,746

2016 30,396 18,206 37,357

2017 35,283 19,542 43,106

2018 38,913 22,130 46,076

2019 41,173 24,459 53,596

2020 48,500 31,822 56,671

2021 53,175 33,144 60,366

2022 54,999 35,825 62,273

2023 57,010 38,638 65,693

2024 58,942 40,360 67,724

2025 60,907 42,113 71,868

2026 62,441 43,437 73,526

2027 66,316 45,017 76,486

2028 68,171 47,672 78,456

2029 70,057 49,326 80,459

2030 71,982 51,015 82,501

2031 73,863 52,658 84,502

2032 75,773 54,328 86,533

2033 78,149 58,020 89,031

2034 79,708 59,349 90,713 Source: Lufthansa Consulting


107

8.1 Most Likely Scenario

Figure 123: Data for Most Likely Scenario – Inbound vs. Outbound

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

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2033

2034

Inbound Cargo - Most Likely Outbound Cargo - Most Likely

Metric tons

Year Inbound Outbound Total

2009 93 68 161

2010 111 152 263

2011 3,789 3,603 7,391

2012 9,528 4,960 14,488

2013 11,587 6,546 18,133

2014 12,386 7,333 19,718

2015 14,718 11,403 26,121

2016 15,999 14,397 30,396

2017 18,542 16,742 35,283

2018 20,458 18,455 38,913

2019 21,660 19,513 41,173

2020 25,099 23,401 48,500

2021 27,499 25,676 53,175

2022 28,493 26,506 54,999

2023 29,648 27,363 57,010

2024 30,729 28,213 58,942

2025 31,829 29,077 60,907

2026 32,680 29,761 62,441

2027 34,721 31,595 66,316

2028 35,755 32,417 68,171

2029 36,806 33,252 70,057

2030 37,879 34,103 71,982

2031 38,926 34,937 73,863

2032 39,989 35,784 75,773

2033 41,322 36,827 78,149



108

Figure 124: Data for Most Likely Scenario – International vs. Domestic

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

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2034

International Cargo - Most Likely Domestic Cargo - Most Likely

30.8 %

69.2 %

36.8 %

63.2 %

Metric tons

Year International Domestic Total

2009 154 7 161

2010 256 7 263

2011 5,744 1,647 7,391

2012 8,284 6,204 14,488

2013 11,285 6,847 18,133

2014 12,270 7,448 19,718

2015 17,980 8,141 26,121

2016 21,448 8,948 30,396

2017 25,344 9,939 35,283

2018 27,964 10,949 38,913

2019 28,511 12,662 41,173

2020 34,126 14,374 48,500

2021 37,894 15,281 53,175

2022 38,791 16,208 54,999

2023 39,600 17,410 57,010

2024 40,378 18,565 58,942

2025 41,165 19,741 60,907

2026 41,887 20,554 62,441

2027 44,739 21,576 66,316

2028 45,547 22,624 68,171

2029 46,369 23,688 70,057

2030 47,203 24,778 71,982

2031 47,976 25,887 73,863

2032 48,757 27,017 75,773

2033 49,552 28,597 78,149



109

Figure 125: Data for Most Likely Scenario – Comparison of Segments Metric tons

0

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2034


Year

ScheduledCargo

Charter Cargo

Integrator Cargo

RFS (Trucking) Total

2009 7 154 0 0 161

2010 7 256 0 0 263

2011 11 964 0 6,416 7,391

2012 1,151 1,278 0 12,058 14,488

2013 2,028 1,693 0 14,411 18,133

2014 2,158 1,876 0 15,684 19,718

2015 2,448 3,962 0 19,711 26,121

2016 2,665 5,329 0 22,401 30,396

2017 4,027 5,460 0 25,797 35,283

2018 4,075 5,593 0 29,245 38,913

2019 4,165 5,728 0 31,280 41,173

2020 5,540 5,865 0 37,095 48,500

2021 5,606 6,004 1,076 40,489 53,175

2022 5,674 6,392 1,089 41,844 54,999

2023 5,739 6,723 1,101 43,447 57,010

2024 5,805 6,944 1,114 45,079 58,942

2025 5,871 7,169 1,127 46,740 60,907

2026 5,941 7,398 1,139 47,963 62,441

2027 6,008 7,631 1,152 51,524 66,316

2028 6,081 7,869 1,165 53,057 68,171

2029 6,149 8,111 1,178 54,619 70,057

2030 6,224 8,357 1,192 56,210 71,982

2031 6,294 8,531 1,205 57,833 73,863

2032 6,366 8,707 1,219 59,482 75,773

2033 6,866 8,886 1,233 61,165 78,149

2034 6,516 9,068 1,247 62,877 79,708 Source: Lufthansa Consulting


110

8.2 Optimistic Scenario

Figure 126: Data for Optimistic Scenario – Inbound vs. Outbound Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

