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ONWARD UPWARD - Halifax Stanfield International Airport

ONWARD

and

UPWARD

HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2005 ANNUAL REPORT


ONWARD

and

UPWARD

HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2005 ANNUAL REPORT

CONTENTS

Left and Cover:

Architectural renderings

of Arrivals area upon completion

of U.S. pre-clearance facility.

Message From the Chair 4

Message From the President & CEO

6

Improving Facilities and Services 9

Leveraging Technology 10

Enhancing Customer Service 13

Increasing Air Service 15

Strengthening Community Partnerships 19

Sustaining Financial Stability 20

Financial Statements 22

2005 Board of Directors 29

Corporate Governance 32

Five-Year Forecast 34


ONWARD

and

UPWARD

‘Onward and Upward’ is a

phrase most often heard when

transitioning from the completion

of one phase to the next. In the

case of Halifax International

Airport Authority, the organization

has moved onward from

expansion, technology and

runway upgrades completed in

2005 and upward in anticipation

of U.S. pre-clearance, in-transit

facility, and common use

technology in 2006.

Construction has brought its own

challenges but the results are

worth it. Necessary infrastructure

and runway safety improvements,

new common use technology,

and the south-end commuter

expansion have served to further

solidify us as a world-class,

passenger-focused airport. These

are just a few of the milestones

that will help the Airport continue

upward momentum in 2006.

Message

From the Chair

HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT

In keeping with tradition, this annual report will look Vice President Operations, Peter Clarke. From February to

back over the past 12 months and recount the year’s many August, Peter held both positions, demonstrating leadership

activities. We believe this year’s theme ‘onward and upward’ during that time, and assisting Eleanor as she immersed

is fitting – it not only acknowledges where we’ve come herself in her new role.

from, but also aptly describes our desire to continue striving

In 2005 there were changes to the Board of Directors.

for excellence.

In June, we welcomed new member Cheryl Newcombe.

During 2005 we laid the foundation for significant terminal Cheryl is Comptroller of Lighthouse Lumber Wholesalers

expansion, as well as new leadership, welcoming Eleanor Limited, and replaces Bernie Miller as the Board nominee

Humphries as President & CEO in August.

from the Halifax Regional Municipality.

Prior to joining Halifax International Airport Authority The year marked the end of Bernie’s term as Chair of the

(HIAA), Eleanor was the President & CEO of Credit Union Board, a position he held for 10 years. The entire Board

Atlantic (CUA). She holds her Bachelor of Science and her extends their sincerest gratitude to Bernie for his tireless

Masters in Business Administration degrees, both from dedication to the Authority over his distinguished and

Dalhousie University. She has also obtained the Executive prolific tenure as Chair. As well, a special thanks to Bernie

Management designation from McGill University and her for stepping in, once again, on an operational level as

FICB (Honours). She has been honoured on three occasions interim Chief Executive Officer from February to August.

as one of the Top 50 CEOs in Atlantic Canada and received a Bernie remains on the Board as a nominee of the Board itself,

Distinguished Alumni Award from Armbrae Academy in 2004. the position vacated by Jim Cowan when he was appointed

to the Senate in March. Congratulations to Jim on this

We would also like to recognize the tremendous efforts of

well-deserved accomplishment, and our kindest thanks

our interim President & Chief Operating Officer, and current


HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2005 ANNUAL REPORT


for his exemplary service to the Board since its inception

in 1995. We truly appreciate his decision to continue his

association with us as Secretary to the Board.

We also thank and acknowledge retiring Board members

Stephen Wallace, another one of our original members, and

Carole Cushing, who joined the Board in 2004, for their

respective service and contributions to HIAA.

Throughout 2005 and early in 2006, a number of issues

arose that the Board will watch closely over the coming

year, and will no doubt have an impact on our industry

in the future. In May, the federal government announced

a new rent policy for federally-owned airports effective

January 1, 2006. While we have always promoted, and

will continue to promote, the elimination of airport rent,

the new policy gives us a reasonable long-term solution

and methodology that can be applied across the country.

This reduction in airport rent is a compromise solution, but

one that will mean a reduction in rent for HIAA.

In November, the governments of Canada and the United

States announced amendments to the 1995 Open Skies

Agreement. These amendments, to take effect in

September 2006, will provide greater access and pricing

flexibility for carriers in both countries. This is an exciting

development for our industry and one that will result in

increased traffic at airports nation wide.

In early 2006, the election of a new federal government

has led to the appointment of a new Minister of Transport,

Infrastructure and Communities, the Honourable Lawrence

Cannon. We have also seen several changes on the

provincial front with the Honourable Rodney MacDonald

becoming Premier and the appointment of new cabinet

ministers. We will continue to work with officials at all levels

of government to keep them well informed, garner their

support, and together, achieve our vision for our Airport

and our community.

I am pleased to have been a part of the Airport community

during the past year, and look forward to my new role as

Chair, as we journey onward and upward together.

Frank Matheson


Message

HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2005 ANNUAL REPORT


From the President & CEO

Eleanor Humphries

My arrival in August 2005 coincided with major renovations

both within the air terminal building and to airport runways.

And while my first six months have been memorable, I can

already see that these changes made in 2005 have set the

stage for an exciting future.

The theme of this year’s annual report ‘onward and

upward‘ is particularly fitting as we look back on 2005 – a

year that was defined by changes inside and outside the

air terminal building in preparation for the arrival of U.S.

pre-clearance in Halifax.

U.S. pre-clearance is one of the most significant

announcements for the Airport, and is slated to open in

2006. The addition of U.S. pre-clearance provides an

opportunity to increase routes to and from the United

States. The ability for more direct and efficient travel will

benefit both tourism and business, and will positively

impact economic growth in both Nova Scotia and the

Atlantic region.

To facilitate the opening of U.S. pre-clearance we have

expanded the north-end of the terminal and constructed

a new wing to the south-end of the building. We have

added more departure gates and implemented new

technology and tools throughout the Airport to provide

the traveling public and our airline partners with improved

and more efficient facilities.

But in 2005 we also faced challenges.

In July, at a critical phase in our runway reconstruction

project, when the Airport’s instrument landing system was

unavailable to pilots, we experienced weather conditions

that caused major inconvenience for visitors.

