Regina airport seeking bailout as airlines suspend flights to sun destinations

·3 min read
Regina airport seeking bailout as airlines suspend flights to sun destinations

The Regina International Airport is likely to face further challenges following Friday's announcement by Canadian airlines that are cancelling service to sun destinations.

Air Canada, WestJet, Sunwing and Air Transat have agreed to suspend service to the Caribbean and Mexico until the end of April, as the federal government introduces new mandatory quarantine rules in an effort to fight the spread of COVID-19.

While there have been no direct flights from Regina to sun destinations during the pandemic, the loss of service will still affect Regina air travellers.

"Even though we have these massive reductions in our passenger demand, we do still have a little bit of service left to Canadian hubs like Calgary, Vancouver and Toronto," said James Bogusz, president and CEO of the Regina Airport Authority.

"This will further erode the demand to go to those hubs if those customers were planning to depart from one of those destinations."

Ed Sims, president and CEO of WestJet, said the federal government asked the airlines to temporarily halt some of their flights.

"The government asked, and we agreed," said Sims.

"While we know that air travel is responsible for less than two per cent of cases since the start of the crisis, and even less today, we recognize the government of Canada's ask is a precautionary measure."

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'Don't have much left to cut'

Bogusz says the Regina Airport Authority has been petitioning the federal government for months for some financial support.

"We've already done our part," he said.

Passenger traffic at the Regina airport has been reduced to 10 per cent of normal, resulting in over 30 per cent of airport staff getting laid off, Bogusz said.

"We've burned through our cash, we're now working through our credit line," he said. "So we don't have much left to cut, frankly."

The airport is also losing its ability to self-fund its operations.

"We can not sell enough parking or sandwiches, and we certainly don't have enough planes landing to be able to meet our most basic operating needs."

The federal government has provided the Regina airport with a wage subsidy and rent relief, but Bogusz says it's not enough. He did not disclose how much aid the airport is looking for, but said the airport has lost millions since the COVID-19 pandemic started.

Neil Cochrane/CBC
Neil Cochrane/CBC

"On the operations side, we've lost well over $6 million in 2020. We haven't done our year-end, but we're projected to lose $8 to $9 million in 2021 operating revenue. That's what we [use to] pay our power bills, that's how we pay our staff, that's how we pay our property taxes, amongst all our other expenses."

Aviation industry pleads for aid

On Thursday, aviation industry representatives pleaded with MPs on the House of Commons transportation committee for direct aid for alines.

Mike Mueller, senior vice-president of the Aerospace Industries Association of Canada, warned that Canadian companies would struggle to compete in the future with businesses in countries like France, the U.S., and Germany — which have spent billions of dollars on bailouts for airlines and related companies.

Bogusz says airports are also going to need some type of bailout in order to survive.

"We're asking the federal government to support those core operations costs just until they can start encouraging Canadians to travel again," Bogusz said.

"But until then there is no other source of revenue we can pull, and as we fall further into debt it becomes an impossible situation for our airport, because those debt levels are going to be nearly impossible to repay."

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