The COVID-19 pandemic will costs Canadian airports anywhere between 30 and 46 million passengers in 2020, according to a new data compiled by the Canadian Airports Council.
The bleak analysis was presented to federal officials Monday as the airline sector suffers the ravages of the global pandemic.
The CAC expects that anywhere between 40 and 53% fewer people will be flying in Canada between March and June as people heed the federal government’s advice to travel only if necessary. The estimate was prepared before Westjet announced it would suspend all international services as of Sunday.
Westjet said it would reduce domestic flying by half for the next 30 days and reduce staff in a bid to conserve cash and “secure the financial viability of our airline.”
Air Canada has announced cuts of about 50%.
Fewer planes with fewer passengers mean lower revenues for airports, which earn their revenues through landing fees, tenant leases, and parking.
While airlines are asking for help to weather the storm, airports are also feeling the squeeze. The CAC projects its members will lose anywhere between $850 million and $1.3 billion this year.
In 2018, Canada’s airports took in more than $4 billion in revenues, according to an analysis by Western Aviation News. At the same time, they spent $530 million on employee salaries, most of which are fixed costs “and cannot be reduced, regardless of traffic volumes,” said the CAC.
Airports have already moved to save money where they can, according to the CAC, “including implementing a freeze on hiring, cancelling or deferring capital projects that have not yet begun, and by reducing the scope of contracted services in anticipation of even lower passenger traffic volumes.”
Canada’s largest airports are operated by private locally-run airport authorities on land owned by the federal government.
Airports are asking the federal government for a number of relief measures, including deferral of financial obligations, more money for infrastructure and tourism, and a break on the leases airports pay Transport Canada. In 2018, they sent $397 million in lease payments to Ottawa.
Last year, the largest Canadian airports served more than 150 million passengers, including record numbers at the country’s four largest hubs, despite airlines losing the Boeing 737 Max for most of the year.
|Airport||2018 passengers||2019 passengers|
|Prince George, B.C.||506,486|
|Winnipeg||4,500,000* (estimate)||4,500,000 (est.)|
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