Airport will take years to recover from ‘devastating’ 2020, CEO says at annual meeting

Airport kiosks
Airport kiosks

It will take “several years” for the pandemic-battered Ottawa airport to restore its full complement of pre-COVID routes and get delayed infrastructure projects back on track, officials said this week after the facility presented a 2020 financial summary that was awash in red ink.

Ottawa International Airport Authority CEO Mark Laroche didn’t sugar-coat the impact of the pandemic on the facility’s bottom line during the airport’s annual general meeting on Thursday.

“We knew the impact (of COVID-19) would be devastating,” Laroche said. “What we could not have predicted was the magnitude.”

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Noting total passenger volumes plummeted nearly 75 per cent compared with 2019, Laroche said the airport racked up a net loss of $51.2 million last year after posting a surplus of $5.1 million the previous year. 

Revenues nosedived in 2020, with airport improvement fees charged to passengers ​– the terminal’s No. 1 source of income ​– falling by more than 70 per cent to $14.6 million. Terminal and landing fees as well as concession revenues and parking fees also declined sharply as the facility’s overall revenues tumbled from $138 million in 2019 to just $48.6 million last year.

“We knew the impact (of COVID-19) would be devastating. What we could not have predicted was the magnitude.”

The airport paused virtually all capital projects, laid off 18 employees and didn’t fill nearly a dozen other vacancies in a bid to cut expenditures. Laroche said the facility might need to borrow as much as $100 million to cover off what are expected to be even greater losses in 2021.

With most of the Canadian population now projected to receive their first doses of vaccine by the end of the summer, airport officials are hoping the tide will soon start to turn for the beleaguered industry. 

But they caution it won’t happen overnight.

Fewer than 20 flights a day now serve the airport, compared with about 110 pre-pandemic. Airport authority chair Code Cubitt urged travellers to include Ottawa in their flight plans once they feel comfortable with air travel again, noting that only when airlines see sufficient demand will they reinstate international routes.

“YOW’s route map will look very different for some time to come,” he added, referring to Ottawa by its airport code name. “Airlines need to understand actual demand from our community as they consider which routes to establish first.”

Laroche said he and the heads of other medium-sized airports in Edmonton, Halifax and Winnipeg are lobbying the federal government to reinstate international flights to their terminals as soon as it is deemed safe to do so. 

He said the lack of a firm timeline for resuming foreign flights has sparked “unprecedented uncertainty” in the industry as it works with airlines to lay out a framework for a potential return to the skies.

Return to London?

“I can’t stress enough that it will take several years for YOW to build back its air service and its facility improvement plans,” he added. “Some destinations will likely not return in the foreseeable future.”

He said one of the airport’s top priorities will be restoring Air Canada’s daily service to London’s Heathrow Airport, which was slated to be upgraded to Boeing 787-8 Dreamliner service before those plans were upended by the pandemic.

He said the airport is also keeping close tabs on Lufthansa’s plans for YOW. 

The German carrier announced in 2019 it would operate five weekly flights between Ottawa and Frankfurt from May to October, replacing Air Canada’s daily flights that ran during the same season. Those plans were also put on hold when COVID-19 hit.  

“The pace of recovery will determine when these route possibilities are back on the front burner,” Laroche said, adding YOW was “very close” to adding a route to Paris before all international flights were grounded last year. 

“These things take time, and unfortunately, the pandemic has left our industry scarred and consequently (with) much less appetite to try unproven or marginal routes.”

Officials said the return of Delta Air Lines and United Airlines service to U.S. hubs such as Chicago’s O’Hare International Airport, New York’s LaGuardia Airport and Detroit is still up in the air.

“Unfortunately, the market dynamics are challenging at best,” spokesperson Krista Kealey said during the question-and-answer session.

Meanwhile, Laroche said the airport authority will continue to pursue millions of dollars in federal funding to help finance the terminal’s station on the Trillium LRT Line, which is slated to be completed before the end of next year. 

The CEO said he has the backing of Ottawa South Liberal MP David McGuinty as well as Mayor Jim Watson and remains confident the feds will come through with the cash in the near future.

“Unfortunately, with little to no (airport) revenues, the station is now unaffordable,” he said.

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