Vancouver International’s loss caps a week of ugly financial reports among Canada’s airports. Collectively, they lost well north of $1 billion in 2020.
Vancouver International reported a staggering $380 million loss late Friday, as the pandemic cratered revenues and trans-Pacific traffic evaporated.
The loss is the second most among Canadian airports, behind only Toronto. Canada’s largest airport reported a loss of $383 million in 2020. Comparatively, Vancouver’s loss is much worse, as the airport typically handles less than half the traffic of Pearson.
The airport issued its report the same day Air Canada reported a $1 billion loss in the first quarter of 2021.
“The persistence of COVID-19 and its resurgence in Canada are weighing heavily on the Canadian airline industry, as reflected in Air Canada’s first quarter results,” said Michael Rousseau, President and Chief Executive Officer of Air Canada in a statement.
Bullish on the future
Vancouver handled only 7.3 million passengers in 2020. That’s down 72% from 2019, now seen as the benchmark year in global aviation. Cargo tonnage was down to 240-thousand metric tonnes, from 304-thousand the year before.
“While the short term may be uncertain, I remain bullish about our long-term future,” said YVR President and Chief Executive Officer Tamara Vrooman in the airport’s annual report. The airport laid off a quarter of its staff and cancelled major construction projects as a result of the pandemic. “I want to acknowledge and recognize the employees who we had to say goodbye to and thank them for their service to our airport and community.”
Canada’s airports operate on a user-pay model. That means they earn most of their revenues from passengers and the fees they generate. Revenues in Vancouver were down almost across the board. Landing fees dropped from $48 million to $22 million. Airport improvement fees dropped from $170 million to $51 million. And parking revenue dropped from almost $39 million to a little more than $15 million.
The only areas showing growth were land rentals – several businesses lease facilities at the airport – and government subsidies. The airport collected $15 million in federal wage subsidies over the year.
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What is the restart plan?
The dire financial results added new political impetus, Friday, to laying out some kind of plan to restart aviation in Canada. So far, the government’s response to the pandemic has been border closures and mandatory testing and quarantine periods. Except for targeted loans to airlines, there has been no concerted long-term plan to emerge from the restrictions.
“It is now essential that governments communicate and implement a reopening plan for our country, said Rousseau. “Canada can reopen and safely ease travel restrictions as vaccination programs roll out. We have seen elsewhere, notably in the U.S., that travel rebounds sharply as COVID-19 recedes and restrictions are lifted.”
The group representing Canada’s carriers, including Air Canada, echoed the sentiment. But the National Airlines Council of Canada pointed to the United Kingdom for inspiration.
“The UK plan provides metrics, clarity on process, and underscores that the government retains complete authority on timing and implementation, including the ability to reinstate restrictive measures,” said NACC President and CEO Mike McNaney. “Countries that establish a clear recovery strategy for their aviation sectors will not only ensure the safe restart of travel and their overall economy, they will take market share, investment and jobs from countries that do not. Canada must get moving,”
“It has been said that weak organizations are destroyed by crises, good organizations survive them and great organizations are improved by them,” wrote Vrooman. “YVR is a great organization.”
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