Calgary

Calgary International reports pre-COVID operating loss

The airport handled a record number of passengers in 2019, but revenues were $7 million less than forecast. How is that possible?

Westjet planes fill the ramp at Calgary International Airport (photo: Twitter @FlyYYC).

Calgary International Airport lost almost $60 million in 2019, despite handling record passenger numbers and long before the impact of the COVID-19 pandemic would be felt in the world’s aviation industry.


The airport authority released its 2019 annual report Wednesday. A planned annual general meeting was put off due to COVID.

The airport made roughly $200 million in operating profits last year before deducting a $168 million charge for depreciation and $102 million to pay interest on bonds and loans the airport took out to pay for a massive terminal and airfield expansion.

“We welcomed approximately 18 million passengers in 2019,” wrote the airport’s President and Board Chair in a joint statement. “We moved people for a lifetime vacation, weekend getaways, business trips and to reunite at home with friends and family. We saw 269 flights landing at and departing from the airport each day.”

Overall, revenues were $431.9 million last year while expenses topped half a billion dollars.

In a way, Westjet’s operation of its major hub at Calgary has been both a blessing and a curse. The airport reported record concession and aircraft landing fees – both of which reflect the record number of passengers passing through the terminal, many of them connecting between flights.

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But for the airport, there is also a downside to being a hub. Revenues were actually $7 million less than expected. How is that possible?

In a nutshell, fewer Calgarians passed through the airport than expected. That causes two particular challenges for the airport:

First off, connecting passengers in Calgary don’t pay the airport $30 improvement fee, which is used to pay for airport construction programmes. AIF revenues in 2019 were $163.3 million, half a million dollars less than in 2018. AIFs are the biggest single source of airport revenue. (In Canada, only Toronto’s Pearson International charges an AIF to connecting passengers.)

Second challenge, parking revenues were down $2 million from the previous year to $41.7 million.

At the same time, it was more expensive to handle that record number of passengers.

Costs for maintenance, electricity, and salaries all increased in 2019. The airport also paid $43 million in land rent to the federal government.

“Our performance has been all the more notable during a time of challenging market conditions for the city and province,” the airport reported. “Add to that the significant changes of the airline landscape, such as the grounding of the Boeing 737 MAX—an aircraft heavily represented on Calgary’s runways.”

Of course, now that the pandemic has caused the aviation market to crater, all of the airport’s projections have been thrown out the window.

Passenger numbers fell almost 50% in March to just over 800,000 people, and further drops are expected, with most airports across the country reporting empty departure lounges as Canadians stay home.

While Westjet’s hub operation made Calgary the busiest domestic airport in the country for a time in April, the airline has since announced further frequency reductions that will see Calgary handle 237 weekly departures between Westjet and Air Canada.

Departure CityAC weekly departuresWS weekly departuresTotal
Calgary49164213
Edmonton383876
Halifax251338
Montreal8814102
Ottawa422264
Toronto180113293
Vancouver9560155
Winnipeg72835
Weekly domestic departures in May from select Canadian airports (source: airline schedules).

In response to the crisis, Calgary has closed two of its five concourses, consolidated check-in areas, halted discretionary spending (in 2019, the authority already pushed back the replacement of a baggage system, Westjet check-in area improvements, and elevator restorations), cut a third of its staff, and reduced the pay of senior management.

Concourse D at Calgary International Airport is closed, though gates 70 and 71 remain in operation (photo: Brett Ballah).

The Canadian Airports Council expects airports to lose more than $2 billion in revenues this year and is asking for government help to survive the crisis.

Categories: Calgary

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