During the first two weekends of July, the Airport was

engulfed by dense fog for upwards of 14 hours. Flights were

delayed. Passengers were impacted. Travel plans were affected.

We learned a lot in 2005 about our responsibilities to the

traveling public, and these lessons have been taken to heart

as we prepare for the 2006 phase of runway rehabilitation and

complete the air terminal building renovations.

What sets our Airport apart is the commitment of the

whole Airport community to address challenges, as much

as we celebrate achievements. I would like to thank our

management team and all our employees and volunteers

who worked hard during the summer of 2005, and who

put customers first throughout the year.

Everything we do at the Airport is geared toward ensuring


HALIFAX INTERNATIONAL AIRPORT AUTHORITY

2005 ANNUAL REPORT


that airline passengers – our guests – have the best

experience possible while they are in our terminal.

We also know that when visitors to our province arrive

at the Airport, it is often the first impression they have of

Nova Scotia. We take this responsibility very seriously.

And to make this happen, every day we look at new

ways to leverage the best available technology. Every day

we explore new ways to partner with other businesses,

our community, stakeholders and retailers. Every day

we look for new ways to improve customer service for

passengers. The Airport community is working together to

build a transportation facility that goes beyond service to

travelers, by offering amenities and services that appeal

to the surrounding community and make the Airport a

destination itself for all to visit and enjoy. Very significant

strides were taken in 2005 to prepare for the next stage

of our evolution.

We have been recognized with three top place finishes

in the AETRA airport customer satisfaction survey for

the second year in a row. Against such world renowned

airports as London (Heathrow), Sydney (Australia), Beijing,

Denver and Amsterdam, as well as other Canadian airports

including Vancouver, Edmonton, Ottawa and Toronto,

Halifax International Airport was rated as the best airport

in the Americas of any size for overall satisfaction, the best

domestic airport in the world, and placed first worldwide

with under five million passengers.

One of the milestones of 2005 was the celebration of the

renamed Robert L. Stanfield Terminal Building in honour

of one of Nova Scotia’s most distinguished native sons,

the Right Honourable Robert L. Stanfield, who passed

away on December 16, 2003. An official ceremony unveiling

the new name was held in the Airport’s Observation

Flight Deck on September 9, 2005. While Stanfield never

sought honours or such recognition during his lifetime, the

Robert L. Stanfield Terminal Building at Halifax International

Airport serves as a fitting tribute to his integrity and

principles that made our province and country stronger.

I’m proud to have joined the Halifax International Airport

community.

My vision for the Airport’s future is one without limits. The

opening of U.S. pre-clearance, new construction, including

a new hotel and parking facilities, and the completion of

runway upgrades, are just the beginning. The year 2005

set the stage for our journey onward and upward.


Our staff has risen to

the challenges that a

larger facility presents.

Charles Clow

PROJECT COORDINATOR


Improving HALIFAX

INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT

Facilities and Services

Bigger, better and safer – that was the focus of HIAA’s

Airport Improvement Program during 2005.

Throughout the year, the terminal building expansion

program was in full swing. To the south, the terminal was

transformed into a dedicated commuter facility, housing

three new jet bridges, 12 new gates, a rotunda feature with

terrazzo floor, larger waiting areas, improved ground

access to aircraft, and more room for new retail shops and

passenger services. To the north, work progressed on the U.S.

pre-clearance and in-transit facilities, scheduled to open

in October 2006.

A new Park’N Fly service opened in February with an

additional 1,000 parking spaces, offering passengers more

choice and a 24-hour shuttle to the terminal.

In September, HIAA, along with airports across the country,

installed new state-of-the-art baggage processing

technology, resulting in increased efficiencies in baggage

processing for the airlines and ground service providers,

along with increased overall baggage handling capacity.

Working with the Canadian Air Transport Security Authority,

this equipment enables new screening procedures for

checked baggage to ensure passenger security.

“With all of this development comes increased responsibility

for operation and maintenance,” says Peter Clarke, Vice

President Operations. “Our staff has risen to the challenges

that a larger facility presents because they know that

growth means success for our business.”

Also in 2005, HIAA began the first phase of its multiyear

airfield rehabilitation program. This work is vital to

maintaining the integrity and operation of Airport runways

that are reaching the end of their lifecycle, to ensure safety

and meet regulatory standards. In July, at a critical phase in

the project when the Airport’s instrument landing system

was unavailable to pilots, severe and unanticipated dense

fog caused major flight delays and cancellations. Going

forward, HIAA is committed to keeping the traveling public

informed about potential impacts of construction activity.


Leveraging HALIFAX

INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 10

Technology

As our facilities expand, so does our horizon. Throughout

the planning and construction phases of our Airport

Improvement Program, priority was given to utilizing

technology to modernize facilities, improve processes, and

maximize efficiencies.

“This year we installed systems that made a real difference

in the way we operate – improvements that will have a

direct impact on the experience of our airline partners,

our tenants, and our guests,” says Michael Healy, Vice

President Infrastructure & Technology.

Much of this work was focused on bringing in a system

of Common Use Terminal Equipment. In the past, most of

the equipment at the Airport had been proprietary to the

airlines themselves – everything from check-in systems

to loading bridges were operated by the airlines. Other

advancements include new security systems, information

technology fibre optics, and a public address system, with

more enhancements to come.

“Now the Airport has shifted to technically advanced

systems run by us. In 2005 we initiated programs to take

over ticket counters, gates, loading bridges, and now we

operate and maintain them on behalf of all the airlines,”

says Healy. “The result – better service for our passengers

and more flexible operations for our airline partners.”


This year we installed systems

that made a real difference

in the way we operate.

Malcolm Phippen

MAINTENANCE


It’s our people that really make

the difference at this Airport.

Kelly Martin

Customer Relations Manager


Enhancing HALIFAX

Customer Service

INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 13

In Nova Scotia, the one thing you can count on is the

weather. Snowstorms, hurricanes, fog, rain. We have it

all. In all kinds of weather, for all kinds of reasons, airline

passengers spend unanticipated time in airports. “It’s our

job to make that wait as comfortable as possible,” says

Kelly Martin, Customer Relations Manager.

“You’d be surprised how much we’ve learned about

keeping airline passengers happy. Something as simple

as a bottle of water or a deck of cards can make the

wait a little more bearable,” says Martin. That is why the

Airport Authority stocks necessities such as blankets, baby

food and other supplies, and makes movies available to

help entertain delayed passengers.

