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With air travel at a standstill, the Winnipeg Airports Authority announced Monday it will increase passenger airport improvement fees by more than 50 per cent in an attempt to cover infrastructure costs.
Since 2013, passengers at James Armstrong Richardson International Airport were charged a $25 fee, earmarked to cover previous and future infrastructure spending as part of its user-pay model. Starting Sept. 1, that fee will go up to $38, foretelling what are expected to be not months, but years, of lingering decreases to passenger travel.
"Over 95 per cent of our revenue comes from air traffic, and that puts us in a situation where we have to look at increasing fees," said Tyler MacAfee, WAA spokesman.
"We don’t take these decisions lightly, but the reality is it’s a new industry at this stage, and we have to look at these things to ensure we remain sustainable."
As at airports around the world, traffic at the usually busy Winnipeg hub has taken a nosedive, which has put a major dent in its fee model, which raised $40 million toward infrastructure costs in 2019, and more than $550 million since it was implemented in 1998.
An average pre-pandemic day would have some 12,500 passengers making their way through the terminal, with each paying the $25 fee, before airlines take a six per cent cut. Some days during the novel coronavirus pandemic, fewer than 100 passengers arrived at or departed from the airport; traffic has since climbed to 300 or so each day, but represents roughly two per cent of normal levels.
Meanwhile, the total number of passenger flights has decreased by 75 per cent, and the flights that arrive and depart are far emptier than capacity.
Winnipeg’s airport is not alone in its struggles, and some industry professionals estimate the decrease in passenger traffic will take at least three years to return to normal — a prediction, not a guarantee.
Airports Council International, a trade organization, estimated in May there will be a reduction of more than 4.6 billion passengers and US$97 billion in revenue for 2020, compared to previous projections.
The airports industry is in a bind, given both supply and demand are at low points: two-thirds of the global fleet was grounded in the second quarter, and with closed borders, cancelled flights, and rising unemployment, the option of flying on the remaining third is not realistic or desirable to passengers even in regions that have begun to open up.
Consumer confidence, as well as industry adaptation, will play a major role in any return to normalcy.
Globally, there was a 90 per cent decline in traffic reductions at airports, with European airports reporting a 97 per cent decrease.
While other major airports in Canada have not taken the measure of increasing passenger fees, others are likely considering following suit. A May 22 release from the Canadian Airports Council warned without additional support, many of the country’s terminals would be forced to increase charges, and MacAfee expects others will soon follow the WAA’s lead.
Ben Waldman covers a little bit of everything for the Free Press.
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