Airport fees increasing by $7

Airplane landing in the evening with beautiful sunset background

Release from Halifax Stanfield:

A 90 per cent decline in passenger traffic and associated revenues due  to the global disruption in air travel from the COVID-19 pandemic has led Halifax  International Airport Authority (HIAA) to increase Airport Improvement Fees (AIF)  beginning in 2021. 

AIF revenue is used to invest in necessary capital infrastructure maintenance and  improvements and to service the debt obligations associated with those long-term  investments. Beginning on January 4, 2021, the Halifax Stanfield AIF will increase from  $28 to $35 for each originating passenger travelling outside Nova Scotia. Intra-provincial  passengers originating at Halifax Stanfield and travelling to J.A. Douglas McCurdy  Sydney Airport will see their AIF increase from $15 to $22. 

“We have very few options to deal with a financial crisis of this magnitude – it’s unlike  anything we have experienced in 20 years of managing the Halifax airport,” said Joyce  Carter, President & Chief Executive Officer, HIAA. “In addition to significant cost-cutting  measures we’ve undertaken over the past several months we must generate sufficient  revenue to meet our financial obligations for debt and infrastructure management. Our  only options to generate more revenue in this environment are through additional  borrowing and fee increases, and we can’t continue to borrow our way through this  crisis with no end in sight.” 

As a corporation without share capital, HIAA relies on passenger and flight activity to  generate revenues required to support airport operations and invest in capital  infrastructure that meets the needs of the communities it serves, now and in the future.  Essentially, the airport operates on a user-pay system – with very few users due to the  pandemic and associated travel restrictions, there is very little revenue being  generated.

Capital investment at the airport is funded by annual operating surpluses, debt and AIF  revenue. These three sources of capital funds have been used by HIAA to invest in  important facility improvements and purchase equipment required to meet aviation  safety regulations and accommodate a nearly 20 per cent growth in passenger traffic  and 35 per cent increase in cargo processed over the past decade. As a result of the  severe financial impact from the pandemic, surpluses have become large deficits and  there are limitations to the amount of debt the organization is capable of servicing. This  leaves AIF revenue as the only practical source of required investment capital.  

“Raising fees at a time like this is not something we take lightly. We have substantial  fixed costs associated with safely managing our airfield, terminal building and property,  no matter if one or 1000 flights land here,” said Paul Brigley, Vice President Finance and  Chief Financial Officer, HIAA. “Capital investments are necessary each year to maintain  the safety and integrity of our facilities and operations, and to maintain compliance  with regulatory changes. The pandemic has and will continue to result in additional  investments to ensure a safe, healthy passenger journey. It’s simply not possible to defer  this type of work – the airport must be safe and meet all regulatory requirements for  aircraft activity.”  

Since the pandemic began, HIAA has consolidated terminal operations and parking  lots, powered down equipment and lighting, cut discretionary spending, and reduced  its workforce by 25 per cent. These efforts have saved more than half of the airport’s  planned operating budget for 2020 since April, but HIAA is still facing a significant deficit  and rising debt loads. Increasing revenues, in the absence of other funding streams, is  necessary to maintain HIAA’s long-term financial viability.  

Halifax Stanfield is one of the most critical pieces of transportation infrastructure in  Atlantic Canada, and a key economic generator that will be essential to our region’s  recovery. Canada’s airports, including Halifax Stanfield, have played an important role  in the nation’s response to the pandemic from the beginning. The airport remained  open throughout the pandemic to serve those who needed to travel for work, school or  business, enable the efficient flow of goods and medical supplies, and support  medevac and crisis response.  

HIAA, along with other Canadian airport authorities, has continually asked the federal  government for reasonable, sector specific support in the form of long-term rent relief  and interest free loans to reduce debt incurred as a result of this extraordinary global  crisis. Government support, in combination with cost cutting measures and revenue  increases, will ensure the airport remains open and financially stable to further the  economic recovery of our province, region, and country. 

“The pandemic will have ripple effects on our industry for the foreseeable future.  Current projections range as low as 1.5 – 2.0 million passengers expected at Halifax  Stanfield in 2021 – that’s less than half of what we saw in each of the past three years,”  noted Carter. “The AIF represents a critical revenue stream that enables us to connect  our passengers and business partners to the world. We’re responsible for facilitating the  safe, efficient movement of people and goods, and we’re committed to ensuring our  financial ability to continue to serve our communities in the weeks, months and years ahead.”


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