Economics of Airships for Northern Re-supply
Barry E. Prentice, PhD, Director, Transport Institute, University of Manitoba, and Jim Thomson, CA, President, Mercatus Ventures Inc.
Introduction
Canadian society places a high value on the equity of access to basic services and the elimination of regional disparities. In the urban centres and more densely populated parts of rural Canada, where transportation and logistics costs are low, economic development policy has been effective. Canadians enjoy quality healthcare, education and opportunities for employment. Where success has been elusive, is in the 70 percent of the landmass that has no all-weather roads. Without effective transportation, the standard of living in the North will always be inferior to the more densely populated south.
Former Prime Minister Mackenzie King encapsulated the economic problem of providing infrastructure to develop the remote parts of Canada, “If some countries have too much history, we have too much geography.”1 The Canadian population has always been too small, relative to the financial demand to construct and maintain all-weather roads or railway lines to most parts of the country. Moreover, the construction of surface infrastructure is difficult in Canada’s northern regions. The rugged terrain, environmental concerns and the complications posed by the need to deal with muskeg and permafrost make road construction very expensive.
Transportation challenges discourage investment in resource industries, limit employment prospects and increase the cost of living. Without an efficient and economic means of transport, the natural resource opportunities in the North remain unreachable. High freight rates inflate the cost of inputs and limit the selection of consumer goods available. Often, Canadians living in the North are cut off from public services that are taken for granted in the rest of the country. These socio-economic disparities are greatest in the remote communities that have no all-weather road access.
The North is served best by air transport. The distances are vast, the infrastructure costs of air transport are low, and the service is available year round. The technological problem is the volume of goods that can be moved economically by small airplanes. If the operating costs of air transport could be reduced, the socio-economic benefits would be significant. It is for this reason that the development of a new generation of cargo carrying airships presents such an appealing opportunity for the North.
The purpose of this paper is to present an economic analysis of the airship option for re-supply in northern Manitoba. The current means of transport may not be the most efficient way to serve the North, but the prospect of shaving costs out of the transport system must outweigh the cost and risk of developing new airship technology. This paper addresses whether a cargo airship compete with the economics of conventional modes of transport.