Vancouver International Airport
   Authority
   P.O. Box 23750
   Airport Postal Outlet
   Richmond, B.C.
   V7B 1Y7

   May 31, 1996

   City of Vancouver
   453 West 12th Avenue
   Vancouver, B.C.
   V5Y 1V4

   Attention:  Mayor Philip Owen & Members of Council

   Dear Sirs:

   Re:  Vancouver International Airport Authority

   It is now nearly three years since my appointment by the City of
   Vancouver to the Board of Directors of the Vancouver International
   Airport Authority and I would like to take the opportunity to express 
   my appreciation and to highlight some of the Authority's activities
   during the year.  Many changes have occurred since I last had the
   opportunity to report to you and I have outlined some of our
   achievements below.

   Major Projects

   1996 has been, and will continue to be, a very exciting, challenging and
   busy years.  Numerous projects have been undertaken and completed or are
   nearing completion.  Included are:

   -    The International Terminal which opened for US flights on May 1 and
        will be open for international flights on June 1.  The new terminal
        was completed on time and one budget.  In addition to a gala
        opening, the Authority hosted a successful two-day open house for
        the community.  Over 100,000 people were able to enjoy the
        celebrations.

   -    Transport Canada's new control tower has been completed and went
        into operation May 22.

   -    The new parallel runway is scheduled for completion this fall -
        also on time and on budget.

   -    Phase 1 of a new parkade is now open.  The remaining phase is
        scheduled for completion by October 1996 for a total of 2,200
        parking stalls and will include car rental facilities.

   Other projects completed during 1995 and early 1996 included:

   -    Gate 14 expansion (Domestic Terminal)
   -    Host Marriott retail street - phase 2 (Domestic Terminal)
   -    Construction of a new airport operations centre
   -    McDonald Road services for car rentals
   -    Arthur Laing seismic upgrade (phase 1)
   -    Dyke upgrading.

   Further improvements to the Domestic Terminal are planned and the
   planning process is underway.

   Open Skies

   In February of 1995 and after many years of negotiation, a new
   Canada-U.S. bilateral agreement "Open Skies" was signed.  This agreement
   now provides the airlines with the ability to fly unrestricted direct
   routes between Canada and the United States.  In the past, airlines
   flying out of YVR were limited to flying direct routes to only seven
   cities in continental United States -- - and the only city east of the
   Rockies was Chicago.  The two year phase-in program has resulted in the
   addition of six new routes in the first year with an additional six
   added this year.  A passenger can now fly direct to 23 U.S. cities on 11
   different airlines on 72 flights per day.  This year alone, six new
   cities and 14 more flights a day are being added.  By 1997, it will be
   completely "open skies".

   Safety

   The most first and foremost responsibility of the Authority is the safe
   and efficient operation of the airport.  Safety and emergency
   preparedness are vital responsibilities which the Authority keeps firmly
   in view.  Examples of initiatives include:

   -    YVR Emergency Planning completed 22 Tabletop Exercises during 1995.

   -    A successful full-scale simulation of a "Crash Off-Airport" was
        carried out.  This involved many different outside agencies.

   -    Airside Operations worked closely with Air Traffic Control to
        ensure safe methods of handling the increased air traffic and
        construction at YVR.

   The Environment

   During the past 18 months, I have had the opportunity to chair the Board
   Committee on the Environment.  Highlights include:

   -    The completion and adoption of an Environmental Management Plan;

   -    The completion of the Sea Island Parks and Recreation Plan;

   -    the implementation, in conjunction with the airlines, of a glycol
        mitigation plan;

   -    The preparation of a needs assessment for an outdoor air quality
        monitoring system;

   -    A comprehensive and successful waste reduction and recycling
        program for the Domestic Terminal;

   -    Continuation of project environmental monitoring; and

   -    The Authority is the recipient of the Fraser River Management
        Program (FREMP) Special Environmental Award in recognition of its
        proactive environmental management approach.

   Strategic Vision

   An update of the Authority's Strategic Plan, including a future vision
   for the airport call "North Star".  Driven by the singular focus of
   building a better airport, "North Star" has five key elements that will
   take YVR into the next century:

   -    YVR will have extensive international air services network with
        daily services to major desitnations in the U.S., Asia, Europe and
        Latin America;

   -    YVR will be gateway of choice to the U.S. and Latin America for
        Trans-Pacific carriers;

   -    YVR will be a major intermodal freight distribution centre for
        North America;

   -    YVR will be an international gateway to "SuperNatural" British
        Columbia, providing one-stop access from world markets;

   -    Three new noise monitoring terminals have been installed, one in
        Marpole.  A total of 12 terminals are now in operation, 4 of which
        are on the south slopes of Vancouver;

   -    YVR's reputation for superior facilities, exciting design themes,
        fast and easy passenger connections, and exceptional customer
        service will be well known, leading to an international traveller
        rating of "Number One" in North America and among the "Top Three"
        airports in the world.

   Draft Master Plan

   The Master Plan is a guide for the future physical development of
   airport lands and facilities.  The primary purpose of Plan is to ensure
   the realization of the "North Star" strategic vision by providing
   guidance for orderly future development and land use as the Authority
   moves toward the 21st century.  Released in a draft form for public
   consultation in July 1995, the Draft Plan has been revised and is
   presently before the Minister of Transport.

   Key planning principles include:

   -    Adaptability to change in the external environment, unexpected
        challenges and new opportunities;

   -    Balance between the key functions of the airside system, passenger
        terminals, and air cargo in order to optimize operations and future
        development; and

   -    Hierarchy to ensure that lands are reserved for the highest and
        best use consistent with overall development objectives.

   The Authority also strives to maintain excellent relationships with
   government and industry and the community it serves.  Consistent with
   this commitment, the Master Plan looks beyond YVR and examines the
   implications of airport activities on the region as a whole.  Some
   issues of importance are economic development opportunities, land-use
   compatibility, necessary ground transportation enhancements (a corridor
   has been reserved, for example, for rapid transit), and the mitigation
   of aircraft noise.

   Arthur Laing Bridge

   Phase II of the Arthur Laing Seismic Upgrade will be proceeding during
   the summer months.  This will necessitate some lane closures all of
   which will occur in non-peak hours (between 10:30 pm and 5:30 am) June
   15 to August 15.  Closures will include the closure of the Granville
   Street on and off ramps between July 29 and August 15.

   I would like to conclude by saying that I welcome this opportunity to
   report to you and would be pleased to answer any questions you might
   have.  The Authority would be pleased to provide a tour of the new
   facilities for anyone who has not yet had the opportunity.

   Thank you again.

   Yours truly,


   Jane Fleming (sgd)
   Director