More flight cuts mean greater uncertainty for tourism industry, says airport CEO
The CEO of the St. John's International Airport says the loss of WestJet's St. John's-to-Halifax route is "depressing" and won't help Newfoundland and Labrador's tourism industry rebound this year.
The route cut, which comes into effect March 21, will suspend the three weekly flights between the cities until at least June 24 — and with them, says Peter Avery, will go a sizable chunk of a provincial industry that has been battered since last March.
"A lot of airline staff have been let go, airport authority staff have also been laid off," said Avery. "So for those that are still hanging on it's pretty grim."
Since early 2020 and the onset of the COVID-19 pandemic, air travel has been one of the hardest-hit sectors of the provincial economy, and Avery said the downward trend is set to continue.
"Our numbers in January were down 83 per cent over January of 2019," said Avery. "We're only about 20 per cent of the traffic levels where we normally are at."
Though the airport authority has cut its operating costs by over 20 per cent, he said, there are some expenses and services them remain necessary, forcing the airport to be creative in saving where they can.
"You still have to snow-clear runways and keep the lights on and keep functioning for basic essential services for the province, like medevac and essential cargo," said Avery. "We've closed areas of the terminal building, we changed our snow-clearing regimen, and closed non-essential areas for snow clearing, and even closed runways to try to cut down on our costs."
Hotels already feeling the pinch
Greg Ivany, general manager of the Holiday Inn Express & Suites near the St. John's airport, expects to see a drop-off in hotel stays with the suspension of the WestJet flights.
"It's hard to say right now exactly what impact it will have on us as an individual business, but with the tourism industry and travel industry as a whole, for the province it's a huge blow to have a supplier completely pull out for air access."
It's another blow for hotel operations, said Ivany, adding the cancellation could have wide-reaching effects across the province by limiting the options for essential travel.
"We're mostly seeing essential [travellers], so essential people coming in for medical appointments or, essential corporate for offshore or within Newfoundland itself," said Ivany. "But we have a lot of clients coming from Labrador for medical appointments."
Tourism industry set for another difficult year
While the airport authority has been able to buoy itself through operational cuts, Avery said they need to begin looking for alternative measures to bolster both the air travel and tourism industries. They'd like to see public health officials lower barriers but increase precautions.
"For countries and regions like ours that rely so much on the tourist season, you're seeing a big move towards point-of-entry testing."
Avery said that extra layer of precaution could salvage the coming tourism season, but the tentative date of June 24 for the return of the WestJet routes is later than he'd like.
"A lot of our tourism industry won't survive with a year like last year," said Avery. "What's going to make things turn around and make airlines change their decisions … is going to be the relaxation of our quarantine on our travel restriction measures."
As things are going now, said Avery, 2021 will not be a good year for the airport authority, or tourism in general.
"In December when we did our operating budget, we had projected that 2021 would be even worse than 2020. Our revenues were down 60 per cent in 2020, our traffic was down 75 per cent. We predicted our revenues would be down 65 per cent in 2021, and traffic would be down 80 per cent."
And, Avery noted, those predictions assumed a still-functioning Atlantic bubble, which hasn't been in effect for months.
While he acknowledged the province's comparatively rigid containment measures has successfully kept outbreaks at bay, Avery sees the arrival of a new COVID variant as evidence that the status quo may no longer be enough.
"What we really need now is to see measures change through point of entry testing, and even point-of-departure testing, to complement quarantine and hopefully reduce it over time, because that will stimulate demand."
I fear that you will see some of the smaller businesses end up having to close down, because there's a lack of vision for how long this is going to last. - Greg Ivany
Between the lack of business and the heightened regulations needed to maintain the industry through the pandemic, Ivany said, many business owners are wondering how much longer they can sustain the added pressure.
"That's the question of the hour," he said. "Right now we're struggling as an industry, and as an individual business, we're struggling."
While subsidies from the federal government have helped businesses like the Holiday Inn stay afloat through the worst of the pandemic, Ivany worries that there's no long-term plan.
"Should this go on much longer, I fear that you will see some of the smaller businesses end up having to close down, because there's a lack of vision for how long this is going to last," Ivany said. "And right now there are no long-term relief efforts."
