CITY AIRPORT SEEKS AID
YYC faces $67M deficit
The Calgary International Airport Authority issued a public plea for federal and provincial assistance Tuesday, the same day it acknowledged it is facing a $67-million deficit this year due to the COVID-19 pandemic.
During an annual general meeting held via webcast, airport authority president and CEO Bob Sartor said YYC suffered a 95 per cent year-over-year decline in passenger volumes in April and May, during the height of Covid-related travel restrictions and lockdowns.
By comparison, the terrorist attacks of Sept. 11, 2001, only led to a four per cent decline in passenger volumes, while the 2008 financial crisis resulted in a 2.5 per cent decline in airport traffic.
“Nothing could have prepared us for our new reality of COVID-19,” Sartor said. “Every worst-case prediction we put in front of our board became outdated before they received a copy.”
While Sartor said there has been a slight uptick in passenger numbers in June and July, the airport is facing a 55 per cent decline in forecast revenues, to $201 million, for the year.
While the federal government has already waived ground lease rents for Canadian airport authorities until the end of the year, Sartor said YYC would like to see that extended to a five-year period. The $44 million the Calgary Airport Authority paid to the federal government in rent in 2019 was the single biggest line item on the non-profit organization’s profit and loss statement, Sartor said.
In addition, YYC is asking for access to low- or no-interest loans to help it pay for its forecast cash deficit this year.
“This is not a handout or a bailout, but we cannot afford to pay interest on the debt that we take on,” Sartor said.
Due to the cancellation of the vast majority of international flights and a significant reduction in domestic flights since the start of the pandemic, 50 per cent of the terminal space at YYC is currently closed to passengers and the public. More than 80 per cent of the airport’s eating and shopping outlets are temporarily closed, and demand for parking, rental cars, taxis and all other airport services has declined by more than 90 per cent.
On any given day, as many as 50 aircraft are sitting idle on YYC’S aprons and taxiways, Sartor said.
In an effort to cut costs, YYC — which earns its revenues from airport improvement fees charged to travellers departing from Calgary, as well as landing and terminal fees charged to airlines — has already laid off one-third of its 24,000 employees, some temporarily and some permanently.
But Sartor said cutting costs is not enough, as there are many unavoidable fixed costs associated with running a safe and secure airport. In addition, the airport has had to make investments in enhanced cleaning and sanitization measures.
“It is very likely we will have to increase fees to guests, airlines and partners,” he said. “We are asking the government of Canada and the province of Alberta to come forward with financial support … the stakes are very high. At risk to Calgary are the billions in GDP (we generate) and the 50,000-plus jobs (we create) directly and indirectly.”
On Tuesday, Alberta’s Economic Development and Tourism Minister Tanya Fir said the provincial government recognizes the critical importance of airports and airlines to the economy.
“One of the pillars of our investment growth strategy that we will be rolling out is a focus on aerospace and aviation,” Fir told reporters. “So we’re continuing to consider possible options, and that’s what I can say at this time.”
In an email, Amy Butcher — spokeswoman for federal Transport Minister Marc Garneau — said the COVID-19 pandemic has created an unprecedented crisis for all aspects of the Canadian transportation industry.
“We understand the impact this is having and we continue to work with Canadian airlines, airports and partners during this challenging time,” Butcher said.
Sartor said the Calgary International Airport is now forecasting it will only receive 6.4 million passengers in 2020, the same number of passengers it welcomed in 1996 when the city and its airport were much smaller. In 2019, YYC set a new record with 18 million passengers passing through the facility.
Depending on what happens with the virus, it could take three to five years for the Calgary International Airport to recover to 2019 levels, Sartor said.
“This will be a slow and measured recovery but, I assure you, we will recover,” he said.