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whatnext Mar 17, 2021 4:29 PM

A good article in the Globe & Mail about how the Trudeau gov't blew their chance to make a few billion by offloading the airports while they could:

Bleeding cash, Canada’s once-booming airports face bleak choices and dim prospects
Konrad Yakabuski
PUBLISHED 6 HOURS AGO

Back when the Trudeau government sought to make infrastructure the leitmotif of its first-term economic strategy, it considered privatizing Canada’s then-booming airports to free up capital to invest in public transit and green-energy projects.

At the time, no one seemed more bullish on the idea than Michael Sabia. Then the head of Caisse de dépôt et placement du Québec, Mr. Sabia had seen the pension fund manager’s stake in London’s Heathrow Airport generate juicy returns over the years and he longed to see similar opportunities arise at home. As a member of then-finance minister Bill Morneau’s advisory council on economic growth, in 2016, he enthusiastically backed its recommendations for a partial or full privatization of Canada’s airports. Most observers assumed the Caisse would pounce at the chance to own a piece of them.

The Liberals ultimately decided against privatization in the face of stiff opposition from the people who then ran Canada’s airport authorities and polls showing Canadians cool to the prospect of selling off what were perceived as prized public assets. As a result, the government turned its nose up at billions of dollars in proceeds that could have gone toward other infrastructure priorities or debt reduction. Privatization would also have enabled airports to tap equity markets to fund growth instead of constantly dinging passengers with higher fees and piling on debt that had reached a cumulative $15-billion when the pandemic struck...
Canada’s airports were already at a competitive disadvantage to their U.S. counterparts prior to the pandemic. Having undertaken expensive – or extravagant, say their critics – investments in new terminal buildings in recent years, many came to rely on debt and ever-increasing per-passenger “airport improvement fees” to cover growing operating and debt-service costs.

Those days are over. In the postpandemic era, Canada’s airports will need to adopt a more consumer-friendly business model if they hope to lure back travellers. The current model, akin to operating Canada’s airports as public utilities, has proved ill-suited to changing market conditions and competitive pressures. Its days were numbered even before the pandemic.

The Greater Toronto Airports Authority and the Vancouver Airport Authority were able to tap debt markets in 2020 to shore up their liquidity. But airports in Montreal, Calgary and Ottawa, however, appear to be on far shakier ground and may need to take more drastic action....


https://www.theglobeandmail.com/busi...oices-and-dim/

Truenorth00 Mar 17, 2021 4:38 PM

This is a poor take. Nobody knew a pandemic was going to happen. And the public didn't want airports taking on a ton of debt just for privatization.

nname Mar 17, 2021 8:37 PM

Summary of AC Long-Haul change for S21 so far. I won't list detail as they're going to change anyways.

Suspension:
YYC-NRT
YUL-PVG
YVR-TPE
YVR-SYD
YVR-BNE
YVR-KIX
YYZ-LIM
YHZ-LHR
YYT-LHR

Reduction:
YUL-ALG
YYZ-BRU
YYZ-FRA
YVR-FRA
YYC-FRA
YYZ-LHR
YVR-ZRH
YUL-GVA

The list include flight 1-99, 800-899 with the new flight number and does not include any Rouge routes that had not been moved to mainline. See this list for reference

J81 Mar 18, 2021 3:12 AM

Quote:

Originally Posted by whatnext (Post 9220691)
A good article in the Globe & Mail about how the Trudeau gov't blew their chance to make a few billion by offloading the airports while they could:

Bleeding cash, Canada’s once-booming airports face bleak choices and dim prospects
Konrad Yakabuski
PUBLISHED 6 HOURS AGO

Back when the Trudeau government sought to make infrastructure the leitmotif of its first-term economic strategy, it considered privatizing Canada’s then-booming airports to free up capital to invest in public transit and green-energy projects.

At the time, no one seemed more bullish on the idea than Michael Sabia. Then the head of Caisse de dépôt et placement du Québec, Mr. Sabia had seen the pension fund manager’s stake in London’s Heathrow Airport generate juicy returns over the years and he longed to see similar opportunities arise at home. As a member of then-finance minister Bill Morneau’s advisory council on economic growth, in 2016, he enthusiastically backed its recommendations for a partial or full privatization of Canada’s airports. Most observers assumed the Caisse would pounce at the chance to own a piece of them.

