Toronto Pearson Airport Traffic Down Almost 70% Over Last Year

Toronto Pearson Airport Traffic Down Almost 70% Over Last Year

November 10, 2020 ctn_admin

The Greater Toronto Airports Authority says passenger activity at Toronto Pearson Airport fell nearly 70% during the first nine months of 2020 compared to last year.

The GTAA on Tuesday reported its financial and operating results for the three- and nine-month periods ended Sept. 30, 2020. Passenger activity decreased 69.5 per cent during the first three quarters of the year compared to 2019.

“This decrease is due to global aviation industry challenges, specifically the COVID-19 pandemic,” officials said.

“The GTAA has taken important steps to protect passenger health by introducing leading health and hygiene practices at Toronto Pearson, as well as partnering on research studies to facilitate the safe relaxation of blanket quarantine restrictions,” said Deborah Flint, President and CEO, GTAA. “Our industry continues to face significant barriers to recovery due to border closures and quarantine requirements.

“We believe the competitiveness of Canada’s aviation sector is at stake and welcome the recent statement by Transport Canada that the government intends to enter into discussions regarding financial relief to support airports through this period.“

“The COVID-19 pandemic and resulting economic contraction has had, and is expected to continue to have, a negative impact on demand for air travel globally. Toronto Pearson has experienced material declines in passengers and flight activity during the first nine months of 2020, as compared to the same periods in 2019.

“Due to the pandemic and the resultant severe financial impacts and economic contraction, there have been multiple travel restrictions including border closures and flight and route cancellations by air carriers. The reduced activity is having a material negative impact on the GTAA’s business and results of operations, including aeronautical and commercial revenues and airport improvement fees.

The GTAA has implemented significant reductions to operating and capital expenditures, including the reduction in planned 2020 capital spend by $265 million and temporary closure of over 40 per cent of its terminal facilities. In addition, the reduction of approximately 500 positions announced in July 2020, represents a reduction of 27 per cent of the GTAA’s workforce.

The GTAA has also successfully completed an amendment to the Corporation’s Master Trust Indenture (“MTI”) that temporarily exempts the GTAA from complying with its rate covenant, which is comprised of two covenant tests, for both fiscal years 2020 and 2021.

The Government of Canada has waived ground lease rent for the period of March 2020 to December 2020. The GTAA is also participating in the Canadian Emergency Wage Subsidy (“CEWS”) program.

The pandemic has had a significant negative impact on air carriers operating at the Airport, including Toronto Pearson’s key hub airlines, Air Canada and WestJet. During the third quarter of 2020, the GTAA amended its long-term aeronautical fees agreements with each of the carriers to adjust the fees paid under the agreement to reflect the reduced current and projected flight activity.

Many of the GTAA’s commercial partners, concessionaires and tenants have also experienced significant negative impacts to their businesses. The GTAA has provided financial accommodation and other assistance through a number of programs including payment abatements, deferrals and contract relief through proposed and amended contracts, but in doing so, has taken a measured approach so as to offer these arrangements to partners that are in good standing and that the GTAA believes will be critical partners post COVID-19.

These relief actions have, and will continue to have, over the period covered by the relief, an adverse impact on the GTAA’s business and related cash flows. The deferred payments are expected to be paid over the 2020 to 2021 periods.