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90,000

100,000

2009

2010

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2034

Inbound Cargo - Optimistic Outbound Cargo - Optimistic


2009 93 68 161

2010 111 154 265

2011 5,699 4,695 10,393

2012 12,380 6,535 18,916

2013 14,835 12,626 27,461

2014 16,431 14,085 30,516

2015 18,529 16,217 34,746

2016 19,940 17,418 37,357

2017 22,931 20,176 43,106

2018 24,522 21,554 46,076

2019 27,744 25,852 53,596

2020 29,287 27,384 56,671

2021 31,221 29,144 60,366

2022 32,259 30,014 62,273

2023 34,119 31,574 65,693

2024 35,252 32,473 67,724

2025 37,443 34,425 71,868

2026 38,357 35,169 73,526

2027 39,942 36,544 76,486

2028 41,035 37,422 78,456

2029 42,146 38,313 80,459

2030 43,279 39,222 82,501

2031 44,387 40,114 84,502

2032 45,513 41,020 86,533

2033 46,909 42,122 89,031



111

Figure 127: Data for Optimistic Scenario – International vs. Domestic Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

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2034

International Cargo - Optimistic Domestic Cargo - Optimistic

24.8 %

75.2 %

34.8 %

65.2 %


2009 154 7 161

2010 258 7 265

2011 8,746 1,647 10,393

2012 11,869 7,046 18,916

2013 19,823 7,638 27,461

2014 22,185 8,332 30,516

2015 25,793 8,953 34,746

2016 27,588 9,769 37,357

2017 32,336 10,771 43,106

2018 34,285 11,791 46,076

2019 40,291 13,305 53,596

2020 41,334 15,337 56,671

2021 44,110 16,256 60,366

2022 45,079 17,194 62,273

2023 47,285 18,407 65,693

2024 48,151 19,573 67,724

2025 51,107 20,761 71,868

2026 51,941 21,585 73,526

2027 52,826 23,659 76,486

2028 53,726 24,730 78,456

2029 54,640 25,819 80,459

2030 55,568 26,933 82,501

2031 56,436 28,066 84,502

2032 57,312 29,220 86,533

2033 58,205 30,826 89,031



112

Figure 128: Data for Optimistic Scenario – Comparison of Segments Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

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2013

2014

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2016

2017

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2019

2020

2021

2022

2023

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2031

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2033

2034

International Scheduled Cargo - Optimistic International Charter Cargo - Optimistic

International Integrator Cargo - Optimistic International RFS (Trucking) - Optimistic

YearScheduled

CargoCharter Cargo

Integrator Cargo


2009 7 154 0 0 161

2010 7 258 0 0 265

2011 1,511 1,566 0 7,316 10,393

2012 2,331 1,808 0 14,777 18,916

2013 2,761 5,151 0 19,549 27,461

2014 3,083 5,377 0 22,056 30,516

2015 3,142 8,690 0 22,914 34,746

2016 3,367 8,932 0 25,058 37,357

2017 3,411 9,130 0 30,566 43,106

2018 4,778 9,307 0 31,991 46,076

2019 4,876 9,487 1,638 37,595 53,596

2020 4,934 9,668 1,704 40,364 56,671

2021 4,992 9,852 1,724 43,798 60,366

2022 5,054 10,284 1,744 45,190 62,273

2023 6,438 10,660 1,764 46,832 65,693

2024 6,511 10,926 1,784 48,503 67,724

2025 6,585 11,196 1,805 52,282 71,868

2026 6,664 11,470 1,825 53,568 73,526

2027 6,739 11,749 1,845 56,152 76,486

2028 6,819 12,033 1,866 57,737 78,456

2029 6,897 12,323 1,887 59,352 80,459

2030 6,979 12,617 1,909 60,996 82,501

2031 7,059 12,839 1,931 62,674 84,502

2032 7,139 13,063 1,952 64,378 86,533

2033 7,647 13,292 1,975 66,117 89,031



113

8.3 Conservative Scenario

Figure 129: Data for Conservative Scenario – Inbound vs. Outbound Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Inbound Cargo - Conservative Outbound Cargo - Conservative


