Terminal velocity
THERE IS STILL TIME TO STOP THE FALL, AIRPORT EXECS SAY, WITH CRUCIAL FEDERAL HELP
From convenient gateways to the world, to often-deserted portals. Few places in Canada have been as drastically transformed by the pandemic as the nation's smaller airports.
Just ask James Bogusz, chief executive of the Regina International Airport. When the pandemic struck more than a year ago, everything changed at the Saskatchewan capital's airport.
One-third of the staff was laid off. Shops closed. Other businesses were left “imploding,” Bogusz said.
“I'm the kind of CEO that likes to walk the terminal, talk to people, see what's going on. (But) to see what used to be the 15th-busiest airport in the country crater to 1.8 per cent, year over year, (of what it was) in passenger volume, my terminal was a ghost town.”
Now, more than a year into the pandemic, the big questions are whether and how that passenger traffic, and the money it brings in, will come back to mediumsized and small airports, and in what volume. The outlook isn't as bleak as you might expect, given that Canada's largest airlines — bleeding billions, with most of their fleets grounded — have suspended or dramatically cut back service to many cities.
People will want to fly again, many experts say. The pent-up demand may even be huge after all the travel restrictions Canadians have endured since March 2020. But unlike Canada's largest airports — those in Toronto, Montreal, Vancouver and Calgary, which have large populations and international routes batting for them, and are bound to come back the fastest — it's an open question how long, and at what cost to passengers, it will take for smaller airports to rebound.
Are the days of easy flying from home to catch big-city connections over?
Will hopping on your next winter getaway flight be as quick as a cab ride across town? Even if those flights from home return, some warn they may not be the bargain they once were.
Amid all that uncertainty, however, the skies have suddenly cleared on a big cost-cutting worry that had been hanging over seven of the country's mid-sized and smaller airports, including in Regina and Windsor, Ont.
Nav Canada, the non-profit that operates the country's air navigation services, said late last week it won't close air traffic control towers at those airports, where it had been reviewing operations.
“After considerable consultation with airlines, airports, industry associations, local officials and internal stakeholders, Nav Canada has elected to limit changes to services across the country,” the company said. “Nav Canada is committing that there will be no site closures at air traffic control towers or flight service stations across the country.”
A wave of relief followed, with Windsor Airport chief executive Mark Galvin calling it “a great outcome” for the border city next to Detroit, Mich.
Mayor Drew Dilkens said Windsor opposition was key in convincing Nav Canada to back off closing towers.
“We led this, we brought others on board and we gathered the momentum across the country, such that you had six premiers signing letters on behalf of the airports and sending them to the minister of Transport and prime minister saying, `You've got to stop this,'” Dilkens said.
No one is predicting the death of smaller airports, but some observers say their rebuild will take four to five years. More flights, and many passengers, will return once the pandemic wanes, they say.
“There's such a tsunami of demand (to travel),” said John Gradek, an industry analyst and former Air Canada executive who heads Mcgill University's aviation management program. “I hear it every day: `I can't wait to get into an airplane. I need my vacation, my time away.' ”
Flights to and from major airports account for much of the business at smaller ones. Many have worked hard to lure seasonal and charter flights.
But whether airlines can afford to restore those flights at their pre-pandemic frequency, let alone at the same price, will depend, many say, on how the larger global leisure and once-lucrative business-travel markets emerge from COVID-19'S hit.
One bright sign emerged last week, with a $5.9-billion federal bailout announced for Air Canada. That dangles a huge boost for a slew of smaller airports, with the airline required to resume service at 13 where it had suspended flights, including Gander, N.L., North Bay, Ont., Kamloops, B.C., and Yellowknife, N.W.T. At seven other airports where the airline made permanent cuts, it's required to seek agreements with other carriers to restart some flights.
In Regina, even with Bogusz predicting a quick return to 50 to 70 per cent of pre-pandemic passenger volume, business as usual looks a long way off. Further promising signs include the return of some service and a newly-created Vancouver-regina-toronto run by Flair, a low-cost carrier entering the market. But Bogusz's airport is down to just a half-dozen passenger flights a day, a fraction of its pre-pandemic business.
It's a similar story at smaller airports across Canada. Atlantic Canada's 13 airports lost $80 million last year. That meant chewing through safety nets, such as a runway repair fund built up during a decade.
“It's been a year now, essentially, using your credit card and taking on debt,” said Monette Pasher, executive director of the non-profit Atlantic Canada Airports Association. “That's the concern, getting our airports back to a better financial footing, so we don't have to recoup all of these costs on the backs of travellers.”
Bogusz faces the same crunch. “Frankly, we're out of money. We're into a line of credit. My line is good until June,” he said.
Both say federal relief — grants, not loans, the Regina boss stresses — is needed to keep things afloat until travel resumes. Airports pay Ottawa hundreds of millions nationwide through land leases, and Pasher wants to see rent waived beyond this year.
In London, Ont., halfway between Toronto and Detroit, airport chief executive Mike Seabrook says he's eager to hop on a plane to go see his out-of-province kids. But the London International Airport is down to a handful of scheduled passenger flights a day from several dozen before the pandemic. Three-quarters of the London terminal is closed off, staff remain laid off and the authority that runs the airport, which saw record passenger volume before COVID-19, lost $3 million last year.
“We desperately need a recovery this summer,” Seabrook said. “If we get a modest recovery, we'll be able to crawl back to a cash-positive position. But it's a scary proposition.”
Bogusz says the “gamechanger” will be when governments stop discouraging travel and the messaging, amid mass vaccinations, shifts to “travel safely.”
“That's what's going to save our industry,” he said, noting his airport can get by with fewer passengers, “but I can't make it work with 10 per cent.”