“And most importantly, we have a team of volunteers who

seem to know exactly what to say, or when to offer help,”

says Martin. “In times when there are delays and it seems

like passengers are most in need of a friendly face, they’re

there, doing what they can to make the wait easier.”

Launched in 2000, HIAA’s Volunteer Host Program proved

to be an invaluable asset again in 2005, with almost

100 volunteers logging more than 15,520 hours serving

passengers and visitors. The tartan-vested volunteers

are on hand daily to meet and greet visitors, providing

information about and directions to facilities, services and

retail stores. They also provide extra assistance to people

with special needs. These volunteers are the first and last

impression for many visitors to Nova Scotia.

The Airport’s commitment to customer service is what sets

us apart. And it’s a major reason why the Airport has been

recognized internationally for its quality service with three

top place AETRA customer service rankings for the second

year running. Halifax International Airport was rated as

the best airport in the Americas of any size for overall

satisfaction, the best domestic airport in the world, and

placed first worldwide with under five million passengers.

This annual survey was conducted by the International

Air Transport Association and co-sponsored by Airports

Council International.

“We work closely with our volunteers, Visitor Information

Centre, airlines, and retail partners to uphold a high

standard of customer service. We’re the first airport in

North America to achieve Superhost status – a worldwide

recognition of customer service. We’ve had colleagues

from around the world visit our Airport to learn what we’re

doing right. Other airports might have more resources

and more facilities, but it’s our people that really make

the difference at this Airport,” says Martin.


Richard Garson

AIR SERVICE SPECIALIST


Increasing HALIFAX

INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 15

Air Service

HIAA is committed to improving service to both carriers and

passengers alike. For the sixth consecutive year since

management of the Airport was transferred from the federal

government to the community, landing and terminal fees were

not increased. HIAA is sensitive to the financial pressure

on the entire industry to meet changing market demands,

and will continue to maintain the decreased domestic

landing and terminal fees introduced in January 2005.

Improved and expanded air service and new partnerships

marked our air service development efforts in 2005.

Air Canada and Air Canada Jazz improved service to both

Boston and Goose Bay by upgrading turbo prop service

to regional jets. CanJet added frequencies to Toronto,

St. John’s and Deer Lake. CanJet and WestJet introduced

daily service to winter vacation destinations. Also in 2005,

WestJet added daily direct service to Calgary and increased

frequency to Toronto and St. John’s.

In 2005 we became partners with Finnair, as they began

technical service stops between Finland and winter sun

destinations.

Zoom added a Belfast seasonal service to Halifax on a trial

basis in 2005, and announced a year round weekly service

between London (Gatwick) and Halifax.

Provincial Airlines, Condor, Northwest Airlines, Thomas Cook,

American Eagle, Canadian Affair, and Continental Airlines all

increased service through Halifax.

On March 11, 2005, Jetsgo’s bankruptcy meant the loss

of 19 flights a week to Toronto. While this is a well served

route from Halifax, losing a carrier is always disappointing

for the Airport and the community.

By the end of the year, the total number of passengers

processed through the Airport remained level with 2004

at 3.2 million. While air cargo activity was down 17 per

cent over 2004, due to the loss of MK Airlines and Polar

Air Cargo focusing on China routes, positive developments

included the return of Icelandair Cargo and Air Canada’s

dedicated freighter in October.

HIAA entered into a partnership with the Nova Scotia

Department of Tourism, Culture and Heritage in 2005,


Increasing

HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 16

Air Service

continued

to raise awareness and develop additional air service to

European destinations.

As well, HIAA’s business development team organized its

second Air Access Forum, bringing together some 150

participants representing airlines, airports and business

partners, to meet and discuss growth opportunities.

“What’s most important for us is that we understand the

needs of the carriers, and match that with the needs of

our community stakeholders. This forum and the many

others we attend around the world, provide us with an

opportunity to consult and determine the right services

to bring to Halifax,” says Jerry Staples, Vice President

Marketing & Business Development.

New retail outlets, a car rental service centre currently

under construction, land development projects, and other

new amenities are all part of the plan to improve services.

“We feel a responsibility to our community, and to the

region, to be ambassadors and to provide the services this

area needs as it grows. With U.S. pre-clearance on the

horizon, and the recent developments on the Canada-U.S.

Open Skies Agreement, the stage is set for positive growth

at Halifax International Airport. When the region grows,

we grow,” says Staples.


Airlines and Direct Destinations in 2005

HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 17

SCHEDULED PASSENGER SERVICES

16 Domestic

Destinations

Calgary, AB

Charlottetown, PE

Deer Lake, NL

Fredericton, NB

Gander, NL

Goose Bay, NL

Hamilton, ON

Moncton, NB

Montreal, QC

Ottawa, ON

Quebec, QC

Saint John, NB

St. John’s, NL

Stephenville, NL

Sydney, NS

Toronto, ON

CHARTER AIR CARRIERS

5 Charter Air Carriers

Air Transat

Condor Flugdienst

Skyservice

Thomas Cook (UK) Airlines

Zoom Airlines

6 Transborder (USA)

Destinations

Boston, Massachusetts

Detroit, Michigan

Newark, New Jersey

New York (JFK), New York

Orlando, Florida

St. Petersburg, Florida

3 International

Destinations

Hamilton, Bermuda

London (Heathrow),

United Kingdom

St. Pierre et Miquelon

CHARTER PASSENGER SERVICES

15 International Destinations

Cuba

Camaguey

Cayo Coco

Holguin

Varadero

Dominican

Republic

La Romana

Puerto Plata

Punta Cana

Germany

Frankfurt

Munich

CARGO CARRIERS

7 Cargo Carriers

Air Canada

CargoJet

Icelandair

Kelowna Flightcraft

Morningstar Express

Prince Edward Air

Provincial Airlines

Jamaica

Montego Bay

Mexico

Cancun

United

Kingdom

Belfast

Glasgow

London (Gatwick)

Manchester

SCHEDULED PASSENGER

AIR CARRIERS

7 Domestic Air Carriers

Air Canada

Air Canada Jazz

Air Georgian

CanJet Airlines

Jetsgo (discontinued in March 2005)

Provincial Airlines

WestJet Airlines

6 Transborder (USA) Air Carriers

American Eagle

Air Canada Jazz

CanJet Airlines

Delta Airlines

Continental Express

Northwest Airlines

1 International Carrier

Air St. Pierre


HIAA values

its role in the

community, and

its employees

are actively

involved as well.

