Impact of COVID on Atlantic Canada’s Airports

Atlantic Airports are in a difficult position as our passengers (and revenues) have dropped significantly. We have experienced a 92% drop from April to August and a 70-80% drop in passengers for all of 2020. This will have a substantial impact on cash flow and future financial viability of our regions airports with a severe trickle-down effect to our respective communities.

Full-year estimates show a decrease in traffic of between 70-80 per cent, or more than 3.7 million passenger movements for the region. As of today, industry officials estimate that revenue loss for Atlantic Canada’s airports could be $140 million in 2020 due to COVID-19. The region’s airports are urging the federal government to provide relief for airports as part of the nation’s overall economic recovery.

All efforts are being made to keep Atlantic Canada’s airports open for business.

Airports are facilitating the movement of cargo, essential goods & medical supplies for our Atlantic provinces. During a pandemic we need to ensure that our communities are connected and health services can reach the people who need it.

The Government of Canada recently announced support for our National Airport System (NAS) by waiving federal ground lease rent payments for 10 months in 2020. Airport rent is a commission charge our larger airports pay the federal government on gross revenue. This was a welcome first step for Canada’s airport network and necessary to assist with cash flow relief at our nations largest airports, however it will have a negligible impact on Atlantic Canada’s airports. Seven of our regional and local airports pay no rent. Overall, rent relief in our region is projected to be 25% of what our airports paid to the federal government in 2019.

Substantially more support is needed for all of our airports in this region to address their immediate cash flow challenges and to ensure that they can recover and serve Canadians when the time is right.

Specific action steps identified by Canada’s airports include:

Financial relief for reduced cash flow. Direct non-repayable funding support to offset operating shortfalls will be needed.
More support will be also be needed for airports in the coming years in order to support economic recovery for airports, as capital reserves built up over the last decade to invest in safety infrastructure are rapidly declining at small airports, especially those who recently jointly invested with the Federal and Provincial Governments in long-overdue safety related projects in 2018 and 2019.

The federal government has been cooperative and collaborative so far and have been responsive in listening to our concerns and gathering data on the potential impact of this issue for all of Canada’s airports.

It will be virtually impossible to recover with the fixed costs and capital-intensive assets we are required to manage as an essential service for our region. To mitigate the financial impact, our airports will be significantly cutting operating budgets and deferring or cancelling capital projects, even with these efforts we are still not able to significantly offset all of the operating losses. Airports are doing everything they can to preserve jobs and remain safe & compliant, but it won’t be possible without assistance.