Friends of Pickering Airport

Toronto’s Economic Bottleneck: Airport Slots

Your mobile phone rings at 6 a.m. in Toronto, alerting you to an issue with a significant client based in London, England, which is five hours ahead. To address the situation, you reserve a seat on the earliest available flight from Pearson Airport to London Heathrow—a red-eye departing at 6 p.m. Thanks to Pearson Airport’s current limitations, it does not offer daytime flights to Europe. With a multi-million-dollar contract at stake, you are faced with critical decisions regarding the company’s future operations. Is it time to relocate to New York, following the example set by a competing firm’s CEO?

For decades, the GTA (Greater Toronto Area) has been Canada’s largest economic engine. At the heart of this prosperity is Toronto Pearson International Airport. Remarkably for a modern city of 7 million people, Toronto has only one jet airport. Compare this to 6 jet airports providing globe-spanning services to New York’s population of 18 million. Once North America’s fastest growing region, today the GTAs economy is slowing with an unemployment rate consistently above the national average.  Toronto Pearson’s limited capacity is not just a competitive vulnerability; it can be exploited by external actors, including a U.S. president, to exert economic pressure on Canadian sovereignty.

 

How important to Canadas economy is Toronto Pearson Airport? According to the Toronto Board of Trade, Pearson airport enables an economic zone that creates 400,000 jobs, creates $53 billion in economic activity and transports $40 billion in exports annually. Unfortunately, it is currently short of capacity at critical times of the day. Even with billions in new investment, Pearson airport will remain a slot-restricted airport with limited capacity to expand.

For comparison, New York, with its six modern jet airports, has the slot capacity to offer daytime flights to Europe. Toronto’s single Jet airport, Pearson, has no room for daytime flights to Europe. Americas’ robust aviation transportation infrastructure is a competitive advantage that casts a long shadow over Canada’s competitiveness.

If a company relocates from Toronto to New York, a robust airport infrastructure can provide global logistical benefits for employees and high-value goods. For example, employees can take direct morning flights to Europe, use Wi-Fi during the flight to work, and dine with a client that evening.

 

What is a slot, and why is it a chokepoint?

According to the International Air Transport Association (IATA) and the Greater Toronto Airports Authority, Toronto Pearson International Airport is classified as a level 3 slot-restricted airport. This designation is reserved for airports experiencing congestion levels where demand substantially exceeds available capacity.

Airlines must obtain/purchase a time window (slot) to operate scheduled flights at slot-controlled airports.  A slot is more than a takeoff or landing time. It is a permission given to an airline to use the full range of airport infrastructure necessary to operate a route on a specific date and time. This includes using a runway, taxiing to/from a gate, access to fuel, catering services, and terminal access for passengers.

Simply put, if an airline does not have an assigned slot, it can’t land or take off from the airport.

Pearson Airport’s performance continues to decline.

Despite careful slot management, Pearson ranks among the lowest in North America for on-time performance. In 2024, AirHelp placed Toronto Pearson Airport at 227th globally on this metric, in the bottom 6%. The issue isn’t with staff or management—dedicated employees maintain order and have helped Pearson earn customer service awards from Airports Council International.

Like other Level 3 slot-coordinated airports globally, Pearson International Airport experiences significant congestion and frequent flight delays during peak travel periods. This situation is further challenged by the requirement to accommodate all jet traffic for Toronto. This necessitates the management of complex approach sequences for a diverse range of aircraft wake turbulence types and speeds.  Pearson accommodates all types of aircraft, ranging from small utility planes and business jets to mid-sized regional jets and major international flights, including the Airbus A380. These operational demands, combined with variable Canadian weather, contribute to a distinct set of challenges. Regular travellers at Pearson, Canada’s busiest airport, are likely familiar with terms such as flow, ground delay, and ground stop, all of which can have substantial implications for travel plans.

With a third of global trade by value transported by air, restricted airport capacity hampers long-term economic growth.

A slot system allocates supply based on monetary value and merit. Securing a new prime-time route at a slot-controlled airport is challenging, often requiring years of lobbying and investment. These slots are frequently acquired from other airlines, often with little net economic gain.

Pearson can not add enough new slots to handle future demand.

Pearson already faces slot shortages during peak times today and is projected to reach full capacity in less than 10 years.  Draconian slot controls, adding new gates or a sixth runway, provide diminishing returns compared to the cost.   Even lifting the nighttime curfew would still not meet the expected demand. IATA is forecasting an annual 3.2% growth in passenger traffic for the next 20 years (2024-2044) in North America.  That’s an 88% growth in passenger travel by 2044.

At a conservative growth rate, using Pearson’s existing master plan, the airport is going to max out at 65 million passengers by 2033. This is assuming 120 passengers per movement (2019/2024 average). That translates to about 540k movements a year.  The only way to increase this is to reduce nighttime curfew restrictions and find tens of billions of dollars to rebuild existing infrastructure. The disruption of such actions would be significant.  This could push Pearson to more than 600K movements (several hundred thousand movements short of what is needed over the next two decades).

