While Ottawa’s airport is slowly ascending from a pit of red ink as it begins to recover from the crushing effects of the pandemic, officials said this week it “will take some time” for the facility to rebuild its route network and return to operating at full capacity.
As COVID-19 restrictions ease, Ottawa International Airport Authority CEO Mark Laroche urged residents Monday to book tickets if they want to convince airlines to add more routes to the nation’s capital to their lists.
“We are not satisfied being a feeder to a large hub airport for decades to come,” he said during the airport’s annual general meeting, noting major U.S. carriers such as American and Delta have dropped the capital from their itineraries during the pandemic, with no timetable for their return.
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In the corporate world, failure, risk-taking and continuous improvement are often baked in the organizational culture. Importantly, non-profit organizations are not commercial businesses – nor should they be. The sector
“We hope to see all of our previous routes covered by one airline or another as quickly as possible as recovery builds.”
Laroche told the virtual gathering he sees plenty to be encouraged about as more carriers add Ottawa to their itineraries or re-establish routes that were suspended earlier in the pandemic.
For example, United reinstated its flights between Ottawa and Washington’s Dulles airport last fall, while WestJet and charter operators Air Transat and Sunwing began ferrying snowbirds to southern hot spots Cuba, Dominican Republic, Jamaica and Mexico in November.
In addition, Canadian budget airlines Flair and PAL launched service in and out of the capital last year. Last week, WestJet’s low-cost subsidiary Swoop entered the local market with flights to Edmonton, with plans to add Halifax and Winnipeg to its list of Ottawa routes later this summer.
‘This market is important’
While Edmonton-based Flair is currently in danger of losing its licence over questions about whether it meets domestic ownership requirements, Laroche said Ottawa has proven its worth as a sought-after destination for low-cost carriers.
“Whatever the outcome (of Flair’s licence review), this market is important,” he said.
Still, Laroche said the airport continues to navigate an uncertain path to the future as key employers like the federal government as well as private businesses grapple with what the return to the office will look like.
“We cannot disregard the impact these changes (such as hybrid work environments) could have on market demand at YOW,” he said, referring to the airport by its call letters.
More than 100 flights a day are now serving Ottawa’s terminal, compared with fewer than 20 at this point a year ago. The airport has already welcomed more than double the number of transborder and international passengers so far in 2022 than it did all of last year.
Laroche said the airport authority is working to keep burnishing Ottawa’s credentials as a major hub, such as talking with Toronto-based Porter about making the terminal a key part of its plans to expand to more U.S. and other foreign destinations.
He added that the airline is also in talks with Calgary-based budget carrier Lynx – which aims to operate 148 flights a week within Canada on more than a dozen routes by July – about putting YOW on its list, but said nothing has been finalized.
In addition, the airport CEO noted that many airlines rely on subsidies from various levels of government and local economic development agencies to make certain routes financially viable – an option that’s not available to him.
“Unfortunately, we do not have access to these types of incentives provided by other levels of government,” Laroche said. He said the airport is floating a plan to partner with the City of Ottawa and Ottawa Tourism to create an “air service development fund” aimed at enticing airlines to add more routes to the capital.
Fewer than 1.2 million passengers travelled through YOW last year, the airport authority said Monday, below the 1.4 million who passed through the terminal in 2020 as COVID-related travel restrictions continued to wreak havoc with the industry.
But airport officials had at least some cause for optimism as they surveyed the terminal’s 2021 financial statements.
Net losses down
The number of domestic travellers ticked up from just over one million in 2020 to 1.14 million last year, while the airport trimmed its net loss from $51.2 million two years ago to $36.7 million in 2021 thanks to a series of cost-cutting initiatives.
Meanwhile, the airport generated income of $56.6 million last year, nearly 17 per cent more than the $48.6 million it brought in the year before.
Airport improvement fees charged to passengers – the facility’s No. 1 source of income – jumped more than 30 per cent to $19.3 million, due in part to a fee hike from $28 to $35 per passenger that was imposed last summer.
Most of the airport’s other sources of revenue, including terminal and landing fees as well as concession revenues and parking fees, were flat or declined year-over-year as YOW’s total passenger count fell. The airport issued $100 million in bonds to help cover its losses.
While the airport authority paused most major capital projects last year in an effort to cut costs, work at the terminal is now heating up.
Construction began Monday on a new taxiway – the first major tarmac infrastructure project at YOW in 25 years. And Laroche said work on the revamped concessions area – a plan that was unveiled with much fanfare in 2019 – will start this summer, with the first outlets, including a new Big Rig restaurant and brew pub, slated to open next year.
Meanwhile, he said the airport station on the LRT’s north-south Trillium Line, which received a $6.4-million funding boost from the feds last summer, is on time and on budget and should be completed in the next few weeks.
However, it will be a while before the new station handles any passengers. Last week, the city said the light-rail extension likely won’t be finished until next summer – about a year behind schedule – due to supply chain bottlenecks and labour shortages.
Laroche also said Group Germain remains committed to building a 180-room hotel under the Alt banner that will be connected to the airport terminal. He gave no updated timeline for construction, which was originally scheduled to be completed last spring, saying only that the Quebec-based hotelier is “actively working to resolve challenges” surrounding the project.
“Like all hotels, the pandemic hit them hard,” Laroche said.
