YVR CEO Craig Richmond | BCBusiness
Craig Richmond, a former fighter pilot, was YVR's head of operations before becoming CEO in 2013.
How Vancouver International Airport—known to its friends simply as YVR—cracked the top five in this year's Ipsos/BCBusiness survey of B.C.'s most loved brands
On a busy Friday afternoon in late November, Vancouver Airport Authority president and CEO Craig Richmond power walks, and talks, down the main corridor of the international departures terminal—past a navy-clad Lufthansa crew and snaking queues at the check-in counters for Shenyang- and Seoul-bound flights. Richmond, who heads Canada’s second-busiest airport (behind Toronto’s Pearson), is responsible for the well-being of the 19.2 million passengers projected to pass through YVR this year and the 23,000 people who work, directly or indirectly, for the airport each day.
Amidst the stream of rolling luggage and carts, Richmond stops abruptly, crouches and picks up what appears to be a crumpled receipt, which he pockets before proceeding. Minutes later, he spots detritus on the terminal floor—this time a tissue—but decides to walk on. “That one’s for the folks with gloves.”
Since being spun off into a private entity by the federal government in 1992, YVR has emerged as a trendsetter in the industry, peddling to other airports everything from kiosks that automate the check-in process to software that simulates the ebb and flow of queues (international airlines haven’t always rotated their check-in counters but do so now thanks to YVR). Meanwhile, the Canada Line—which the authority paid $300 million to have extended across the length of its Sea Island property in 2009—has created the fastest fixed-link connection between a metropolitan airport and its associated downtown in North America.
But above all else, it is YVR’s laser-like focus on the customer experience—down to the cleanliness of its terminal floors—that keeps the airport ranked so highly among locals and visitors alike. In addition to being ranked fifth in our second annual B.C.’s Most Loved Brands survey (done in partnership with Ipsos; more details here), YVR is regularly recognized as the top airport in North America at the World Airport Awards, garnering satisfaction ratings of 85 to 95 per cent from internally conducted annual surveys.
The fact that YVR—indeed, any airport—is able to accomplish this is no small feat, for there are many moving parts that affect a traveller’s experience. Each day, YVR deals with 27 airline operators, two federal government agencies and U.S. Customs, plus dozens of retail businesses and a slew of independent contractors. From the cranky customs officer to the officious check-in clerk to the weather-related delays, there are countless opportunities for a customer to sour on an airport. The fact that YVR—the umbrella under which all that activity occurs—has been able to forge such a stellar reputation in that context is remarkable, says Brent McFerran, assistant professor of marketing at SFU’s Beedie School of Business. “Do consumers blame the airport for the weather? Not directly, but certainly their reaction to the weather, how do they respond when there’s weather, that part often falls on the airport.”
Richmond—the man who’s left answering for the weather, even if he can’t control it—has spent over two decades with YVR. A former fighter pilot and son of longtime Kamloops MLA and cabinet minister Claude Richmond, the 57-year-old started off as YVR’s head of operations before moving on to run airports in the U.K. and the Bahamas as part of YVR’s spinoff management group, Vantage Airport Group. In 2013, following the retirement of longtime YVR chief Larry Berg, Richmond became president and CEO. His mandate: keep airline fees low, attract new carriers and don’t overbuild—a plague of many airport authorities (see: Mirabel, Montreal). “We don’t build space that isn’t used,” he says.
With several major expansions on the horizon, including an incoming baggage system priced at $200 million, the airport has limited options for raising funds. When the authority issues debt, it incurs financing fees; raising the once “temporary” airport improvement fee irks passengers; and jacking up airline landing fees can lead carriers to look at more cost-effective destinations. While the authority relies on all of the above, making the most of their 4,000-acre footprint on Sea Island—creating an inviting space for passengers to stay and spend money—has been critical to YVR’s success.
