With future uncertain, airport halts capital spending program
It could take years for service levels to return to normal, CEO warns
With revenues “all but disappeared” and the full recovery of air travel uncertain, the Ottawa Airport Authority has frozen its capital spending program, cut the wages of its employees and redrawn its budget.
Authority president and CEO Mark Laroche said Friday it could take years for the airport to build its passenger numbers back up to the levels seen in 2019, when 5.2 million people moved through the terminal. It means, he warned, that some of the airport’s existing destinations — there are now 45 — may not return when the COVID-19 pandemic ends.
“I cannot realistically promise,” he said, “that all 45 destinations served by YOW before the pandemic will return quickly, including our European air service. I can guarantee, however, that we will continue to work closely with each airline to rebuild our service as quickly as economically viable for our airlines.”
Larcoche said he thought service to Frankfurt, Germany might be one of the European routes most at risk after the pandemic.
The airlines make their route decisions, he said, based on projected passenger loads. “My big concern is to lose connections to major hubs in Washington, New York, Detroit, Chicago,” he added.
The outbreak of COVID-19 has led to what Laroche described as a “devastating decline” in flights in and out of Ottawa International Airport. Air Canada and WestJet have cut 85 to 95 per cent of their flights and Porter has suspended all service until June 1.
Earlier this week, on Tuesday, the airport recorded 13 departures with 430 passengers, some of whom may not have shown up for their flights. On a typical day, the airport has 7,000 departing passengers. On Wednesday, the airport had just 120 departing passengers.
The Ottawa International Airport is designated as critical infrastructure, which means it has to remain operational to support passenger and cargo planes, along with government, military and Ornge air ambulance flights.
The airport also has to maintain most of its staffing — to ensure safety, security and the ability to respond to an emergency — even though its revenues have “all but disappeared,” he said.
Airport authority employees have been forced to accept an acrossthe-board 20 per cent wage cut and reduced hours to avoid layoffs, but those measures could be reconsidered, Laroche said, in light of the federal government’s recently announced wage subsidies for businesses hard hit by the pandemic.
“We’re working hard to avoid layoffs, but obviously if traffic does not return to the same level, we’re going to have to rightsize the airport,” he said. “It all depends on how fast traffic returns.”
The airport authority has also halted $35 million in capital spending programs, which means renovations inside the terminal and construction of the Alt Hotel Ottawa Airport will be delayed. The hotel project will be postponed for at least six months.
“There’s so much uncertainty that it’s going to take time to finalize a plan: What we intended to do in the next two years is going to take longer and it may have a different outlook,” he said. “The plan was based on an airport with 5.2 million passengers in a growth mode. This is not going to be a 5.2-million-passenger airport for a while.”
Laroche said even optimistic projections suggest passenger volumes will not return to pre-pandemic levels for at least a year.
The airport authority’s budget for next year is now being redrawn, he said, and will assume passenger volumes of anywhere between 50 and 75 per cent of last year’s numbers: “It’s unchartered territory. We don’t know what the response of the traveller will be. Right now, people are not in the mindset of booking trips for next winter, for example.”
In a conference call Friday, Laroche told reporters that a few flights continue to land from the United States, even though they’re mostly empty. Arriving passengers, he said, are screened by the Canada Border Services Agency, which is responsible for ensuring that visitors and returning Canadians are aware of the government’s mandatory, 14-day self-isolation policy.
No Ottawa airport authority workers have been diagnosed with COVID-19, he said, although two are now under investigation for flu-like symptoms.
The authority, a not-for-profit corporation, operates and develops the airport, which generates an estimated $2.2 billion in annual economic activity in Ottawa and Gatineau. About 5,000 people work at the airport campus.