The Liberals ultimately decided against privatization in the face of stiff opposition from the people who then ran Canada’s airport authorities and polls showing Canadians cool to the prospect of selling off what were perceived as prized public assets. As a result, the government turned its nose up at billions of dollars in proceeds that could have gone toward other infrastructure priorities or debt reduction. Privatization would also have enabled airports to tap equity markets to fund growth instead of constantly dinging passengers with higher fees and piling on debt that had reached a cumulative $15-billion when the pandemic struck...
Canada’s airports were already at a competitive disadvantage to their U.S. counterparts prior to the pandemic. Having undertaken expensive – or extravagant, say their critics – investments in new terminal buildings in recent years, many came to rely on debt and ever-increasing per-passenger “airport improvement fees” to cover growing operating and debt-service costs.

Those days are over. In the postpandemic era, Canada’s airports will need to adopt a more consumer-friendly business model if they hope to lure back travellers. The current model, akin to operating Canada’s airports as public utilities, has proved ill-suited to changing market conditions and competitive pressures. Its days were numbered even before the pandemic.

The Greater Toronto Airports Authority and the Vancouver Airport Authority were able to tap debt markets in 2020 to shore up their liquidity. But airports in Montreal, Calgary and Ottawa, however, appear to be on far shakier ground and may need to take more drastic action....


https://www.theglobeandmail.com/busi...oices-and-dim/

The busiest airports in Canada are already privatized for the most part. I dont know who wrote the article but the should do more research

zahav Mar 18, 2021 5:13 AM

The airports are not privatized in terms of ownership. They are run by local airport authorities, but they are government owned. The airport authorities run the airports, pay rent to the Feds, and then invest their revenue into running and building the airports.

thenoflyzone Mar 18, 2021 7:15 PM

^Exactly.

And who knows, had Trudeau privatized the airports 4-5 years ago, would those companies still be afloat today? They would have inherited the massive debt of our major airports, and wouldn't have had enough time to pile up cash on the side.

There is by no means an easy solution. Of course, what might be perceived as the easiest solution might be for the government to regain operational control of the airports once again and call it a day. But that will end up costing the taxpayer even more.

Dominion301 Mar 18, 2021 8:08 PM

Quote:

Originally Posted by thenoflyzone (Post 9222188)
^Exactly.

And who knows, had Trudeau privatized the airports 4-5 years ago, would those companies still be afloat today? They would have inherited the massive debt of our major airports, and wouldn't have had enough time to pile up cash on the side.

There is by no means an easy solution. Of course, what might be perceived as the easiest solution might be for the government to regain operational control of the airports once again and call it a day. But that will end up costing the taxpayer even more.

Indeed. The cheaper option would be to permanently eliminate rent (or a symbolic $1 a year)...like the airport authorities have been asking for, for the past 20 years. Give them low interest loans and use the former rent money to pay down the debt. At the very least, if rent comes back, the formula should drastically change to a fixed rate (e.g., $2) per enplanement. That would give both the airports and the airlines with cost certainly. Also, any rent collected should go to ACAP to help the small airports with airside infrastructure safety projects. ACAP funding has not been inflation-adjusted.

The airports themselves were dead set against privatization. Like you said, if that had happened, we could have been faced with bankrupt airports by now.

Djeffery Mar 19, 2021 1:42 AM

Sorry to come out of left field, but I figured there are people on this thread who would know. All the re-patriation flights that happened last year at the start of the pandemic, who paid for those? Was listening to a podcast today and the subject of aid for the airlines came up. A comment was made that "the airlines ran all those flights out of their own pockets without being paid and so giving aid is the least the government can do".

Is that true, the airlines didn't get paid for all those flights? I thought that usually the government arranges those type of flights and charges the people that use them. Maybe the pandemic was a different situation, but I still find it hard to believe the airlines did that for free.

Pegasus Mar 19, 2021 4:33 AM

Quote:

Originally Posted by Djeffery (Post 9222641)
Sorry to come out of left field, but I figured there are people on this thread who would know. All the re-patriation flights that happened last year at the start of the pandemic, who paid for those? Was listening to a podcast today and the subject of aid for the airlines came up. A comment was made that "the airlines ran all those flights out of their own pockets without being paid and so giving aid is the least the government can do".

Is that true, the airlines didn't get paid for all those flights? I thought that usually the government arranges those type of flights and charges the people that use them. Maybe the pandemic was a different situation, but I still find it hard to believe the airlines did that for free.

These links may help answer your questions . . .

https://www.thestar.com/news/canada/...canadians.html

https://ppforum.ca/publications/comi...ate-canadians/

casper Mar 19, 2021 6:37 PM

Quote:

Originally Posted by Djeffery (Post 9222641)
Sorry to come out of left field, but I figured there are people on this thread who would know. All the re-patriation flights that happened last year at the start of the pandemic, who paid for those? Was listening to a podcast today and the subject of aid for the airlines came up. A comment was made that "the airlines ran all those flights out of their own pockets without being paid and so giving aid is the least the government can do".