2009 93 68 161

2010 111 134 245

2011 3,144 2,832 5,975

2012 7,155 3,868 11,023

2013 8,064 4,795 12,859

2014 8,893 5,749 14,642

2015 10,451 6,789 17,240

2016 11,047 7,159 18,206

2017 11,828 7,714 19,542

2018 13,237 8,893 22,130

2019 14,487 9,971 24,459

2020 18,843 12,979 31,822

2021 19,614 13,530 33,144

2022 21,043 14,782 35,825

2023 22,620 16,018 38,638

2024 23,621 16,739 40,360

2025 24,641 17,473 42,113

2026 25,411 18,026 43,437

2027 26,329 18,687 45,017

2028 27,789 19,883 47,672

2029 28,749 20,576 49,326

2030 29,731 21,284 51,015

2031 30,685 21,972 52,658

2032 31,656 22,672 54,328

2033 33,934 24,086 58,020



114

Figure 130: Data for Conservative Scenario – International vs. Domestic Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

International Cargo - Conservative Domestic Cargo - Conservative

41.3 %

58.7 %

44.6 %

55.4 %


2009 154 7 161

2010 238 7 245

2011 4,328 1,647 5,975

2012 6,259 4,763 11,023

2013 7,532 5,326 12,859

2014 8,594 6,048 14,642

2015 10,569 6,671 17,240

2016 10,933 7,273 18,206

2017 11,297 8,245 19,542

2018 12,708 9,422 22,130

2019 14,352 10,107 24,459

2020 20,345 11,477 31,822

2021 20,794 12,350 33,144

2022 22,581 13,243 35,825

2023 24,238 14,400 38,638

2024 24,841 15,519 40,360

2025 25,452 16,662 42,113

2026 25,997 17,440 43,437

2027 26,590 18,427 45,017

2028 28,233 19,439 47,672

2029 28,859 20,467 49,326

2030 29,495 21,521 51,015

2031 30,065 22,593 52,658

2032 30,643 23,685 54,328

2033 32,272 25,747 58,020



115

Figure 131: Data for Conservative Scenario – Comparison of Segments Metric tons

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

International Scheduled Cargo - Conservative International Charter Cargo - Conservative

International Integrator Cargo - Conservative International RFS (Trucking) - Conservative

YearScheduled

CargoCharter Cargo

Integrator Cargo


2009 7 154 0 0 161

2010 7 238 0 0 245

2011 11 588 0 5,376 5,975

2012 611 766 0 9,646 11,023

2013 979 1,174 0 10,706 12,859

2014 1,375 1,590 0 11,677 14,642

2015 1,784 1,804 0 13,652 17,240

2016 1,805 1,963 0 14,437 18,206

2017 1,831 2,054 0 15,657 19,542

2018 2,040 2,146 0 17,944 22,130

2019 2,137 2,271 0 20,051 24,459

2020 3,826 2,367 0 25,629 31,822

2021 3,871 2,465 0 26,809 33,144

2022 3,920 2,823 1,076 28,006 35,825

2023 3,965 3,095 1,089 30,490 38,638

2024 4,010 3,275 1,101 31,974 40,360

2025 4,056 3,458 1,114 33,486 42,113

2026 4,105 3,645 1,126 34,560 43,437

2027 4,152 3,836 1,139 35,890 45,017

2028 4,203 4,030 1,152 38,286 47,672

2029 4,251 4,229 1,165 39,681 49,326

2030 4,303 4,432 1,178 41,102 51,015

2031 4,352 4,560 1,191 42,554 52,658

2032 4,402 4,691 1,205 44,030 54,328

2033 4,879 4,824 1,219 47,097 58,020



116

8.4 Short to long term growth rates

Figure 132: Growth Rates



117

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