Interview: Parm Sidhu, Abbotsford International Airport

How COVID-19 has stopped the Canadian ULCC boom in its tracks, and why Parm Sidhu believes his ultra-low-cost airport model is ideal for the recovery.

Born and raised in Abbotsford, Parm Sidhu has worked at Abbotsford International (YXX) for more than 16 years. He began his current role as General Manager in 2015.

How difficult is it to operate in Canada with the current COVID-19 restrictions?

Just like every other airport we have been impacted. Our passenger volumes have dropped, we ended the year with about 320,000 passengers compared to a million in 2019.

You know, from 2015 to 2019 we were one of the fastest growing airports. In 2015 we had about 490,000 passengers and by 2019 we had surpassed a million, and a lot of that was with ULCCs.

Swoop was in the market, NewLeaf was in the market, and they stimulated traffic and demand. We saw people taking multiple trips a year, compared to one trip a year, and fares came down.

So outbound leisure was your main driver?

We had five flights a day to Calgary (YYC) and Edmonton (YEG) up until 2015. There was good business traffic and a lot was connecting onwards into WestJet’s network throughout North America.

And so it was a combination of leisure, business, VFR, and then when the ULCCs came in, it was a combination of a lot of VFR and a lot of leisure. But you were still seeing some small business people take ULCC flights as well—they were just looking for point-to-point, their time was important and they had a direct flight at a good frequency and a good price point.

When ULCC flying really took off around 2018, we had people just flying to Edmonton for the day. The fares got so competitive. People would fly to Edmonton to go to the mall there. I know some families that would book a poolside cabana at the West Edmonton Mall, leave here on the 6:00 a.m., go there for the day and come back on the 9:30 p.m. or 10:00 p.m. and be back home in bed.

You had a few longer routes too, such as Las Vegas, right?

Yeah, we had Vegas. Pre-COVID we had Calgary, Edmonton, Winnipeg, Toronto Hamilton, London, Ontario, Vegas, Mazatlan, Puerto Vallarta... Our route map had grown immensely.

And now carriers are looking for any way to make a profit. How do their changing models affect you?

Our recovery will come through domestic VFR and leisure traffic. And that's what our airport is: our entire ecosystem is low cost, from parking to ground transportation to our airport platform for the airlines.

Everything is a low-cost ecosystem. And we believe a low-cost ecosystem that provides value and provides a good experience is going to be ready for whoever and whatever airlines you hear can be able to grow market share.

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We’re an ultra-low-cost airport. We have an open platform. We don't have an airport improvement fee at Abbotsford.

We empower the airlines and enable the airlines with a competitive platform to grow the marketplace and the key markets that the data shows where the population bases are.

In practical terms, what differentiates an ultra-low-cost airport?

In our business model, we want the airlines to manage the guests from  couch to couch.

We’re the Costco of airports: high value, low cost. You're through the terminal in record time on that plane, and you’re outbound and gone.

So we enable the airlines and to add capacity, take people where they need to go, and we enable them to grow at our airport. Our brand is built through their successes.

Although you're clearly facing tight restrictions at the moment, are your airline partners ready to grow again once those are lifted?

We're in regular dialogue with the ULCCs and we’re open for business.

This is one of the most livable areas in North America, in my opinion. A lot of people want to live here. There's a growing population, growing industries, so we're well set for the recovery period.

There's about 2.8 million people that live in this market; that's a significant population base. We don't really get winter here, so we could be a year-round destination for domestic tourism.

We hope the restrictions get lifted, and we can go see every little part of our beautiful country. We can enable Canadians to visit and stay within Canada while the restrictions are in place, and then open up the outbound international travel as the health crisis becomes more controlled, and the vaccinations are rolled out.

Photo credit: Abbotsford International Airport / Portrait photo credit: Parm Sidhu