Vancouver’s idyllic Coal Harbour has become a morass of information, misinformation and cutthroat business negotiations.
Greg McDougall, CEO of the Harbour Air Group, is in a Mexican standoff with the managers of the new Vancouver Harbour Flight Centre (VHFC) terminal, lengthening a months-long battle that, critics argue, is really about a $9.50 fee.
“At the end of the day, it’s all about money,” explained Chris Danroth, owner of Tofino Air, which has been operating out of the VHFC since May.
McDougall, a veteran of B.C.’s staunchly competitive float-plane business, said it’s not that simple.
His companies, Harbour Air and West Coast Air, have spent the last several years hunkered down at a “temporary” dock next to the VHFC.
The dock, a collection of portable buildings, cedar planks and fuel lines, isn’t pretty, said McDougall, but it’s better than moving next door to the “state-of-the-art” VHFC and risking his business.
“We see it as the viability of our business,” said McDougall. “If we let the costs go up to the point where we can’t sustain or grow our business then we won’t survive.”
What he’s concerned about is the added fee his companies would have to pass on to customers should he move into the VHFC.
Originally, McDougall said the added per-passenger fee was in the order of $12 each way.
But Peter Clarke, president of Seair Seaplanes, said that’s just one of the many inaccurate statements published recently about the Coal Harbour clash.
“There’s a lot of inconsistencies and a lot of lies and a lot of untrue facts that have been published here recently depending on who you talk to,” said Clarke, whose company has also been flying out of the VHFC since it opened in May.
The actual rental rate for the VHFC, he said, is $9.50 one-way per customer.
Danroth confirmed that’s the rental rate he’s been charged as well.
But McDougall maintains the increase, any increase, could potentially strip his business of its competitive edge because he would have to pass on those costs to the customer.
Harbour Air and West Coast Air handle more than 90% of the 300,000 passengers who fly in and out of the harbour every year.
Harbour Air opponents argue the company is holding out at the temporary dock because McDougall wants to maintain his near-monopoly on the highly lucrative Vancouver-Victoria route.
In addition to buying out its largest competitor, West Coast Air, last year, Harbour Air is trying to build another float-plane terminal in Victoria that could lock out the competition (see “Harbour flight plan stalled” – issue 1126; May 24-30).
But McDougall is quick to respond to any accusations that he has an unfair advantage.
“It’s not fair to say, ‘you have 95% of the market and that’s some unfair advantage,’ the reality is anybody can come along and compete with us,” said McDougall. “The business we have we’ve earned and we’ve earned it through very hard work and good service and managing our expenses properly.”
But the mudslinging hasn’t stopped at fees and control of the market.
Harbour Air opponents argue that McDougall wants to stay at the temporary dock because he doesn’t pay anything to be located there. McDougall said that’s not true.
“I wish it was free,” he said.
The City of Vancouver, which recently extended the company’s licence in the area for an additional two years, said the value of that licence is in the “hundreds of thousands of dollars.”
McDougall also argues that the VHFC’s docks are too high, which could potentially damage planes and affect his company’s operations.
Danroth conceded the docks are a little high, saying that when large waves come in from passing ships they can cause the tail fin of the plane to smash against the dock.
He said it has happened once already, but his company has figured out a way to avoid it.
McDougall has called the VHFC “totally dysfunctional,” pointing to corroded fuel lines, a lack of space for customers and employees and huge cost overruns.
He said the dock cost BC Pavilion Corp., owners of the nearby convention centre, $22 million to build.
That’s far in excess of the $10 million he claims it could be built for.
And all the float-plane operators, no matter what side of the argument they fall on, have an opinion as to how the new dock could have been built better.
McDougall and his group have gone so far as to propose building a third non-profit terminal east of Canada Place.
The situation in Coal Harbour has deteriorated to such a point that the provincial government has stepped in, appointing BC Hydro chairman Dan Doyle to mediate talks between the opposing parties.
The province is also working on an engineering report focused on the VHFC, which McDougall hopes will determine if the new terminal is safe to operate from.
A source close to the report said it should be ready in about a week.
Meanwhile, the VHFC’s new tenants will continue to expand their businesses and add new routes, while McDougall will ferry the lion’s share of passengers from his temporary dock.
“This really has become a vital transportation ring for hundreds of thousands of people,” McDougall said. “It’s not just a bunch of guys with float planes anymore.” •
