The Canadian Airports Council (CAC), the voice for Canada’s airports, continues to call on federal and provincial governments to work with airports and other industry stakeholders to ensure that post-pandemic, there will be a functioning air sector that supports Canadian travel, tourism and trade.
With the increase in air travel restrictions, and new quarantine and testing requirements imposed during the last quarter of 2020 and early 2021, the CAC’s December outlook projected that revenue losses for Canada’s airports have deepened to $5.5 billion for 2020 and 2021—a $1 billion deterioration since the last analysis was released in August 2020.
According to the CAC, given that no more than 20 per cent of the measures outlined in the federal Fall Economic Statement will come in the form of direct grants to address operational losses, Canada’s airports expect to take on about $2.8 billion in additional debt through to 2021.
“While the federal government has been supportive, it is missing the sense of urgency to act quickly and decisively,” said Daniel-Robert Gooch, CAC president. “The reality is that these losses are unsustainable. Without government action, air travel will not only become a lot more expensive, but Canadians everywhere will have fewer choices of routes and destinations, including at the four major hub airports.”
Prior to the onset of COVID-19, most Canadian airports were almost entirely funded through passenger and aeronautical fees, which have dropped catastrophically with passenger traffic at zero to 15 per cent of pre-COVID levels at most airports.
“[Ground lease rent relief and the Canada Emergency Wage Subsidy] provided some assistance, but not enough to help support airports dealing with higher costs and cratering revenues,” said Gooch. “In fact, our analysis shows that even their modest impact was far less than the government projected.”
The CAC has identified several government-led actions to avoid the worst outcomes, including:
(i) Working inclusively with Canadian airports and industry partners on a plan to restart air travel when it is safe to do.
(ii) Implementing a moratorium on ground lease rents and provide options for interest-free loans (or equivalent operational support) until the business recovers, which could take five years or longer.
(iii) Expanding national transportation infrastructure funding to meet safety and security requirements and adapt to COVID-19 and climate change.
(iv) Making permanent the elevated Airports Capital Assistance Program funding and expanded eligibility criteria to ensure sustainable recovery at Canada’s regional airports.