Canadian travellers are facing increased airport fees, report says. Here’s why – National | 24CA News
Canadian travellers are dealing with elevated airport charges after the COVID-19 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 observe on Monday.
Unlike American airports, which obtained important monetary assist throughout the peak of the pandemic, Canadian authorities subsidies principally focused airways moderately than airport authorities, in keeping with the credit standing company.
The latter solely benefited from “modest” help, similar to Transport Canada’s Airport Critical Infrastructure Program, launched in May 2021, which offers $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 said.
During the pandemic, Toronto Pearson International Airport twice elevated its airport enchancment charge by $5 to $35 for departing passengers. That adopted losses of $383 million and $350 million in 2020 and 2021, respectively.
That charge 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 resulting from inflation, per the company. Tariff will increase have turn out to be “necessary” as airports look to restart capital tasks at larger prices after many have been paused throughout 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 observe said.
“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 impression on the rankings of main Canadian airports, which stay largely protected by their monopolistic standing and resilient demand from shoppers.
© 2023 The Canadian Press