Joyce and John Patriquin

VOLUNTEER HOSTS


Strengthening HALIFAX

INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 19

Community Partnerships

HIAA values its role in the community, and its employees

are actively involved as well.

In 2005, HIAA employees raised over $12,000 for such

organizations as the United Way; Nova Scotia amateur

sport, entering a team in the annual dragon boat race;

Breast Cancer Research, participating in a casual day

promotion; and the Parker Street Food and Furniture

Bank, by donating school supplies and food. Through

its Community Outreach Program, HIAA supported over

200 organizations with close to $137,000 in corporate

donations, as well as promotional items and public display

space in the terminal building.

Through the Humanities Fund, members of the Union of

Canadian Transportation Employees Local 80829 contribute

$.01 for each hour worked and HIAA doubles that

contribution. In 2005 the Humanities Fund donated $6,750

to seven organizations chosen from employee suggestions.

In June, HIAA signed on as one of the first members

of Nova Scotia’s Come to Life campaign charter, pledging

to promote Nova Scotia and its attributes wherever they

do business. HIAA is also an active member of the

Halifax Gateway Council, a not-for-profit organization

established to promote growth in the transportation

sector and related industries in the region. In 2005, the

Council completed two major studies – a Strategic Plan

and an Economic Impact Study – setting the stage for

further advocacy and activities that will help position

Halifax as an international gateway to the world.

Again in 2005, Halifax International Airport hosted the

Nova Scotia International Air Show (NSIAS). Through ongoing

consultation between the NSIAS Organizing Committee,

HIAA, and all airlines, this community event was successfully

held with minimal disruption to commercial activity.

To better understand the community we serve, all HIAA

employees underwent diversity training in 2005. As well,

our Employment Equity/Diversity Action Team completed

an employment systems analysis, which will form the basis

of an employment equity plan.

As a responsible member of the corporate community, HIAA

follows best practices for the environment, with ongoing

attention to water treatment, and workplace health and

safety, with a focus on reducing workplace injuries. Airport

security is always a priority, and in 2005, HIAA developed

iWatch, a unique airport community-wide security action

program. The iWatch program was developed to build and

sustain an active security culture within the Airport community,

by increasing employee awareness, understanding and

reporting of suspicious activity.


Sustaining

Financial Stability

HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 20

Halifax International Airport is a significant economic

force for the region. In November, HIAA released the

results of an economic impacts study conducted by SGE

Acres Limited. The report concluded that the Airport and

its aviation community generated $1.135 billion in gross

output in 2004, and achieved consistent growth over the

past 15 years.

“As the Airport operator, HIAA plays a major role in the

Airport’s impact on our economy,” says Joyce Carter, Vice

President Finance. “We initiate construction, capital

improvements, and bring in new business, but it is the

contribution of the entire Airport community that makes

Halifax International Airport such an economic driver.”

For HIAA’s part, 2005 was a year marked by construction,

technology improvements and better airline service. In the

long term, it has set the stage for the services that we will

provide to both air carriers and passengers.

Financial Overview

Operating revenue for 2005 was $34.4 million compared

to $33.2 million in 2004. A number of factors contributed

to this increase in revenue. Positive impacts included the

opening of a Park’N Fly lot in February, representing an

additional $617,000 in revenue, and a gain of $1.2 million

due to the elimination of the Transport Canada final

chattels repayment, as announced in May by the federal

government under the new rent policy. This was offset by

several factors negatively impacting revenue, including

shifts in air service by major carriers, the bankruptcy of

Jetsgo, and the reduction of international cargo flights.

Airport Improvement Fee revenue in 2005 was $11.7

million, up slightly from $11.4 million in 2004.

Operating expenses increased in 2005 to $32.4 million

compared to $30.0 million in 2004. These increased

expenses are mainly related to the operation of Park’N Fly,

increases in amortization due to a larger asset base,

property taxes under the transition year of our development

grant agreement with Halifax Regional Municipality

(to stabilize after 2005), contract salary increases, and

inflationary increases in the cost of goods and services.

Looking ahead, 2006 will be a year of building our

future and managing our growth. We will complete the

air terminal building expansion, including the opening

of U.S. pre-clearance. As well, we will commence the

planning and design for a parkade, develop and implement

a comprehensive revenue diversification strategy, develop

and introduce an integrated risk management strategy,

and complete a succession planning framework. An

ambitious financial plan is in place for 2006, and does

not include any change in general terminal and aircraft

landing fees.


It’s the contribution

of the entire Airport

community that makes

Halifax International

Airport such an

economic driver.

Twila Grosse

SUPERVISOR MANAGEMENT ACCOUNTING


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 22

Financial Statements

Auditor’s Report

Balance Sheet

To the Directors of

Halifax International Airport Authority

We have audited the balance sheet of Halifax International Airport Authority

as at December 31, 2005 and the statements of operations and changes in

net assets and cash flows for the year then ended. These financial statements

are the responsibility of the Authority’s management. Our responsibility is to

express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing

standards. Those standards require that we plan and perform an audit to obtain

reasonable assurance whether the financial statements are free of material

misstatement. An audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made by

management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects,

the financial position of the Authority as at December 31, 2005 and the results

of its operations and its cash flows for the year then ended in accordance with

Canadian generally accepted accounting principles. As required by the Canada

Corporations Act, we report that, in our opinion, these principles have been

applied on a basis consistent with that of the preceding year.

