Technology investments needed to speed recovery from COVID pandemic
The bill to make Canadians feel safe enough to travel could be in the “hundreds of millions” once the COVID-19 pandemic eases, according to an estimate by the Canadian Airports Council.
Executive Director Daniel-Robert Gooch made the estimate Thursday during a webinar hosted by International Airport Review.
“The bill for these mandated investments will be in the hundreds of millions of dollars,” he said, adding security, safety, and accessibility measures to the list. “We don’t oppose them, but we do wonder how they will be paid when airports are making so little revenue.”
In early May, the head of Toronto’s Pearson International Airport, Deborah Flint, laid out her vision of the airport of the future, including biometrics, e-gates that operate automatically, and CT scanners at security checkpoints – everything to remove as many touch points as possible from the passenger’s journey.
On top of that, airports are mandated to improve runway safety by adding to their ends, work that started before the pandemic, but whose funding has been complicated by the drop in revenue. That work alone is estimated to cost $350 million.
“The federal government can support this work through infrastructure funding programmes,” said Gooch. He said an existing fund, worth $38.5 million last year for small airports, is already overtaxed, isn’t accessible to larger airports, and can’t be used for airport operations.
It will also take close coordination among a host of agencies to set health standards and protocols across the country. That means tying together the work of local and provincial health authorities, Transport Canada, the Canada Border Services Agency, among others, will have to be aligned with global standards to restore travel confidence.
“Standards and procedures for passenger and employee temperature checks, both outbound and inbound, public access to terminal buildings, the wearing of face masks or coverings and physical distancing inside terminals, all of this needs to be dealt with in a consistent manner,” said Gooch.
A patchwork approach will distort the marke and undermine travel recovery. “It is so far,” he said.
Airports, which in Canada are private non-profit businesses, make most of their money from passengers and the business they generate. Since mid-March, they have watched their revenues evaporate during the pandemic.
“Right now, ” said Gooch, “what airports are doing is borrowing against the future just to cover operating costs.” This week, the head of St. John’s International Airport said he’d have to borrow $20 million this year just to keep the lights on.
In response, airports have cut staff and reduced capital funding. They are also starting to raise the rates they charge that ultimately get passed on to passengers.
Airports warned at the beginning of the month that Airport Improvement Fees, which cover capital expenses, could skyrocket 50% without government help. This week, Winnipeg became the first domino to fall, announcing it would raise AIFs from $25 to $38 starting September 1.
“Airports don’t want to raise their rates,” said Gooch. “It’s not something that’s going to support us in the recovery, but costs have to be covered somehow.”
While the federal government has forgiven airport land lease payments for the rest of the year and offered a wage subsidy, those are of limited help to airports who paid almost twice as much last year to service their debts as they paid in salaries.
“Engagement has been strong, but financial relief that has been provided has been quite minor at this point,” said Gooch.
At some point, people will start to travel again, signs of that are already starting to emerge with airlines bumping up summer service from the depths of their COVID cancellations.
“It has been a long and difficult two and a half months,” said Gooch. “And there’s a long road ahead. But Canada’s travel and tourism sector will bounce back. There’s just too many people who want to go out and see the world and come to Canada to keep us down forever.”
Categories: Canadian airports and cities
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