Rent break not enough: Toronto Pearson

Crews unload medical supplies from a Hainan Boeing 787 at Toronto Pearson International April 4, 2020 (photo: Twitter/@TorontoPearson)

It will take more than a federal rent break to counteract the impact of the COVID-19 pandemic on airports, said the president of Toronto’s Pearson International Airport in a letter to federal officials late Friday.

“Passenger numbers at Toronto Pearson continue to drop significantly from an average of 130,000 per day to 5,000 per day,” Deborah Flint wrote. “The number of flights has dropped as well, from an average of 1,300 per day to approximately 350 per day.” 

Toronto has seen revenues plummet from the record high of $1.5 billion recorded in 2019. Airports in Canada make most of their money from fees associated with passenger movement. Pearson generated more than $700 million last year in passenger fees, landing fees, and parking, plus $448 million in Airport Improvement Fees which are used to fund capital expenses.

A drop in passengers means a drop in all those fees. In fact, if the falloff in passenger numbers were to continue for the whole year, Toronto alone would lose more than $1 billion in revenue. Canada’s airports as a whole are projected to lose $2.2 billion or more due to the pandemic.

The airport has responded to the pandemic by cutting spending on construction and closing the infield terminal. Other unspecified measures are being considered.

Ottawa announced Monday it would help airports by cancelling land lease payments for Canada’s largest airports for the rest of the year, forgoing more than $300 million in revenue from airports.

Airports have remained open to handle the small number of people who continue to travel and help move cargo and essential supplies across the country and around the world. The head of Ottawa International said one day this week, his facility saw just 436 people pass through.

Flint said it will take at least one more year of rent breaks to help airports weather the storm, and two or three years for her airport to recover from the COVID collapse. She also wants Ottawa to soften regulatory changes that will cost airports money and help them pay to meet new requirements.

Longer term, she wants Ottawa to help fund renovations that will be needed to help restore public confidence in air travel in a post-COVID world, such as more space to maintain physical distancing between passengers.

She also wants airports to sell duty free to arriving international passengers. Duty free sales generate substantial profits for airports, both in leased space and as a portion of sales.

“From implementing technology-based solutions within the airport environment to adapting our terminal infrastructure to allow for greater physical spacing, we are turning our attention to what the future of aviation will look like,” wrote Flint.

Flint’s plea for help comes as airlines further reduce their schedules and cut staff to cope with the pandemic. Toronto can expect to handle just 428 domestic flights next week on Air Canada and Westjet. Its international operations have also been decimated, with just nine airlines planning to fly out of Pearson next week, compared to 67 in normal times.

Departure CityAC weekly departuresWS weekly departuresTotal
Weekly domestic departures in May from select Canadian airports (source: airline schedules).

More than 45,000 Canadians have lost their jobs in the aviation sector in the past 10 days.

Categories: Toronto

3 replies »