Federal financial relief essential for Atlantic Canada’s airports to overcome economic impact of COVID-19
For immediate release
(HALIFAX) March 24th, 2020 – As Atlantic Canada’s airports continue their work with public health agencies and airline partners to facilitate the safe passage of thousands of people to their homes in our region, they are looking ahead to what they need to endure, and remain financially viable through the weeks and months ahead with the impact of COVID-19.
Current estimates indicate that passenger traffic across the country will decline by 70 per cent between March and June 2020. A number of carriers have suspended flying altogether for the shortterm while others have made significant reductions in flights and capacity.
“The reality is that once Canadians are back home, people will not be moving for the short-term following the important advice of our provincial health authorities,” says Monette Pasher, executive director of Atlantic Canada Airports Association. “And this is just the beginning as we expect more airline capacity changes in the coming days, weeks, and months ahead as passenger volumes continue to fall off.”
Full-year estimates show a decrease in traffic of between 40 and 50 per cent, or upwards of 4.2 million passenger movements for the region. As of today, industry officials estimate that operational revenue loss for Atlantic Canada’s airports could be between $92 and $118 million in 2020 due to COVID-19. The region’s airports are urging the federal government to provide both relief for cash flow for small airports and relief on airport rent for the next year as part of the nation’s overall economic recovery.
To limit losses, airports are cutting operating budgets and cancelling capital programs. Pasher says,”Airports can cut their budgets down to bare essentials and implement severe austerity measures, but there are still substantial fixed costs associated with operating essential transportation infrastructure. Airports are remaining open to provide an essential service to Canadians to facilitate the repatriation of Canadians abroad and safe passage for Medevac flights.”
“Atlantic Canada’s airports are not-for-profit businesses and operating surpluses, if any, are reinvested in maintaining airport infrastructure to protect the health and safety of travellers,” says Pasher. “Our airports simply aren’t generating the surplus cash flows to absorb an economic shock like COVID-19. Help will be necessary for our industry.”
The ACAA is urging the federal government to deploy a targeted financial assistance program to ensure the continued financial viability of Canada’s airports. The focus would be to help alleviate operating losses and mitigate the longer-term negative effect on our industry, which will be pivotal to boost economic activity in our communities when things rebound.
Specific action steps identified by Canada’s airports include:
- Rent relief of at least one year. Many airports pay rent to the federal government and rent relief would allow these airports to redeploy these funds to continue operations and support recovery strategies. According to the Canada’s airports, rent relief is the quickest direct mechanism with which the federal government can support Canada’s National Airports System airports to help them deal with their cash flow challenges.
- Financial relief for reduced cash flow. Direct non-repayable funding support to offset operating shortfalls will also be needed. This is particularly important for smaller airports that pay very little rent or do not pay rent at all.
About Atlantic Canada Airports Association
The ACAA represents 12 airports in Newfoundland and Labrador, Nova Scotia, New Brunswick and
Prince Edward Island. The region’s airports move over 8 million passengers and approximately 60,000 metric tons of cargo annually and account for more than 46,000 jobs in the region. Atlantic Canada’s airports are significant economic generators with passenger and cargo traffic generating over $4.4 billion annually into the Atlantic Canada economy.
Monette Pasher, Executive Director, Atlantic Canada Airport Association
Cell: (902) 802-5651