Today, YVR counts the highest per-passenger spending on duty-free and concessions of any airport in North America. The international terminal beyond the security gate is a lush, tailored experience for the long-haul flyer, with five spas, nap pods, a cosmetic dentist practice and a new ultra-high-end duty-free shop (a $5,500 carafe of whisky greets passengers that walk through the store). Between 2004 and 2013, the authority increased revenues by 57 per cent, from $276 million to $433 million—thanks, in no small part, to food and duty-free sales and rents from a burgeoning list of retail tenants. A new open-air designer outlet mall, scheduled to open in 2015 on the northern end of Sea Island, will only add to those numbers.
Of course, YVR’s success at retailing is just one measure of how well it’s managing the customer experience. As a main port of entry into Canada, Vancouver’s airport has made considerable efforts in recent years to improve the face with which it presents new arrivals—investing $3 million annually in new customer service programs, including a 24/7 information desk and a 1-800 translator line. Those endeavours have fortified YVR’s existing accessibility initiatives, which include low-volume PA announcements (for those with hearing aids), herringbone carpets and clear large-font signage that directs passengers with visual impairments. In addition, throughout the airport, there are the Green Coat Volunteers—a cadre of mostly senior citizens who help passengers with wayfinding or frequently asked questions.
The most distinctive aspect of the YVR experience, from a visual standpoint, is its commitment to smart design and thought-provoking art. From the soaring windows with views of the North Shore mountains, to the generous use of indigenous woods and earthy colours throughout the terminals, to the 10-metre-high fish tank in the international pier replete with wolf eels, copper rockfish and sea nettle jellies, YVR very deliberately evokes a sense of place. “They’ve been able to integrate the cultural heritage into the experience so that when you enter, you know where you are,” observes Carolyn Ray, managing director of Interbrand Canada, a branding wing of global advertising agency OmnicomGroup.
Perhaps nothing accomplishes that sense of place more than the airport’s collection of contemporary and traditional First Nations art—in particular, Bill Reid’s standout jade-coloured monolith, The Spirit of Haida Gwaii (pictured above). The Reid piece sits at the axis in the main terminal, where the arrivals atrium and cross- border and international terminals intersect. In 1993, the cash-strapped airport authority commissioned a casting of the bronze canoe for the planned international terminal, at a cost of $3 million. While controversial at the time, the investment has helped cement YVR’s reputation as a distinctly West Coast place to make a connection.
YVR now allocates around one per cent of its capital budget, $1.8 million last year, toward building its art collection, which includes Musqueam weavings, Inuit soapstone carvings and bronzes, traditional Coast Salish masks and Haida totem poles scattered about the two terminals. As far as SFU’s Brent McFadden is concerned, it’s money well spent. “Atmospherics offer a way to interact with your customer base,” he says. “If you’re trying to be a novel and innovative airport, novel and innovative art can help reinforce your brand, which helps enforce that image in the customer’s mind.”
While YVR has succeeded in creating an environment where people want to shop and eat, Vancouver International remains a relatively small market airport with fewer business class passengers and more discount seekers, which limits its revenue potential on the aeronautical side. YVR now gets only 46 per cent of its revenues from airlines—the bread-and-butter fees that most airports rely on (Toronto’s Pearson, Richmond notes, derives 67 per cent of its revenues from airline landing fees). Since YVR can’t compete on the low end with neighbouring Bellingham airport (“they get government grants and we pay the government rent”), the airport’s increasing focus is to steal more of the lucrative trans-Pacific market—passengers who stay longer and spend more—from West Coast hubs Seattle, Los Angeles and San Francisco.
Looking out the sheath glass wall from the point where the international terminal abruptly ends, Richmond points at the concrete pad that will host the airport’s next lateral expansion. YVR’s modular terminals have slowly crept out from the original Y-shaped building, as the airport has increased its tally of global operators and in the process built its reputation as a North American gateway to Asia (YVR processed 8.5 million international passengers last year, while Seattle’s airport saw 3.2 million; San Francisco International, serving a regional population three times Vancouver’s, processed 9.6 million). That expansion will likely include a terminal where international passengers can change planes—and yes, shop—without ever entering Canada, perhaps opening up direct routes to Lima, Santiago or second-tier Chinese cities like Xiamen. With every new route, argues Richmond, come myriad benefits to local tourism, post-secondary institutions and the economy as a whole. “Once you build that connection, the possibilities are endless.”