AMERICAS. Vancouver Airport Authority President & CEO Tamara Vrooman closed day four of the Summit of the Americas by sharing her insights into how the airport business will evolve post-pandemic.
Vrooman was appointed CEO of YVR in July 2020 and — in a compelling interview with The Moodie Davitt Report President & Editorial Director Dermot Davitt — looked back at what has been a year of both crisis and opportunity.
“When I joined, the pandemic was in full swing and it was eyes wide open for our sector,” she said. “I was previously the CEO of a large regional financial institution and helped the company recover from the financial crisis of 2008; so, I’ve had some experience leading a company through tumultuous times.”
“A crisis is a terrible thing to waste,” she added. “We’re taking this opportunity to re-examine our business so that we can take the next steps forward.”
Commenting on how this re-examination has shifted her priorities from the beginning of the crisis to present time, Vrooman said: “At our core, we are a people business. Our early priority was to support our people, passengers and partners and this has remained throughout.
One of the key shifts, according to Vrooman, was a move away from brick & mortar and into digitalisation and revenue diversification. “Business and revenue diversification were already priorities, and that has continued, although with some turbulence, over the last year. We noticed a big shift of passengers’ individual preferences away from physical stores and into the digital realm and we had to rethink our offer to adapt to this.
“Digitalisation is here to stay and we’re helping our retail and concession partners to make investments to adapt to the permanent shifts in how people shop.”
Vrooman also gave an outlook into how the pandemic has impacted YVR’s business. “Over the last few months, we’ve averaged 5,000 passengers a day. A year ago, that would have been 85,000 to 87,000 passengers a day. We moved from welcoming 26 million passengers annually, to becoming 2-3 million passenger airport. That is a -90% decrease.”
The picture, however, is not all grey, because according to Vrooman, YVR’s duty free business has remained resilient through the crisis. “We have a big duty free business and it’s actually performing quite well. People have a ‘buy while you can’ attitude, which has kept that side of the business relatively strong.”
Despite the significant decrease in passenger numbers, YVR has committed to supporting its staff, retail and airline partners, no matter how difficult the situation. “From our service staff to our ground handlers, everyone is part of the family,” Vrooman said.
“At capacity, we employ 26,000 people and we are committed to supporting those people and businesses. Making sure they have access to government programmes and negotiating individual terms have been a huge part of what our team have been doing in the last year.”
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To give further support to its furloughed employees, YVR partnered with local governments to deploy airport staff to vaccination clinics, with huge success. “Airport staff are excellent at customer service and the project has been so successful, the government are asking us to deploy more.
“It’s been a real boost in morale and truly demonstrated the value of our people when it comes to innovating and doing the right thing.”
While YVR had to cancel some big infrastructure projects in the last year, it also took the opportunity to invest in other areas of the business. The company developed an accurate digital twin of the airport, which according to Vrooman offers endless possibilities. “The complete digital replica will help us plan better scenarios for when passengers eventually return,” she said. “It will help us use sensors and manage passenger flows more efficiently.”
In terms of diversification, Vrooman highlighted YVR’s booming cargo business, which she described as a ‘bright’ spot amidst a bleak scenario. She also highlighted innovation and enhancement opportunities in logistics, baggage handling, cargo and even data collection.
“Our cargo business had the best financial year in 2020, but there’s still a way to go to modernise our cargo processes. Baggage handling hasn’t changed in over 70 years of commercial aviation and there’s plenty of ways to improve it. Enhancing these processes in the airport environment will not only improve the passenger experience but also increase efficiency and reduce our dependence on traditional energy.”
Despite the uncertainties in the global aviation industry, Vrooman is confident that travel will resume, and with force, once international restrictions begin to ease. She said, “We’ve been tracking passenger demand and there is a very strong intention to resume domestic business travel and international leisure travel as soon as its safe.
“Most people are equating safe with the readiness of vaccines and a reduction of quarantine measures. Once those conditions are in place, we forecast a quick and powerful return.”
When asked how these new dynamics will shape the airport industry, Vrooman said, “The biggest shifts will be business and leisure travel will look like, and how the pandemic will influence passenger expectations. Our airline partners are focusing more on cargo, and this will impact how space is allocated in the aircraft. I think we will see all sorts of explorations about different models for airlines and everyone will find more ways to expand in a situation where business travel is not likely to resume in the short-term.”
So, where are the opportunities for airports and the wider aviation industry in this new landscape? According to Vrooman, it’s all about digitalisation and diversification. “We’re very excited in the interest around our airport as a logistics hub and the ability to build a diversified revenue stream to complement our airport business,” she said.
“The land surrounding our airport is being eyed by Amazon, film studios and so much more because of the desire to be near our logistics hub. The data platform that will come from our airport’s digital twin will also bring significant opportunities that can benefit us and our partners.
“Nobody builds an airport in and of itself,” she added. “We exist for the sole purpose of serving our community and the economy that supports it. We want to be the gateway to this new economy after the crisis.”
The session concluded with Vrooman leaving a message of optimism and hope for the future of the travel industry. She said, “In pre-pandemic times, the near-term was always certain and the mid-to-long-term was not.
“The pandemic has turned that on its head. I am confident in the mid-to-long-term future of our industry. This is validated by forecasts and by investors. In the short-term it will be challenging, but I am confident in our recovery. I want to assure our partners that we are fully focused on delivering the best airport experience for when things do pick up again.”
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