5-year timeline for recovery at Gander and St. John’s airports
Garrett Barry · CBC News · May 12, 2021
A pair of reports issued by airports in Newfoundland and Labrador suggest the toughest years are still to come for the industry.
Both the Gander and the St. John’s airports released their annual reports this month, and both suggest revenues won’t fully rebound from the COVID-19 pandemic until at least 2025.
In fact, both airports expect to have larger operating losses in 2021 then they did in 2020, according to projections included in their reports.
“The issue the airport has is not what’s happened in 2020; it’s what’s going to happen between 2021 and 2025, which is when we project … passenger traffic to recover to 2019 levels,” said Reg Wright, CEO of the Gander International Airport Authority.
Even then, the Gander airport is projecting revenue to reach only $6.5 million — significantly less than the $10 million once anticipated for 2020.
The revenue losses mean the suspension of some construction projects and layoffs to some full-time and seasonal workers. The St. John’s Airport Authority reported it laid off 17 per cent of its staff to save $4 million.
Wright said recovery will be slow due to the potential emergence of new coronavirus variants and outbreaks, and the uneven vaccination pace around the world.
But he fears the traffic recovery will take longer in Gander, which may be a victim of a “geographically uneven recovery.” He said airlines, which are also hurting, will refocus their operations in bigger and more profitable centres.
“When they talk about small markets and getting back to them, they’re talking about places like Winnipeg and Halifax. So you can imagine where Gander sits in terms of recovery,” he said.
Feeling the pain
Wright said the withdrawal of several air routes from his airport, including the only routes leaving the province, has led to pain in the surrounding region — and not just for leisure travellers.
He compared it to losing high-speed internet access.
“All these problems suddenly arose; couldn’t get locums in from Halifax, so it affected the delivery of health care,” he said. “Essential workers were adding 7½- to eight-hour return journeys onto their trip west. Core samples — mining sector in central [Newfoundland] is on bust — couldn’t get those out.”
That’s partly why he says the provincial government will need to help prop up the air travel sector.
“My suggestion to them is they are going to have to take an active role in restoring air linkages. And in some cases, they might have to match airport subsidies or incentives for service that is critical to the economic well-being of the province.”
The Gander airport saw about 51,000 passengers through their doors this year, the lowest number on record.
In St. John’s, passenger traffic fell by 75 per cent in 2020, and airport CEO Peter Avery wrote in his report that it remains at a 50-year low.
“This is a devastating reality for an island reliant on air travel,” he wrote.
Both airports have made significant spending cuts a a result of the losses.
In St. John’s, airport management decided to indefinitely suspend the west terminal expansion project, which was set to add gates and baggage carousels.
The Gander Airport, for the first time in its history, shut down one of its two runways over the winter, to save money on maintenance.
However, the airport authority has decided to continue with their international lounge renovations. Wright said it’s being in done in the hope that the airport will be “in a position of growth at some point.”