A hopeful look to the future

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This article was published 27/04/2023 (911 days ago), so information in it may no longer be current.

The Winnipeg Airports Authority, like its peers across the country, came out of the pandemic adept at undertaking some tricky manoeuvres, what with planes not flying and fixed costs remaining.

With its “user-pay” revenue model — airport improvement fees, landing fees and passenger processing revenue account for close to 70 per cent of total revenue — it meant that revenue fell by more than 50 per cent in 2020 and rose only slightly in 2021.

But last year, revenue was back to 94 per cent of its pre-pandemic revenue, to $131.8 million and at the WAA’s annual meeting on Thursday stakeholders heard an upbeat story about community-minded stewardship, a levelling off in its financial footing and a hopeful look to the future.

Brita Chell, chair of the WAA’s board said, “In any journey a lot of the focus is on where we are going but seldom do we reflect back on where we have come from.”

But since last year was the WAA’s 25th anniversary of the transfer of control of the airport from the federal government to the WAA, there was occasion to do just that.

Chell said the establishment of the WAA on Jan. 1, 1997, “Meant that decisions on the airport could be approved in the community, by members of the community for the community.”

Since then, the WAA has solidified the important role the airport plays in the community after having invested more than $1 billion in the campus over those years for an entity that now generates about $3 billion in annual economic output.

Nick Hays, the CEO of the WAA, unveiled a new five-year strategic plan that emphasizes the airport’s community focus after a consultation process that included meetings with more than 60 organizations in the province.

“From those engagements we have shaped a new vision and strategic priorities that will collectively guide us over the next five years,” he said.

Those priorities include people and culture, customers and community, environment, operational excellence, digitization, financial strength and air transportation and logistics services.

With a little more than three million passengers in 2022, the airport is still ways off from the 4.5 million in 2019, but Hays said, “Our latest forecast has us returning to that level as early as 2024.”

The addition this fall of WestJet’s direct flights to Los Angeles was the most impactful new route for the airport in some time. WestJet officials have indicated it has plans for more new route investments for Winnipeg this year.

But even with passenger volumes coming back, Hays said it will take longer than that to recover financially.

Its long-term debt grew to almost $700 million — it had to go to the market with another $100 million bond offering in 2021 — but the WAA is back within its debt coverage levels.

Still, with revenues tied to passenger and plane volumes, Hays said the WAA is keen to diversify its revenue base.

Cargo traffic continues to grow every year providing a growing revenue stream and the WAA provides third-party management for smaller airports. For instance, a WAA subsidiary operates the Iqaluit airport and provides safety services for airports throughout Nunavut, which earns about $11 million in annual income. But a major source of future revenue growth might come from its 220 acres of developable land in its western footprint that is part of CentrePort south.

With the servicing of that land coming soon, Hays said, “We hope to unlock the huge potential this land holds.”

He said their projections suggest the potential for 2.5 million square feet of total building development for things like temperature-controlled logistics, warehousing, agri-business and advanced aerospace.

But even before all that development starts taking shape, the WAA is about to break ground on a new $62-million multi-tenant air cargo logistics facility. The 140,000-square-foot building will go up at the end of Sargent Avenue on the site of the old Air Canada cargo building, which is now fully demolished.

martin.cash@freepress.mb.ca