Will take ‘years’ for Ottawa airport to return to previous highs, CEO Mark Laroche says

airport
Photo by Jan Jasinski.

Passenger traffic at the Ottawa airport has plummeted more than 90 per cent since the COVID-19 pandemic began, officials said Friday, adding they believe it could be years before volumes return to pre-crisis levels.

Ottawa International Airport Authority CEO Mark Laroche told reporters on a conference call that just 430 passengers were scheduled to depart on a total of 13 flights from Ottawa last Tuesday – down from about 7,000 passengers on 100 flights on a typical day before the coronavirus outbreak began. 

Citing a recent report from credit rating agency Moody’s that Laroche said projects passenger volumes at the Ottawa airport will return to 2019 levels by the second quarter of 2021, he suggested that forecast is “optimistic” and said he thinks a rebound could take much longer.

The airport is now recasting its 2021 budget based on passenger projections of between 50 and 75 per cent of pre-crisis totals. About 5.1 million passengers passed through the airport last year.

“I believe it will take years to build our passenger numbers back to 2019 levels,” Laroche told reporters, adding later: “I hope I’m wrong.” 

Even once the economy starts to pick up again, Laroche said there’s a good possibility that Ottawa could end up losing some of its connections as cash-strapped airlines rocked by the downturn think twice about resuming less-popular routes.

“I cannot realistically promise that all 45 destinations served by YOW before the pandemic will return quickly, including our European air service,” Laroche said, noting Lufthansa has scrapped plans to restart its YOW-Frankfurt service. 

He said he’s also worried about losing routes to U.S. hubs such as New York City, Washington, Detroit and Chicago. 

Earlier this year, United Airlines announced it was planning to resume direct service this spring between Ottawa and Chicago’s O’Hare terminal, a route it suspended last year, but those flights have been put on hold due to the pandemic. Many other transborder flights have also been cancelled as the border between the U.S. and Canada has been closed to all but essential travel.

Planned hotel, renovations on hold

A non-profit organization, the airport authority generates virtually all of its revenues from landing fees charged to airlines, airport improvement fees charged to passengers and terminal fees as well as concessions and parking. 

Laroche said those revenues “have all but disappeared” since the crisis began, forcing the airport to put $35 million worth of planned capital expenditures – including a major renovation of the terminal’s food and drink concessions and a reorganization of the security screening area – on hold indefinitely.

Laroche also said those projects could end up looking different than originally expected.

“The plan was based on an airport with 5.2 million (annual) passengers in a growth mode,” he said. “This is not going to be a 5.2-million-passenger airport for a while.”

Laroche said while he welcomes the federal government’s recent decision to waive monthly rent at 21 airports across Canada, including Ottawa, it won’t have a major effect because airport rent is calculated as a percentage of gross revenues.

“As already mentioned, our revenues have all but disappeared, meaning that our rent obligation for 2020 would have been minimal,” he said.

Airport authority employees have taken a 20 per cent pay cut across the board as part of the cost-cutting measures, Laroche said. He said the agency plans to apply for the federal government’s 75 per cent wage subsidy program, adding more government relief will be needed to help airports get through the crisis. 

The economic fallout from COVID-19 has also halted Group Germain’s plans to build a $40-million, 180-room hotel with a direct pedestrian connection to the airport terminal. Originally scheduled to be completed in late spring 2021, the project has now been delayed at least six months, Laroche said.