In thousands of dollars

Year ended December 31

ASSETS

Current

Cash

Accounts receivable

Inventories

Prepaid expenses

Capital assets [note 3]

LIABILITIES AND NET ASSETS

Current

Accounts payable and accrued liabilities

Deferred revenue [note 9]

Current portion of long-term debt [note 4]

Long-term debt [note 4]

Accrued benefit liability [note 7]

Security deposits

Net assets

Equity in capital assets [note 5]

2005

$

6,065

5,380

320

570

12,335

117,935

130,270

24,227

736

26,081

51,044

724

46

1,887

53,701

76,569

2004

$

8,779

2,944

329

500

12,552

63,328

75,880

7,937

226

1,303

9,466

1,885

--

1,603

12,954

62,926

Halifax, Canada

February 10, 2006

Chartered Accountants

Commitments [note 6]

See accompanying notes

130,270

75,880

On behalf of the Board:

Director

Director


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 23

Statement of Operations and Changes in Net Assets

In thousands of dollars

Statement of Cash Flows

In thousands of dollars

Year ended December 31

2005

$

2004

$

Year ended December 31

2005

$

2004

$

REVENUES

Landing fees

Terminal and passenger security fees

Concessions

Parking

Rentals

Other [note 4]

Airport improvement fees [note 5]

OPERATING EXPENSES

Salaries, wages and benefits

Materials, services and supplies

General and administrative

Ground lease rent

Amortization

Property taxes

8,595

8,291

7,789

5,368

2,018

2,299

34,360

11,707

46,067

11,042

9,061

3,412

4,361

3,361

1,187

32,424

9,227

8,759

7,580

4,390

2,093

1,167

33,216

11,437

44,653

10,683

8,001

3,428

4,240

2,795

861

30,008

OPERATING ACTIVITIES

Excess of revenues over expenses

Items not involving cash:

Amortization

Net change in non-cash working capital

balances related to operations

Cash provided by operating activities

INVESTING ACTIVITIES

Expenditures on capital assets

Cash used in investing activities

FINANCING ACTIVITIES

Proceeds of long-term debt

Repayments of long-term debt

Cash provided by (used in) financing activities

(Decrease) increase in cash

Cash, beginning of year

13,643

3,361

3,949

20,953

(48,581)

(48,581)

26,000

(1,086)

24,914

(2,714)

8,779

14,645

2,795

231

17,671

(12,438)

(12,438)

427

(3,265)

(2,838)

2,395

6,384

Excess of revenues over expenses

Net assets, beginning of year

13,643

62,926

14,645

48,281

Cash, end of year

6,065

8,779

Net assets, end of year [note 5]

76,569

62,926

See accompanying notes

See accompanying notes


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 24

Notes To Financial Statements

December 31, 2005

1. General

The Halifax International Airport Authority (the “Authority”) was incorporated on November

23, 1995 as a corporation without share capital under Part II of the Canada Corporations Act.

On February 1, 2000, the Authority signed a 60-year ground lease with Transport Canada

and assumed responsibility for the management, operation and development of the Halifax

International Airport. Excess revenues over expenses are retained and reinvested in airport

operations and development.

The Authority is a dynamic and multi-faceted aviation enterprise that provides air access to the

world, facilitates personal and business connections and promotes regional economic growth.

The Authority is governed by a Board of Directors whose members are nominated by the Halifax

Regional Municipality, the Province of Nova Scotia and the Federal Government, as well as the

Halifax Chamber of Commerce. The nominated members can also appoint additional members

who represent the interests of the community.

The Authority is exempt from federal and provincial income tax, federal large corporation tax,

and Nova Scotia capital tax.

2. Significant Accounting Policies

The Authority’s financial statements have been prepared in accordance with Canadian generally

accepted accounting principles. The preparation of financial statements requires management

to make estimates and assumptions that affect the reported amounts of certain assets and

liabilities at the date of the financial statements and the reported amounts of certain revenues

and expenses during the year. Actual results could differ from those estimates.

Inventories

Inventories consist of materials, parts and supplies and are stated at the lower of cost determined

on an average cost basis and estimated replacement cost.

Ground lease

The ground lease with Transport Canada is accounted for as an operating lease.

Capital assets

Capital assets are recorded at cost including interest on funds borrowed for capital purposes,

net of contributions and government assistance and are amortized over their estimated useful

lives on a straight-line basis as follows:

Assets

Rate

Computer hardware and software 20% - 33%

Leasehold improvements 2.5% - 10%

Machinery, equipment, furniture and fixtures 5% - 20%

Vehicles 5% - 17%

Construction in progress is recorded at cost and is transferred to leasehold improvements

when the projects are complete and the assets are placed into service.

Revenue recognition

Landing fees, terminal fees, parking revenues and passenger security fees are recognized as

the airport facilities are utilized. Concession revenues are recognized on the accrual basis and

calculated using agreed percentages of reported concessionaire sales, with specified minimum

guarantees where applicable. Rental revenues are recognized over the lives of respective leases,

licenses and permits. Airport improvement fees (“AIF”) are recognized when originating departing

passengers board their aircraft as reported by the airlines.

Deferred revenue consists primarily of concession revenue for minimum guarantees and license

fees received in advance of services being rendered.

Employee benefit plans

The Authority sponsors a pension plan on behalf of its employees which has defined benefit

and defined contribution components. In valuing pension obligations for its defined benefit

component, the Authority uses the accrued benefit actuarial method prorated on services and

best estimate assumptions. Pension plan assets are valued at current market values. The excess

of the accumulated net actuarial gain or loss over 10% of the greater of the accrued benefit

obligation and the fair value of the plan assets is amortized over the average remaining service

life of employees. Defined contribution component amounts are expensed as incurred.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 25

3. Capital Assets

4. Long-term Debt

In thousands of dollars

Computer hardware and software

Leasehold improvements

Machinery, equipment, furniture

and fixtures

Vehicles

Construction in progress

In thousands of dollars

Computer hardware and software

Leasehold improvements

Machinery, equipment, furniture

and fixtures

Vehicles

Construction in progress

Cost

$

2,472

72,100

4,025

7,609

43,537

129,743

Cost

$

1,935

49,080

3,363

6,180

11,228

Accumulated

Depreciation

$

1,587

5,542

1,514

3,165

--

11,808

Accumulated

Depreciation

$

1,273

3,528

1,110

2,547

--

2005

$

Net Book

Value

$

885

66,558

2,511

4,444

43,537

117,935

2004

$

Net Book

Value

$

662

45,552

2,253

3,633

11,228

In thousands of dollars

Halifax Regional Municipality deed transfer tax loan,

unsecured, non-interest bearing, repayable in monthly

installments of $5,633.

Canadian Imperial Bank of Commerce Construction

installment loan, bearing interest at prime rate less 65

basis points.

