Airport plans 40% staff reduction due to COVID-19 pandemic

Edmonton International Airport has become the latest facility to announce a massive cut to its workforce as a result of the COVID-19 pandemic.

The airport said it would cut 40% of its staff, eliminating about 100 jobs, as the airport authority copes with the drastic decline in passenger numbers due to the pandemic. What’s worse, a consensus is building in Canada that the pandemic’s effects on aviation will be felt for at least the next three years.

“Our employees are the foundation of our organization and our contribution to our communities, and we feel this loss profoundly”, said Tom Ruth, President and Chief Executive Officer of Edmonton Airports.

The airport, which handled more than eight million passengers last year, forecasts only 2.7 million users this year. That drop affects direct passenger charges, such as Airport Improvement Fees and user fees charged to the airlines, but also parking revenues and rents that airports can charge to tenants, such as restaurants and car rental companies.

Vancouver International announced a 30% workforce reduction earlier this month.

The Canadian Airports Council, an umbrella group representing Canada’s largest facilities, expects airports to lose more than $2 billion in revenue this year.

This is a difficult and sad time for the airport, and we regret having to announce this news. Our employees are the foundation of our organization and our contribution to our communities and we feel this loss profoundly. https://t.co/jpUsUuNccZ

— EIA (@FlyEIA) May 21, 2020

There are new warnings this week that fees will have to rise to make up the difference.

NAV Canada, which runs the country’s air traffic control system, warned airlines yesterday that it would increase its fees would rise 29% in September.

The non-profit agency said it cut costs and has taken advantage of a federal wage subsidy to the tune of $68.5 million, but even so was facing a deficit of $870 million this year and next. That can only be made up by taking on debt and increasing fees charged to the travelling public.

“All available alternatives, including further government assistance will continue to be explored and utilized in order to minimize or  avoid the proposed rate increase,” said Neil Wilson, NAV Canada’s President and CEO.

Those fees add up. While lowest price return ticket from Vancouver to Montreal can be found for $622, taxes, security charges, and airport improvement fees add almost $110 to the cost. Plus, buried in the ticket price, are terminal and landing fees the airports charge to run their operations.

Cutting staff is only part of the solution.

“Airports are only able to cut their costs by up to about 20%,” said CAC President Daniel-Robert Gooch in an email to Western Aviation News, “with the remaining costs quite fixed, so the shortfall is quite significant at many airports.”

While no national numbers are available, each airport will decide what fees to charge in the coming weeks and months. The CAC’s president, Joyce Carter warned a Commons committee in early May that AIFs could rise 50% without government aid.

So far, the federal government has responded by cutting the rents it charges to airports for the rest of the year. That move helped Toronto International eke out a small surplus in the first three months of the year, before the pandemic’s full impact was felt.