What is the best direction for the City of Quesnel to take to keep the Quesnel Regional Airport financially viable over the long term?
That is the question Quesnel council is grappling with, and at its Dec. 1 meeting, council had a long discussion around the challenges and opportunities the airport is facing.
The airport has been deeply impacted by the COVID-19 pandemic.
Central Mountain Air (CMA) experienced a significant decline in passengers in mid-March due to COVID-19, which led to a decrease in the number of flights to and from Quesnel and then ultimately a complete suspension of service in April.
It is expected that CMA’s suspension of service will result in a loss of approximately $275,000 to $300,000 in airport revenues in 2020 and that similar losses will continue into 2021 and possibly beyond that, depending on how long the pandemic remains a factor. Jeff Norburn, the city’s director of community services, shared the data while presenting a report to council to get the discussions going.
In response to the projected revenue shortfall, the city has taken steps to reduce capital and operating expenses, and Norburn says that at this time, it is expected that the net negative impact on the 2020 budget will be in the range of $30,000 to $40,000.
The city received $2.5 million in provincial funding through the COVID-19 Safe Restart Grants for Local Governments, and on Nov. 17, council approved using up to $30,000 to cover the anticipated airport deficit in 2020 and $82,000 to cover the airport capital allocations that would have been made in 2020 if revenue was sufficient.
“The primary conclusion of the report is while the COVID-19 Safe Restart program can be used to support the airport and allow it to remain sustainable during the COVID-19 crisis, it’s apparent that we are currently reliant on passenger service, which may or may not return after the pandemic subsides, in order to support the airport,” Norburn told council. “In light of that, more should be done to diversify the airport’s revenue. In recent years, we have attempted to attract commercial tenants and establish more aviation-related activities at the airport; however, the daily demands of operating the airport have made this difficult. In recent weeks, the airport and transit supervisor has shifted focus to work on pursuing new revenue streams, attracting new commercial activity and increasing existing revenue sources, recognizing that whether or not commercial flights return to Quesnel, or whether or not the airport remains certified, it is important that diversification of airport revenues be a priority.”
Norburn says despite COVID-19 and the suspension of CMA flights, there have been a number of positive developments at the airport this year.
“The airport remains an essential transportation hub for private and corporate air traffic, wildfire suppression efforts and air ambulance transfers,” he noted in his report to council.
The fire attack base has doubled in size this year, and the city signed a new five-year lease with a company that is interested in establishing a light manufacturing operation in Quesnel that may, at some point, involve shipping product by air throughout northern Canada.
“The combined direct impact of these two leases is an increase in airport revenue of nearly $20,000 a year,” said Norburn. “Additionally, there are indirect benefits to the community and the potential for secondary revenue for the airport through increased air traffic movements and fuel sales.”
Norburn says in recent months, charter flight activity has increased “considerably,” and fuel sales have been robust despite the absence of commercial scheduled flights.
READ MORE: Quesnel council approves new lease agreement for airport lands
Certified or registered?
One of the big questions council is looking at is whether or not the Quesnel Regional Airport should remain certified.
Public airports are either certified or registered, and the Quesnel Regional Airport is a certified airport.
Certified airports are organized under Canadian Aviation Regulations to protect both the fare-paying public and people who live in the vicinity of the airport who could be affected by unsafe airport operations, explained Norburn. Aerodomes must be certified if they are used by an air carrier as a main operations base or for scheduled passenger-carrying service.
Airport and transit supervisor Pucek explained to council scheduled charters that have between 10 and 19 passengers and more than 19,000 pounds require certification, but the airline operator could get their own certification in order to land at a registered aerodome.
In his report, Norburn notes that there has been no indication that Transport Canada has any intent to alter any airport’s status as a result of COVID-19, so while passenger flights have been suspended in Quesnel, there is no reason to think Transport Canada has any plans to de-certify the airport at this time.
“A long-term decision of whether or not the Quesnel Regional Airport remains a certified airport can be avoided for the time being, but a decision will need to be made after the pandemic subsides,” he said. “If passenger service does not return and there is no prospect for another carrier to provide service in the near future, it is likely that either the city or Transport Canada will determine that it no longer makes sense to retain certification.”
City staff recommends that if it is determined that CMA has no plan to return to Quesnel after the pandemic has subsided, the city “take all reasonable steps to attract another airline carrier” before relinquishing the airport’s certified status.
Mayor Bob Simpson says the COVID-19 pandemic is pushing council to address challenges it has been having at the airport for many years.
“We had a ton of problems that we were sort of wishing and praying would somehow resolve themselves, and year over year, we would just subsidize this entity,” he said. “It’s never been a good business case for us. I think COVID-19 has done us a bit of a favour by bringing this to a head, by really forcing us to take a look at this and take a look at the options. This is an opportunity for us to really make sure we just don’t have an open sore over there at the airport that we keep throwing money at and put a Band-Aid on. This is an opportunity for us to re-think this whole function.”
Simpson suggested to council there are three areas council needs some “very deliberate” recommendations on from staff.
The first is on the timeline for the city subsidizing the airport and maintaining certification.
The second area is advice from staff on the restructuring of the staffing at the airport if the airport is going to turn into a business unit needing a heavier focus on marketing and customer service, says Simpson.
Simpson says the third piece is to take the strategic actions proposed in Norburn’s report to diversify revenue sources and turn them into reasonable, attainable and manageable objectives and also to align proposed strategic actions with the city’s strategic initiatives, such as actions that support destination tourism, the regional food hub and the forestry initiatives program.
The strategic discussion around the airport will go back to the city’s Executive Committee before it comes back to council.
READ MORE: Quesnel council approves first allotments of COVID-19 Safe Restart Grant
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