Airport says it remains viable in the long term though uncertainty clouds its confidence
Toronto International Airport lost $96 million dollars in April, May, and June as passenger numbers plummeted during the pandemic. That is a drastic drop from the small net income the airport reported in the first three months of the year. The Greater Toronto Airport Authority reported its second quarter results Thursday afternoon.
Roughly half a million people passed through the airport in the second quarter, down 96% from 2019. Domestic passengers fell 93.5%, while international passenger numbers fell a staggering 97.5% in the quarter. Slightly more than 10 million passengers have passed through Canada’s busiest airport in the first six months of the year. That’s a drop of 58.6%.
“In the face of the most challenging period in the history of aviation, we have delivered on a clear program for financial sustainability and a comprehensive approach to support the restart of our business through our Healthy Airport program,” said Deborah Flint, President and Chief Executive Officer of the Greater Toronto Airports Authority. The GTAA is the private, not-for-profit authority that runs Toronto Lester B. Pearson International airport.
Canada’s largest airports – including Toronto – rely on passenger revenues to pay for their operations and upkeep. Those revenues include fees charged to airlines and Airport Improvement Fees used to pay for airport upgrades, expansions, and renovations.
In response to the pandemic, airport executives say they have cut $265 million in capital expenses, eliminated more than 500 jobs, and closed more than 40% of its terminal facilities.
Data show the airport burned through $228 million of its cash reserves in the quarter. It has $236 million in cash and $875 million in undrawn credit available.
‘Limited visibility on travel demand’
The Canadian Airports Council has warned its members would lose around $2 billion in revenues this year. Toronto already accounts for more than $200 million in lost revenues in the first six months of 2020. And airport executives say the future is hard to predict.
“The GTAA and the Canadian Airports Council are actively engaging with governments at all levels to discuss financial support and the practices and requirements to remove travel restrictions,” the airport reported.
The Canadian government has banned most foreign travel and closed the border with the United States. A conglomeration of airlines and travel partners has called on the government to revise its policy.
“As a result of COVID-19 there is very limited visibility on travel demand given changing government restrictions in place around the world,” the airport said in reporting its financial results. “While the full duration and scope of the COVID-19 pandemic cannot be known at this time, Management believes that the pandemic will not have a material impact on the long-term financial sustainability of the Airport.”
To help ease passenger fears, Toronto has created the “healthy airport” program. It establishes consistent cleanliness standards for the airport and its partners. The program includes:
- touchless check-in,
- a disinfection corridor for airport employees,
- congestion-monitoring equipment,
- autonomous floor cleaning machines, and
- air quality monitors.
“This investment in leading health measures and innovative new hygiene practices positions Toronto Pearson to create a safe air corridor to other low risk countries,” said Flint.
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