Ottawa airport eyes more domestic flights as projected deficit balloons
By: David Sali, OBJ
Published: May 19, 2020 5:24pm EDT
Ottawa airport officials say they expect the country’s major airlines to start adding more domestic flights to the nation’s capital as soon as next month, but add they expect to face a massive budget deficit over the next two years.
Mark Laroche, the president and CEO of the Ottawa International Airport Authority, said the airport will probably have to borrow in the range of $150 million over the next two years just to cover its operating expenses. He said the terminal is “losing money every day” as the number of daily flights arriving and departing from YOW has dwindled to about 15, compared with well over 100 before the pandemic began.
“It’s going to be a big number,” Laroche told OBJ Tuesday when asked about the projected deficit at the facility. “There’s no revenue coming in.”
The airport had earlier pegged its forecasted 2020 budget shortfall at between $50 million and $75 million. But Laroche said that number could climb even higher after passenger traffic at the facility plummeted over the past two months as the aviation industry all but came to a standstill.
Fewer than 7,000 passengers passed through YOW’s gates in April, down a whopping 98 per cent from a year earlier, thanks largely to a ban on all international flights and most flights from the United States. To put that number into context, the total number of passengers in April was less than half of the more than 14,000 travellers who used the airport on an average day in February.
Just 309 passengers on Canada-U.S. flights passed through the airport last month, compared with more than 68,000 a year earlier. International traffic, which accounted for 32,000 passengers in April 2019, completely evaporated last month.
Air Canada and WestJet are expected to start adding a few more flights to their Ottawa schedules in June, Laroche said, adding he’s hopeful that Porter Airlines – which announced last month it was extending the temporary suspension of all its flights until June 29 – will resume its routes at the end of next month.
“We’re hoping that we’ll see some domestic pickup in June, but it all remains to be seen,” he said, adding “there’s no guarantees.”
In addition, Laroche said Delta plans to resume its regular Ottawa-Detroit routes at some point next month, although the Canada-U.S. border is still expected to be closed to all but essential travel until at least June 21. On Tuesday, an American Airlines flight from Philadelphia was the only arrival from south of the border, while there were no departures scheduled to go to the U.S.
Laroche said airlines are seeing “slight increases” in passenger bookings as the pandemic continues, but he said it’s still way too early to predict any type of real resurgence in domestic air travel.
“If (airlines) don’t have (sufficient) bookings, they just cancel the flight,” he said. “Everyone is flying blind a bit on projections.”
During a conference call with reporters in early April, Laroche suggested it will take years for the Ottawa airport to match its 2019 passenger numbers, and late last month the Canadian Airports Council predicted the country’s airport terminals would lose as much as $2 billion in revenues this year.
After drawing 5.1 million passengers in 2019, the Ottawa airport is on pace to see roughly three million travellers in 2020 – but the terminal is not likely to welcome anywhere close to that number as long as travel restrictions remain in place.
The CEO said the airport authority is looking at laying off as many as 30 employees, or about a quarter of its full-time workforce, in an effort to rein in expenses. At least $35 million worth of non-essential capital expenditures, including the construction of new concessions, have already been put on hold.
Meanwhile, a project that will see the passenger screening area moved from the second to third floor and redesigned to allow for greater physical distancing resumed on Tuesday after the province gave the green light to restart most construction activity in Ontario.
On Tuesday, Laroche reiterated that the industry faces a long uphill battle.
“There’s going to be a lot of adjustments in the aviation sector, so we do not know when it will be back,” he said. “I think it would be extremely optimistic to think that it’s going to be back within the next two years. Things are going to change.”
https://www.obj.ca/article/ottawa-airport-eyes-more-domestic-flights-projected-deficit-balloons
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