Transport Canada deferred rent, non-interest bearing,

repayable in monthly installments of $6,700 commencing

in 2006. (See note (d) below)

Current portion of long-term debt (See note (b) below)

2005

$

--

26,000

805

26,805

26,081

724

2004

$

6

--

3,182

3,188

1,303

1,885

(a) Credit Facilities

The Authority has authorized credit facilities with the Canadian Imperial Bank of Commerce

for $78 million, which, in the event of default, will be secured by an Agreement containing

a fixed mortgage by way of sublease of the Authority’s interest in the lease with Transport

Canada, and a security interest in all of the other assets of the Authority. This security is not

registered, recorded or filed in any public registry until an event of default has occurred. The

credit facilities consist of an operating line of credit to a maximum of $3.0 million bearing

interest at prime rate less 70 basis points. A demand installment loan to finance construction

costs is available to a maximum of $75.0 million and bears interest at prime rate less 65

basis points.

71,786

8,458

63,328

(b) Current Portion of Long-Term Debt

The terms of the construction installment loan only require repayment as agreed by the Bank

and the Authority. The loan amount is shown as current, as repayment terms have not been

agreed upon and although not expected, the loan could be demanded. This amount will form

part of a long-term financing arrangement which the Authority is currently in the process of

negotiating.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 26

Notes To Financial Statements

December 31, 2005

continued

4. Long-term Debt (continued)

(c) Capitalized Interest

Interest on long-term debt of $260,596 (2004 - $24,060) was capitalized as part of

construction in progress during the year.

(d) Forgiveness of Debt

During 2005, Transport Canada agreed to forgive $1.2 million (2004 - $nil) of debt.

This amount is included in other revenue.

Net assets of the Authority as at December 31 are as follows:

In thousands of dollars 2005

$

Net assets provided by airport improvement fees

Net assets provided by other operations

Net assets, end of year

50,366

26,203

76,569

2004

$

38,659

24,267

62,926

5. Airport Improvement Fees

On January 1, 2001, the Authority implemented an AIF of $10 per local boarded passenger to

fund the cost of a major capital program. These fees are collected by the air carriers for a fee

of 6% under an agreement between the Authority, the Air Transport Association of Canada,

and the air carriers serving Halifax International Airport. Under the agreement, AIF revenues

may only be used to pay for the capital and related financing costs as jointly agreed with air

carriers operating at the airport.

A summary of the AIF collected and capital and related financing expenditures are as follows:

6. Commitments

Transfer agreement

On May 9, 2005, the Government of Canada announced the adoption of a new rent policy

that will result in reduced rent for Canadian airport authorities, including Halifax International

Airport Authority. This reduced rent will be phased in over four years beginning in 2006, with

the new formula achieving its full impact in 2010. The new formula is based on percentage

of gross revenues on a progressive scale. The Authority finalized the amendment to its ground

lease with Transport Canada in December 2005.

In thousands of dollars

AIF revenue (net):

AIF revenue

AIF collection costs

Expenditures

Excess of expenditures over AIF revenue

Excess of expenditures over AIF revenue, beginning of year

Excess of expenditures over AIF revenue, end of year

2005

$

12,459

(752)

11,707

50,398

38,691

21,034

59,725

2004

$

12,299

(862)

11,437

14,859

3,422

17,612

21,034

Rent payable under the old ground lease with Transport Canada included base rent calculated

on a formula reflecting annual passenger volumes, annual revenues, and predetermined base

operating costs. Base rent was calculated on a capped passenger volume formula subject

to adjustments for inflation. The estimated lease obligations over the next five years are

approximately as follows:

2006 $4,271

2007 4,093

2008 3,825

2009 3,290

2010 3,500

Construction in progress

At December 31, 2005, the Authority had outstanding contractual construction commitments

amounting to approximately $11.0 million (2004 - $3.0 million).

From January 1, 2001 to December 31, 2005, the cumulative capital expenditures totaled

$110,091,000 (2004 - $59,693,000) and exceeded the cumulative amount of AIF revenue

by $59,725,000 (2004 - $21,034,000).


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 27

7. Pension

The Authority sponsors a pension plan (the “Plan”) on behalf of its employees, which has

defined benefit and defined contribution components. The defined benefit component is for

former Transport Canada continuing full-time employees who were employed by the Authority

on February 1, 2000 and previously participated under the Public Service Superannuation Act

(“PSSA”) Plan. However, these employees had the option to elect to become members of the

defined contribution component in lieu of the defined benefit component. All other employees

will become members of the defined contribution component. An actuarial valuation has been

prepared as of January 1, 2003, for purposes of funding the Plan.

The existing Government of Canada pension assets and accrued benefits obligation for certain

employees have been transferred to the Authority. The pension transfer agreement between

Transport Canada and the Authority was finalized during 2004 and the total pension liability

has been transferred, fully funded to the Authority. As at December 31, 2005, $11,691,000

(2004 - $6,258,000) in assets had been transferred to the Authority for pensionable service

prior to the effective date of February 1, 2000.

The following table provides information concerning the accrued benefit obligation, plan assets,

funded status and prepaid (accrued) pension costs of the plan as at December 31, 2005:

The significant actuarial assumptions adopted in measuring the Authority’s accrued pension

benefits are as follows:

2005

%

2004

%

Discount rate

Expected long-term rate of return on plan assets

Rate of compensation increase

5.25

6.75

4.00

Other information related to the Authority’s defined benefit component is as follows:

In thousands of dollars

Employer contribution

Employees’ contribution

Benefits paid

2005

$

573

205

93

Pension expense for 2005 amounted to $136,000 (2004 - $90,000) for the defined

contribution component and $618,000 (2004 - $579,000) for the defined benefit component.

6.25

7.00

4.00

2004

$

579

204

81

In thousands of dollars 2005

$

Plan assets

Accrued benefit obligation

Funded status – plan (deficit) surplus

Unamortized net actuarial (loss) gain

Accrued benefit liability

18,785

(20,147)

(1,362)

(1,316)

(46)

2004

$

11,135

(10,992)

143

143

--

Equity securities

Fixed income securities

Real estate securities

Other

2005

%

57

31

8

4

100

Plan Assets

2004

%

63

33

4

--

100


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 28

Notes To Financial Statements

December 31, 2005

continued

8. Financial Instruments

Fair value

The Company’s primary financial instruments consist of cash, accounts receivables and accounts

payable and accrued liabilities. The difference between the carrying values and the fair market

values of the primary financial instruments are not material due to their short term maturities.