Is that true, the airlines didn't get paid for all those flights? I thought that usually the government arranges those type of flights and charges the people that use them. Maybe the pandemic was a different situation, but I still find it hard to believe the airlines did that for free.

It is complicated. Generally the person coming back paid. They would either be using a return ticket from their pre-covid time or buying one on the special flight.

The government had an emergency loan program for any Canadian stranded overseas of $5,000 through the Canadian consulate to help find a way of returning home. That could be used to buy a seat on a repartition flight.

The reason the government organized repartition flight is some countries closed their boarder and airlines were not able to operate under normal commercial rules. The flights were a way bypass those rules to get Canadians home.

whatnext Mar 19, 2021 6:48 PM

How many weeks has it been since the government claimed they were "very close" to working out an airline aid package? :rolleyes:

Djeffery Mar 19, 2021 10:26 PM

Thanks both of you for that info. Those flights probably weren't money makers but they weren't done for free. I suspect the podcast host misunderstood "free" for "break even"

casper Mar 20, 2021 1:28 AM

Quote:

Originally Posted by Djeffery (Post 9223457)
Thanks both of you for that info. Those flights probably weren't money makers but they weren't done for free. I suspect the podcast host misunderstood "free" for "break even"

If you were WS or AC at the point in time you would be happy to do it at cost.

If you have aircraft sitting on the ground costing you a lease payment, insurance, etc. making no money, if someone comes and offers to hire you at cost that is fantastic because your now breaking even instead of taking a loss.

Dominion301 Mar 22, 2021 5:38 PM

Apparently AC want to launch seasonal YUL-YQR-YXE-YUL and YUL.

For the former, I wonder if YOW's seasonal Sask triangle route will be lost as a result?

hollywoodcory Mar 22, 2021 5:43 PM

Quote:

Originally Posted by Dominion301 (Post 9225291)
Apparently AC want to launch seasonal YUL-YQR-YXE-YUL and YUL.

For the former, I wonder if YOW's seasonal Sask triangle route will be lost as a result?

Also YVR-YHZ too. I'm kind of surprised to see even YYC-YHZ still scheduled this summer too.

Sounds like AC is focusing on domestic this summer for leisure travel.

Dominion301 Mar 22, 2021 5:50 PM

YOW's February pax stats:

Sector / Feb-20 / Feb-21 / % Change
Dom: 290,829 / 19,182 / -93.4%
TB: 63,333 / 0 / -100.0%
Int'l: 67,150 / 0 / -100.0%
TTL: 421,312 / 19,182 / -95.4%

Sector / YTD 2020 / YTD 2021 / % Change
Dom: 569,079 / 53,256 / -90.6%
TB: 125,210 / 0 / -100.0%
Int'l: 133,405 / 0 / -100.0%
TTL: 827,694 / 53,256 / -93.6%

12 Months Rolling / % Change vs Year End 2019
Dom: 516,214 / -87.1%
TB: 37,883 / -94.5%
Int'l: 34,977 / -91.8%
TTL: 589,074 / -88.5% <-- this was still almost 1 million last month

The meaningful indicator
Month-Over-Month Change
Sector / Jan-21 / Feb-21 / % Change
Dom: 34,074 / 19,182 / -43.7%
TB: 0 / 0 / #DIV/0!
Int'l: 0 / 0 / #DIV/0!
TTL: 34,074 / 19,182 / -43.7%

Alexcaban Mar 22, 2021 6:20 PM

Quote:

Originally Posted by Dominion301 (Post 9225291)
Apparently AC want to launch seasonal YUL-YQR-YXE-YUL and YUL.

For the former, I wonder if YOW's seasonal Sask triangle route will be lost as a result?

YUL-YLW 4 weekly too on the 220

Denscity Mar 22, 2021 10:33 PM

Quote:

Originally Posted by Dominion301 (Post 9225291)
Apparently AC want to launch seasonal YUL-YQR-YXE-YUL and YUL.

For the former, I wonder if YOW's seasonal Sask triangle route will be lost as a result?

Montreal to Montreal then Montreal? Must be a typo.

Dominion301 Mar 22, 2021 10:40 PM

Quote:

Originally Posted by Denscity (Post 9225629)
Montreal to Montreal then Montreal? Must be a typo.

Yeah it was supposed to say YUL-YLW.

AC are being mighty optimistic at this point for summer 2020.

zahav Mar 22, 2021 10:59 PM

Good for Kelowna if they score YUL, although it seems really optimistic indeed. Seems odd that AC would do YUL-YLW before YVR-YHZ or even YVR-YQB. Stranger things have happened though!


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