Airport authority warns its part of a $2.5 billion new train link is at risk without government loans
Despite a small uptick in flights, Montreal-Trudeau International Airport is still a lonely place these days.
“It hurts,” said Philippe Rainville, Aeroports de Montreal President, at the airport’s Annual Public Meeting Monday morning. It was his fourth as the airport authority’s chief executive.
“Never, never did I ever imagine that I’d be speaking with you in such a difficult and uncertain context,” he said. “COVID-19 and border closures have caused the breakdown of air traffic. Our international airport, normally so full of life, is empty.”
Aeroports de Montreal runs two facilities, Mirabel Airport (YMX), which is a logistics and manufacturing hub and the better-known passenger hub, Montreal-Trudeau.
“YMX is doing ok [during the pandemic],” said Rainville. “It’s particularly disappointing at YUL Montreal-Trudeau. The hallways are deserted, the vehicle drop off is empty, the silence is almost unbroken.”
“Overall, we now anticipate a 60% decline in passenger traffic for the year 2020,” said Ginette Maillé, the airport’s Chief Financial Officer. “This is a scenario that is is much bleaker than we imagined in April.”
That decline has decimated the airport’s finances. Maillé estimates the airport is burning through $15 million a month to keep operating and pay the interest on its debt.
The crisis, said Rainville, is putting at risk major projects at Trudeau, including construction of a train line linking the airport to a vast urban light rail network now under construction.
“We now note we need financial help to complete the work since we no longer have revenue to pay for it,” he said. “Our fiscal room is disappearing before our eyes, while the likelihood of a restart is pushed back day after day.”
The project includes a massive tunnel under the airfield and terminal building. Rainville said it would be impossible to meet a 2022 deadline if construction doesn’t start straight away.
“Financially, we’re doing ok,” said Rainville. “We can keep going for a few months, many months even, but we don’t have enough to start construction of [the train station].”
ADM has turned to the federal and provincial governments for loans covering the full cost of construction, estimated at $2.5 billion, with flexible repayments linked to the airport’s passenger traffic. Negotiations are expected to start this summer.
As a result of the crisis, Rainville said 30% of his staff have been sent home, only on the payroll thanks to federal wage subsidies. Those subsidies have been extended through the summer at which point Rainville said management would have a better idea of the airport’s next steps.
The authority expects that traffic will take at least two years to return. Rainville said 2020 will be a year of contraction while 2021 will see half the number of passengers that used the airport before the pandemic. Key to recovery will be the reopening of Canada’s borders. Montreal is one of Air Canada’s main international hubs.
In Canada, airport revenues are closely tied to passenger traffic. Rainville hopes to avoid fee increases that would ultimately raise airfares.
Executives at the airport say they will know air travel is back when more than 500,000 people use the terminal in a month, followed by three months of growth.
The train link alone wont cost $2.5 billion, but rather $500 to 600 million. The $2.5 billion includes a new multi story parking, new jetty, expanded departure ramp, etc. That project is currently on hold. Only the REM portion of it will be moving forwards, if they can secure the funds that is.