At December 31, 2005, the fair value of long-term debt was $641,000 (2004 - $2,900,458)

relative to the carrying value of $724,000 (2004 - $3,188,581).

The fair values of long-term debt were estimated based on the present value of contractual

future payments of principal and interest, discounted at the current market rates of interest

available to the Authority for similar debt instruments.

Credit risk

The Authority is subject to credit risk through its accounts receivable. A significant portion of the

Authority’s revenues, and resulting receivable balances, are derived from airlines. The Authority

performs ongoing credit valuations of receivable balances and maintains reserves for potential

credit losses.

9. One-Time Marketing Grant

In 2005, the Authority received a one-time marketing grant from the Government of Nova

Scotia in the amount of $600,000. The grant can be used to undertake specific marketing

activities to increase the air connections and routes between the United Kingdom, Germany,

the Netherlands and Nova Scotia, that use Halifax International Airport. The grant is being

amortized to income as expenses are incurred. As at December 31, 2005, $102,000 has been

credited to income, with the remaining $498,000 credited to deferred revenue.

10. Comparative Figures

The comparative financial information has been reclassified to conform to the presentation

adopted for 2005.


2005 Board of Directors

HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 29

Chair:

Bernard F. Miller

Vice Chair:

Frank Matheson

Secretary:

James S. Cowan

Director:

Norbert Comeau

Director:

Carole Cushing

Director:

Paul Gurr

Director:

Peter McDonough

Director:

Cheryl Newcombe

Director:

Roy Rideout

Director:

Robert J. Scott

Director:

Fred Smithers

Director:

Ken Streatch

Director:

Stephen L. Wallace

Director:

J. Robert Winters

Executive Management

President & CEO: Eleanor Humphries Vice President Finance: Joyce Carter Vice President Operations: Peter Clarke

Vice President Infrastructure & Technology: Michael Healy

Vice President Marketing & Business Development: Jerry Staples

Director Human Resources: Lydia Bowie

Director Communications & Public Affairs: Gina Connell

Corporate Counsel: John MacLean


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 30

Board of Directors

continued

Bernard F. Miller – Chair

Bernie has been Chair of the Airport Authority Board for the past 10 years. He was the

Authority’s chief negotiator during the transfer negotiations with Transport Canada

which brought the airport under local control, and also served as the Airport’s CEO

for much of the first year after transfer. He assumed the CEO role again in 2005 from

February until August. He retired as Chair at the end of 2005 and will continue to

serve on the Board as past Chair in 2006. Bernie previously enjoyed a 35-year

career with Air Canada, where he held a number of senior executive positions. He

retired from the airline in 1991 as Vice President, In-Flight Service for Air Canada’s

worldwide operations.

Frank Matheson – Vice Chair

Frank is President and CEO of Homburg Canada Inc., an international real estate

company with holdings in residential, commercial, industrial, and retail properties.

Frank is a past Chair of the Halifax School Board and the Halifax Forum Commission,

and has served on many community and industry-related boards and commissions.

Frank became Chair of the HIAA Board on January 1, 2006.

James S. Cowan, QC – Secretary to the Board

Jim is a member of the Senate of Canada and partner of the law firm Stewart McKelvey.

He is the Chair of the Board of Governors of Dalhousie University and past Chair of the

Atlantic Provinces Transportation Commission. Upon his appointment to the Senate

in March of 2005, Jim resigned from the HIAA Board, but continues as Secretary, a

position he has held since 1995.

Norbert Comeau – Director

Norbert had a lengthy career as a school administrator with the Provincial Acadian

School Board. He has served as a member of the Nova Scotia Human Rights Commission

and chaired the organizing committee for FANE (Acadian Federation of Nova Scotia).

He has always been active as an entrepreneur and provided leadership to numerous

organizations in the community of Clare.

Carole Cushing – Director

Carole is the former Senior Vice President and Managing Director and Atlantic Division

Manager for BMO Nesbitt Burns Inc., where she was responsible for the Private Client

Division in the four Atlantic Provinces, and provided leadership to ten branch managers

throughout the region. Carole has served as Chair of the Board of Governors of Mount

Saint Vincent University, Trustee of the IWK Grace Health Centre Foundation, and Chair

of the IWK’s Investment Committee.

Paul Gurr – Director

Paul is the former President for Labatt Breweries Atlantic, and serves on a number of

professional and community boards, including the Halifax Chamber of Commerce, the

advisory board of the Frank H. Sobey Faculty of Commerce at Saint Mary’s University,

and the Canadian Centre for Ethics in Public Affairs. He also participates on the Board

of Governors for Junior Achievement, and the Executive Forum of Nova Scotia. Paul is

currently a full-time business graduate student at Saint Mary’s University.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 31

Peter McDonough, QC – Director

Peter is a senior partner at McInnes Cooper, and has been in practice for over 30 years

in the areas of property development and real property (commercial and residential).

He has served on the Board of Governors of Dalhousie University, Nova Scotia College

of Art and Design, Special Olympics, and the YMCA. He was the Co-Chair of the Halifax

Industrial Commission and is the founding President of the Dalhousie Black and

Gold Club.

Cheryl Newcombe – Director

Cheryl joined the HIAA Board in June 2005. She is the Comptroller of Lighthouse

Lumber Wholesalers Limited in Dartmouth, a position she has held since 2002. Cheryl

is also on the Board of Beacon House and is the immediate past Chair of the Halifax

Regional Water Commission. Cheryl is a nominee of Halifax Regional Municipality.

Roy Rideout – Director

Roy is past Chairman and CEO of Clarke Inc., a publicly traded company in the

transportation industry. He is also a Director of Oceanex Income Fund, Fortis Inc. and

NAVCANADA. Prior to 1988, Roy held senior executive positions with both Eastern

Provincial Airways and Canadian Airlines International for 15 years. Roy is a chartered

accountant.

Robert J. Scott – Director

Bob is Executive Vice President of Glenora Distillers International Ltd. and is a former

Director of the Small Business Development Corporation for the province of Nova Scotia.