There is no magic in the new aircraft on order anywhere that will provide a dramatic increase in load factor per aircraft movement. This means the number of slots required in the GTA will also have to be 88% greater. If we use the observed 15-year annual average Canadian pre-COVID passenger growth rate (3.87%), the capacity gap is even larger. The Toronto region is looking at an economy-crushing shortfall of 50 million passengers and 417k movements by 2051.

Not all slots are created equal

Pearson Airport faces three main issues: slot syncing, travel time sinks, and reliability, which are affecting economic competitiveness in the Toronto area. There is a simple solution to address these challenges:

1)The slot window challenge – Facilitating increased trade and tourism between Toronto and Europe necessitates the introduction of new flight routes. However, this objective is complicated by the limited number of available slots at Pearson airport that coincide with optimal “window to Europe” timings. Coordinating a departure slot from Toronto with an appropriate arrival slot on another continent presents significant challenges due to time zone differences, journey durations ranging from 7 to 9 hours, and the constraints imposed by nighttime curfews.

Flying from Toronto to London, England requires adjusting to a five-hour time difference and takes just over seven hours of flight time. Ideally, flights would depart Toronto by 10 AM to meet London’s 11 PM curfew, with a 3.5-hour window after Pearson Airport’s 6:30 AM curfew lifts. However, this window coincides with high regional and North American traffic. Travellers from Toronto to Europe must plan on missing out on a good night’s sleep to arrive the following morning, groggy and wrinkled. It is called a red-eye flight for a reason.   

Daytime flights from North America to Europe are simply better for a traveller as they dodge jet lag. These flights land in Europe in the evening, enabling a good night’s rest to reset your body clock.  With the advent of onboard WIFI, business travellers do not even lose a day of work.  For this reason, morning flights out of New York’s JFK airport to London Heathrow are popular.

2) Time Sink Problem – Excess travel time discourages both business and leisure travellers, especially families and older adults. Factoring in buffers for traffic, connections, and delays is essential, not just for travellers but also for critical supply chains. Airport location and curbside access impact economic growth, and airports farther away (like Hamilton or Waterloo) do not provide efficient service for most travellers or resolve congestion at Pearson.

3) Reliability and efficiency – Congestion leads to unpredictable delays, increased travel costs, and lost opportunities. Delays caused by weather or human factors can disrupt airport schedules, waste fuel, and affect crew rotations and aircraft maintenance. Missed connections, such as those at Pearson airport, add to traveller frustration and costs, ultimately driving up expenses for both airlines and passengers.

Solution: Add aviation capacity in the right location.

Expanding or building airports in strategic locations is essential to address Toronto’s constrained airport slots. Aviation bodies like ICAO confirm that increasing airport capacity—either through expansion or new construction—is the only effective solution.

As stated in ICAO circular 283:

“Increasing airport capacity through new or enlarged airports, runways and terminals is clearly the best solution for a capacity-constrained airport.”

New aviation capacity must be added close to major population centers, not two hours away. Pearson can only be expanded slightly and at great cost.  Smaller regional airports such as Toronto Billy Bishop and Oshawa do not have the room to expand to handle jet travel to Europe. Hamilton and Waterloo airports have their own master plans that are regionally focused and can not address the shortfall at Pearson due to their distance from Toronto.

A new commercial airport is required to handle at least 250,000 movements, 15 million annual passengers, and expanded cargo services. The federal Pickering Lands are ready to accommodate a new airport. This airport could be privately funded and generate thousands of jobs and billions in economic activity.

 

Conclusion

Canada is the largest democracy in the world by land area, with the Greater Toronto Area (GTA) as its most populous region. At the centre of this region lies a critical transportation hub: Toronto Pearson Airport. To ensure continued growth and future prosperity for both Toronto and Canada, it is essential to address the capacity limitations at this key airport. Expanding airport infrastructure in a timely manner is necessary to diversify trade and support Canada’s economic competitiveness.

Related posts:

Is building Pickering better than building a sixth runway at Pearson ? – Friends of Pickering Airport

KPMG Report Reaffirms Need for Pickering Airport – Friends of Pickering Airport

Pearson airport’s slot capacity explored – Friends of Pickering Airport

References:

Secondary trading of airport slots: Issues and challenges – ScienceDirect

Circular 283 – ICAO

Ontario’s wounded economy is dragging down Canada’s growth – The Globe and Mail

Slot Allocation– ICAO

The slot game: How airlines and airports manage takeoff and landing rights

Toronto Pearson was just ranked the worst airport in the world for delays

ASQ Awards and Recognition | ACI World

Improved On-Time Performance and competition in Canada – Cirium

Air Canada & Toronto Pearson got slammed in a new global ranking — and it’s BAD bad – Narcity

Toronto Pearson airport returns to normal operations after 2 runways temporarily closed