DEER LAKE, N.L. — Passenger traffic at the Deer Lake Regional Airport decreased by 82 per cent from March to August and a corresponding decrease in revenues due to the COVID-19 pandemic’s disruption in air travel means passengers will pay more to fly in 2021.
The Deer Lake Regional Airport Authority announced Tuesday that as of Jan. 1 the passenger facilitation fee will increase from $20 to $25.
“We have very few options available to us to deal with the worst financial crisis in the history of the airport authority,” said Tammy Priddle, authority president and CEO, in a press release.
The airport authority relies on passengers and flight activity to generate revenue to support operations and invest in capital infrastructure to meet the needs of the communities it serves, said the release.
While the airport remained open throughout the pandemic to support the movement of essential workers and goods, the authority lost $1.4 million in revenue in the last six months.
“Our cashflow has all but dried up and there are limits to the amount of debt we can service,” said Priddle.
“With no end in sight to the pandemic and 14-day quarantine travel restrictions, there are very few users and therefore, very little revenue is being generated,” said Priddle.
“We have implemented a number of cost-saving measures over the last several months to reduce the impact, however, with the majority of our costs being fixed, we have no other option but to increase fees as the revenue will be required to sustain our operation.”
It has reduced spending by limiting non-essential purchases, deferring capital projects, decreasing contracted services and decreasing the size of parking lots to reduce snow clearing. But these initiatives are not enough to make up for the over 50 per cent decrease in revenues.
To add to the challenge the airport has to complete a $7.8-million runway rehabilitation in 2021 that Priddle said cannot be delayed and will consume all to the authority’s capital reserves.
It’s expected the longevity of the pandemic will have severe impacts on the authority with a projected loss over the next five years of over $5 million.
The authority along with other Canadian airport authorities has continually advocated to the federal government for sector specific support. Government support, cost savings and increased revenue generation will ensure the airport is financially stable to support economic recovery within the region, said the release.
“Increasing the cost for travel at this time is certainly not something we wanted to do, it’s a last-resort as we have limited options available to us,” said Priddle.
