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Airport sees fare business surge

Domestic travel increase offsets 3% decline in cargo shipments

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A surge in domestic passenger traffic helped Winnipeg's international airport weather a downturn in cargo shipments over the first half of this year.

The Winnipeg Airports Authority, which operates the Richardson International Airport, said Wednesday passenger volumes at the airport climbed by 6.5 per cent to 1,762,996 from 1,655,092 in the first half of 2011.

That helped take some of the sting out of a three per cent decline in cargo shipments for the same period.

Christine Alongi, director of communications for the airports authority, said the increase in passenger volume was fuelled by a surge in domestic travellers -- up 8.2 per cent to 1,395,262.

"We've seen that really soar, no pun intended. It's nothing specific, but certainly there is demand from business travellers. And we're into the summer travel season."

The jump in domestic travel helped to offset a 2.6 per cent decline in the number of passengers flying out of Winnipeg to U.S. destinations -- 233,998 versus 240,166.

Daniel-Robert Gooch, the president of the Canadian Airports Council, which has been studying the negative impact of cross-border shopping on the country's airline industry, said Wednesday it's estimated cross-border leakage last year for the Winnipeg airport was about 24 per cent. In other words, nearly one in every four U.S.-bound travellers who could have flown out of Winnipeg opted instead to drive to Grand Forks or Fargo and catch a cheaper flight from there.

In Windsor, Ont., and Fredericton, the leakage was 100 per cent and 75 per cent respectively, Gooch added.

He said a host of factors make airline tickets more costly in Canada, including higher taxes, airline fees and security charges, and Canadian airports have to pay millions of dollars a year in rent to the federal government, while U.S. airports do not.

The airports council has been lobbying the federal government for years to make it a more level playing field, and will continue to do so, he said.

"But we're in an environment where the government is not particularly interested in looking at reducing taxes and fees at this particular time," he said.

Alongi blamed the first-half decline in cargo shipments -- the tonnage figures were not available -- on a global drop in cargo traffic, which meant fewer shipments coming into and going out of Winnipeg.

"But we think we'll see a slight recovery in the fall," she said, as city retailers bring in extra stock for back-to-school promotions and the Christmas shopping season.

The airports authority's second-quarter financial results, which were also released Wednesday, show revenues were up but cash flow from operations was way down for the three-month period.

The corporation said revenues rose by 11.2 per cent to $20.9 million from $18.8 million in the second quarter of 2011. However, cash flow from operations -- the item used to measure operating performance -- plummeted by 57.1 per cent to $7.9 million from $18.4 million.

Airports authority president and CEO Barry Rempel warned earlier this year cash flow would take a hit over the next few years because the corporation has begun paying interest on the hundreds of millions of dollars it borrowed to build the new airport terminal, which opened last Oct. 31.

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 26, 2012 A3

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