The authority that operates Winnipeg’s main airport faces a $45-million deficit this year due to the COVID-19 pandemic, which has drastically reduced passenger volumes at James Armstrong Richardson International Airport as well as passenger-related revenue.
The expected drop in revenue also leaves the Winnipeg Airports Authority struggling to meet $32 million worth of debt-financing commitments this year, as well as $7 million worth of capital improvements that cannot be put off, president and CEO Barry Rempel said Wednesday.
“We don’t typically provide forward-looking advice. That’s not something that we’re required to do, but I thought it was important for you to understand what we’re looking at at the moment,” Rempel said Wednesday at the authority’s annual general meeting.
Passenger traffic at the airport went down from more than 10,000 thousand people a day in 2019 to fewer than 900 a day this year, he said.
While vacationing passengers started to return this summer, business travellers have not, he told a small, socially distanced group of people gathered in the east end of the departures corridor at Richardson International for the meeting.
The loss of revenue cannot be offset by cutting costs, most of which are fixed, he said. The airport has sealed off unused departure gates and cut back on staff in an effort to cut costs by 25 per cent, Rempel said.
“This has not been easy. It has not been easy on our people.”
Richardson also raised its airport improvement fee from $25 to $35 per passenger in an attempt to recoup some revenue.
This difficult year follows what Rempel described as a strong 2019, when the airports authority weathered challenges that included the grounding of Boeing’s 737 Max aircraft — which reduced airline capacity — and the implementation of a new passenger bill of rights, which diminished co-operation among various players in the airline industry.
The airports authority also ended 2019 with almost $585 million in long-term debt, most of it related to the construction of its terminal.
Rempel called those events “first-world problems” in comparison to the pandemic, which has left the airport in an unsustainable position.
He said without an increase in revenue, the airports authority will burn through cash reserves into 2021 and run out of room to borrow money in early 2023.
“We’re in the position, starting next year, [of] starting to borrow to continue operating. That’s not a good model,” he said.
Rempel called on the federal government to ease quarantine restrictions on passengers arriving from countries with as few, or fewer, cases of COVID-19 compared to Canada.
“New Zealand is a really good example, where they have far lower infection rates than we do, yet we require quarantine from anybody going,” Rempel said.
“New Zealand doesn’t require that of us, so there’s no reciprocity. We’re just saying, let’s make it reciprocal in markets where it’s safe to do so.”
Ottawa has provided $2 million in rent relief for the WAA, Rempel said. That pales in comparison to the assistance provided to American airports, he added.
Rempel said one of the his industry’s tasks is convincing passengers it’s safe to fly again.
“I almost didn’t come because of that, especially with the recent uptick in cases in Manitoba,” said Irtaza Azam, a tourist from Edmonton who was about to board a return flight home on Wednesday.
He said he ultimately decided to take a vacation and visit friends and family in Manitoba.
“It’s not like the virus is localized to Manitoba or anywhere else. It’s everywhere,” he said.
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