A Candid Report About How COVID-19 is Affecting a Medium-Sized Canadian Airport

James Bogusz

James Bogusz has more than 18 years of experience working in airports, beginning in 2001 as a technology consultant with the Victoria Airport Authority. During his career he has held a number of progressively more senior roles. In 2018, Bogusz joined the Regina Airport Authority as its new chief executive officer.   

I recently reflected back on attending a major air service conference in February 2020, enjoying free conversation with colleagues, shaking hands and sharing ideas. Concerns about the potential of a pandemic were a matter of discussion but in no way diminished our efforts to secure air service for our respective communities. Prior to the economic slowdown that soon followed, Regina International (YQR) was the 15th busiest airport in the country, seeing nearly 1.2 million passengers per year. The airport serves a catchment area with more than 500,000 residents and contributes more than $800 million per year into the local economy. 

Like every airport in North America, our world changed in March. The Canadian government began implementing a reactive patchwork of rules as new health information about the novel coronavirus became available. As the month progressed, more and more arriving flights contained local passengers returning from abroad, and departures soon slowed to a crawl. Our airport staff and partners worked tirelessly around the clock to implement new processes and work with both provincial and federal health authorities to keep the public safe and updated with the latest information. I’m sure every Airport Improvement reader can relate to this story and understands first-hand the vital role airports played re-patriating residents to our respective countries.  

In April, flight activity fell off the cliff. Passenger volumes at YQR were only 1.8% of 2019 levels, and short- to medium-term projections were grim. With no industry-specific support being offered by our federal government, we were forced to lay off employees, slash capital and operating budgets, and look for opportunities to maximize the cash we had in the bank before incurring operating debt. 

Unlike our friends in the United States, Canadian airports have not had a CARES Act or reasonable equivalent. Our government has supported airports and other businesses with a partial wage subsidy and has forgiven some of the revenue-based rent we typically pay it. However, the total impact of these programs has made very little difference to the overall operating costs we incur. Like many airports in Canada, YQR is a private, not-for-profit corporation with a long-term lease from the government to operate the airport. The lease requires us to follow many rules designed for the safe and secure operations of the airport. In order to meet these obligations, there are only so many expenses we can reasonably eliminate. The other obvious option would be to increase our fee structure to airlines. However, they are also in an impossible situation, and doing so would not help encourage a recovery. 

As I write this, we are now seven months into the economic slowdown, and passenger traffic has rebounded slightly to around 20% of typical levels. This is still a long way off from being able to generate enough revenue to cover even our most critical expenses. The Canadian Airports Council and Airports Council International have been actively advocating for all of us with the federal government, and there has been a great deal of local advocacy underway here in our community. However, our cash reserves will be depleted before the end of the year, leaving us with little runway left before we are forced to make incredibly tough decisions that could potentially impact our entire region. 

Airports are economic engines of our respective communities and are worth saving. We admire some of the financial supports that have been put in place in other countries, but as of mid-September, Canadian airports have been left almost entirely to fend for ourselves. We won’t stop sending strong messages to Ottawa, and we expect that common sense will prevail. We just hope that the support won’t come too late. 

After almost 20 years in the industry, I regularly remind my staff and myself that these times will pass. Airports are incredibly resilient, and the underlying demand for social interaction and life experiences are something society cannot replace with online chats. Let us all hope that 2021 is a year of true recovery for our severely battered industry.

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