Air travellers face higher airport fees following pandemic disruptions: report

TORONTO –

Canadian travellers are dealing with elevated airport charges after the pandemic grounded revenues and led to extra debt for airports throughout the nation.

COVID-19 disrupted the airport sector’s “relatively stable” and resilient business mannequin, as Canadian airports have added round $3.2 billion in mixed debt, DBRS Morningstar stated in an evaluation word on Monday.

Unlike American airports, which obtained important monetary assist through the peak of the pandemic, Canadian authorities subsidies principally focused airways relatively than airport authorities, in response to the credit standing company.

The latter solely benefited from “modest” assist, equivalent to Transport Canada’s Airport Critical Infrastructure Program, launched in May 2021, which supplies $571.2 million over 5 years.

“The Canadian government has not demonstrated a willingness, or perceived a material need, to provide significant financial support to Canadian airports,” the company acknowledged.

During the pandemic, Toronto Pearson International Airport twice elevated its airport enchancment payment by $5 to $35 for departing passengers. That adopted losses of $383 million and $350 million in 2020 and 2021, respectively.

That payment equally rose at Montreal’s Pierre Elliott Trudeau International Airport from $30 to $35 in 2021. The Regina Airport Authority plans to hike airport enchancment charges by $10 per departing passenger to $30 on April 1.

Airports’ working prices and capital expenditures are additionally on the rise as a consequence of inflation, per the company. Tariff will increase have grow to be “necessary” as airports look to restart capital tasks at increased prices after many have been paused through the pandemic.

“The elevated pressure for Canadian airports to raise fees reflects the combined effect of the increased leverage during the pandemic and the unsubsidized and not-for-profit nature of the Canadian airport business model,” the evaluation word acknowledged.

“The longer it takes an airport to grow/rebuild traffic and match the designed capacity of facilities, which were developed with borrowed money, the longer such pressure will persist.”

The company stated it doesn’t anticipate a shift in competitiveness between Canadian and U.S. airports to have any materials influence on the scores of main Canadian airports, which stay largely protected by their monopolistic standing and resilient demand from shoppers.

This report by The Canadian Press was first revealed March 6, 2023.