Fred Smithers – Director

Fred is the President and CEO of the Secunda Group of Companies, and the Honorary

British Consul for the Maritime Provinces. He is a Director of ProGear, a golf club

manufacturing company, and President and Owner of Granite Springs Golf and Country

Club. He sits on the Board of Directors of Barrington Wind Energy, the IWK Hospital

for Children, and the World Wildlife Fund of Canada, and is on the Board of Governors

for Saint Mary’s University.

Ken Streatch – Director

Ken has over 30 years of senior management experience in both business and

government. He is the President and CEO of Sunberry Cranberry Producers Inc., and

Chairman of the Board of Atlantic Canada Cranberries Inc. Ken has held a number of

portfolios with the government of Nova Scotia, including Minister of Transportation

and Communications and Minister of Economic Development.

Stephen L. Wallace – Director

Stephen is President of the Bedford-based consulting firm Terrain Group Inc. He is a

former Director of the Nova Scotia chapter of the Urban Development Institute and

past President of the Consulting Engineers of Nova Scotia.

J. Robert Winters, QC – Director

Robert is counsel to Burchell MacDougall, Barristers & Solicitors of Truro, Nova

Scotia, and Chairman of Napwick Holdings Limited, a private holding company, past

Chairman of the Board of Regents of Mount Allison University, and a member of the

advisory boards of the Bragg Group of Companies and Inland Technologies Inc.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 32

Corporate Governance

Halifax International Airport Authority is a dynamic and multi-faceted aviation enterprise

that provides air access to the world, facilitates personal and business connections,

and promotes regional economic growth.

The Airport Authority is governed by a Board consisting of a maximum of 14 Directors

nominated by the following entities:

Federal Government 2

Provincial Government 1

Halifax Regional Municipality 4

Halifax Chamber of Commerce 3

HIAA Board of Directors 4

Generally, a director may serve no more than a total of nine years from the date of

transfer, February 1, 2000. Collectively, directors are expected to possess knowledge

relating to the aviation industry, air transportation, business, finance, administration, law,

government, engineering, labour organizations, and the interests of consumers.

The Board oversees the conduct and operation of the Airport Authority; reviews and

approves corporate strategies, plans and financial objectives; appoints the Chief

Executive Officer; assesses the performance of the Board and the Chief Executive

Officer; ensures effective communication with the nominators and the community; and

ensures the effectiveness of the Airport Authority’s internal controls and systems in

preserving and enhancing the Airport Authority’s assets and pursuing its mission. The

Board meets as often as is required to carry out its responsibilities and maintains three

standing committees that make recommendations to the Board with respect to matters

within their jurisdiction: the Governance Committee, chaired by Robert Winters; the

Audit Committee, chaired by Roy Rideout; and, the Capital Projects Committee, chaired

by Peter McDonough. The Airport Authority has adopted conflict of interest guidelines

to govern the conduct of, and the disclosure and avoidance of conflicts of interest for, all

officers and directors. These disclosures are updated as required.

During 2005, the Governance Committee of the Board reported that there were no

breaches of the conflict of interest guidelines by any officer or director of the Airport

Authority.

Compensation of the senior officers and directors of the Airport Authority is reviewed

annually. Amounts paid to the Airport Authority’s officers and directors during

2005 follow.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 33

Board of Directors Total Compensation

Chair: B. F. Miller * $71,800

Vice Chair: F. Matheson $31,500

Secretary: J. S. Cowan $37,479

Directors:

N. Comeau $20,000

C. Cushing $19,200

P. Gurr $11,305

P. McDonough $22,400

C. Newcombe $3,728

R. Rideout $22,200

R. J. Scott $19,200

F. Smithers $12,800

K. Streatch $19,200

S. L. Wallace $22,531

J. R. Winters $17,600

*During the period February 1, 2005 to July 31, 2005, Mr. Miller, as Chair of the Board,

assumed the additional responsibilities of the CEO of the Airport Authority.

Executive Compensation

The salary range for the President & CEO and for each of the Vice Presidents of the

Airport Authority during 2005 was $98,800 to $250,000.

In addition to base salaries, annual bonus payments totaling $170,000 were paid during

the year. Bonus payments are contingent on individual and corporate achievements.

Contracts in excess of $92,600

Halifax International Airport Authority, in accordance with its ground lease with Transport

Canada, is required to report all contracts in excess of $92,600 ($75,000 in 1994

dollars adjusted for Consumer Price Index) which were entered into during the year

and that were not awarded on the basis of a public competitive tendering process. The

following contracts were in excess of $92,600 and were awarded without public tender:

• Terminal Systems International, Inc. for a gate management system in the amount

of $119,250.

• Miller Waste Systems for international waste management services for five years

with $118,220 paid in year one.

For the above two contracts, systems or services are of a proprietary nature with one

qualified supplier.

• Royal Canadian Mounted Police for policing services for five years for $3,579,527.

For the above contract, the supplier previously and satisfactorily performed service

which represented a cost saving.


HALIFAX INTERNATIONAL AIRPORT AUTHORITY 2005 ANNUAL REPORT 34

Five-Year Forecast

The following table outlines the passenger traffic and aircraft movements forecasted

over the next five years. These are the key drivers to our financial success, which will

enable us to provide the best airport facilities and services to the public and our

customers as we move onward and upward.

A C T U A L

F I V E - Y E A R F O R E C A S T

Year

2003 2004 2005 2006 2007 2008 2009 2010

Passenger Volume 2,973,187 3,242,389 3,229,111 3,347,330 3,510,633 3,677,451 3,788,473 3,899,079

Per cent Change 4.2 % 9.1 % -0.4 % 3.8 % 4.9 % 4.8 % 3.0 % 2.9 %

Total Aircraft Movements 88,228 89,845 86,393 89,935 93,533 96,151 98,363 100,625

Per cent Change 3.8 % 1.8 % -3.8 % 4.1 % 4.0 % 2.8 % 2.3 % 2.3 %

Planned Capital

Expenditures ($ 000’s)

Rent Payable to Transport

Canada ($ 000’s)

$ 8,598 $ 15,268 $ 57,881 $ 72,793 $ 57,511 $ 15,715 $ 18,483 $ 21,013

$ 3,191 $ 4,240 $ 4,361 $ 4,271 $ 4,093 $ 3,825 $ 3,290 $ 3,500


1 Bell Boulevard, Tel: 902.873.4422

Enfield, Nova Scotia Fax: 902.873.4750

B2T 1K2

www.halifaxairport.com

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