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Airport races to balance books (04/05)

By IAN ROSS Turbulent times have led many regional airports to search for new ways of generating revenue.


Turbulent times have led many regional airports to search for new ways of generating revenue.

With rising operating costs, fewer flights into smaller markets and ongoing troubles with the major carriers, cash-strapped airports like Sault Ste. Marie’s are sowing the seeds of diversification.

Instead of building a golf course on 1,700-acres of bushlot, the Sault Ste. Marie Airport Development Corporation elected to go a different route.

For one of the few privately operated, not-for-profit airports, it means staging weekend snowmobile or motocross races that regularly pull in more than 1,000 spectators.

“We had to diversify our revenue stream because of the downturn in the airline industry,” says airport manager Terry Bos.

A recent world championship of ice drag racing in mid-February attracted snowmobile competitors from across Canada, Michigan and Wisconsin.

The five-day event staged at the corporation’s Runway Park attracted 1,500 enthusiasts and was their largest out-of-town event to date.

Opened winter 2002-03, the corporation is marketing their 100-acre Runway Park as a four-seasons outdoor entertainment venue. Last year, Bos estimated between 12,000 and 15,000 spectators attended events ranging from ice and snow drags, to mud bogs, motocross races and tractor pulls.

The brainchild of Don Vallee, the airport’s maintenance and operations manager, volunteers cleared out the property four years ago, building an

access road, erecting fences and eventually extended power into the site.

Today, the facilities include a 2,000-foot long clay drag strip, two motocross tracks for junior and experienced racers, a 1,600-square foot fully-licensed canteen, a concessions trailer, and a registration building for event organizing.

Restricted to staging about 12 ‘noisy’ events every year to appease neighbouring homeowners, both Vallee and Bos say there’s another 50 acres they would like to develop to host a variety of other events including auctions and agricultural shows.

For years, many regional airports were chronic money-losers for Transport Canada, with the Sault bleeding about $1 million annually.

In the late 1990s, when Ottawa divested itself of responsibility for regional and local airports, municipalities and not-for-profit community groups took over ownership and operation of these facilities.

But it has been shaky times for the entire industry since September 2001.

When WestJet pulled out of the Sault in September 2003, eliminating five weekly flights, the revenue hit was considerable.

“I think it is safe to say we would not be in a deficit position if they were still here,” says Bos.

There just aren’t enough flights coming in to meet the set cost of having and operating the airport, according to Vallee.

“A facility of this size with all the pavement, lighting, electrical, plumbing - it costs money to run a place like this,” he says. “We don’t have enough flights coming in to offset (expenses) so you have to do other stuff.”

All the revenues from Runway Park events are earmarked for the airport’s operating funds.

Bos wouldn’t go into detail, but says attrition, efficiencies and the Runway Park have brought the airport close to that break-even point again.

Their original plan was to lower their reliance on the aviation industry from being 90 per cent of the airport’s revenues to 70 per cent. Bos says they’re closer to 85 per cent.

“We’re not losing money on the events.”

Vallee adds every event is bigger than the last.

Plans are underway for this spring to extend their motocross track and the corporation is currently working on a business plan for future development along with exploring further ideas to attract national events.

Vallee regularly attends snowmobile and motocross association meetings in the U.S. and regularly contacts the sanctioned racing bodies.

“There’s nothing we won’t look at.”