Politics

Airport industry group asks transport minister for financial relief due to collapse in travel demand

Canadian airports are poised to lose $1.3 billion amid an ongoing global travel collapse triggered by COVID-19, says the group representing the country's airports.

Canadian airports expected to lose $1.3 billion

The international arrival area at Trudeau International Airport in Montreal Monday, March 16, 2020. The head of the Canadian Airports Council says airports are poised to lose $1.3 billion due to COVID-19. (Ryan Remiorz/The Canadian Press)

Canadian airports are poised to lose $1.3 billion amid an ongoing global travel collapse triggered by COVID-19, says the group representing the country's airports.

"This is a situation that's unprecedented," Canadian Airports Council president Daniel-Robert Gooch said in a phone interview. "Airports are having some conversations now about what their financial futures look like."

Many major airlines will be operating at half capacity by next month due to border closures and slashed flight schedules, causing fees garnered from carriers and passengers to dry up, Gooch said.

He has asked Transport Minister Marc Garneau for relief on the roughly $380 million in rent that non-profit Canadian airport authorities pay Ottawa each year.

Gooch said support could come as a rent deferral or reduction that would help offset fixed costs such as runway maintenance.

Airports directly employ about 194,000 workers, some of whom will see their jobs in jeopardy as terminals and check-in counters clear out, he added.

"We know that the airport concessions — food, beverage, retail — they have been hit as well," he said.

The Canadian Airports Council represents 53 airports, including the country's three largest that account for the bulk of federal airport rent.

Earlier on Tuesday, the head economist at the International Air Transport Association said revenue losses around the world are already surpassing the trade group's worst-case projection of US$113 billion and threatening to send multiple airlines into bankruptcy.

Brian Pearce said a recovery from the novel coronavirus pandemic will not come until September at earliest. "The challenge we face today is: Can airlines last that long before they run out of cash?"

On Monday, Prime Minister Justin Trudeau announced Canada will close its borders to most foreign nationals except Americans and bar anyone, including Canadian citizens, with symptoms of the illness from boarding flights to this country.

Air Canada said hours earlier it would halve its seat capacity in the second quarter and withdraw its earnings forecast for 2020 and 2021 amid a "severe drop in traffic" due to the outbreak, which has infected more than 168,000 people and killed at least 6,600, according to the World Health Organization.

The announcement sent company shares into a tailspin, with the stock plunging to $16.23 by midday Tuesday — roughly one-third of its price two months ago.

WestJet announced Monday night it was suspending all commercial operations for international and trans-border flights for a 30-day period.

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