A global credit ratings business has downgraded the Edmonton Regional Airports Authority’s rating in light of the decline in passenger volumes amid the coronavirus pandemic.
DBRS Limited said the issuer rating and revenue bonds rating has been changed from A (high) to A.
It is also forecast that that passenger volumes will not reach pre-coronavirus levels until 2024, though a vaccine could lead to a faster recovery.
Before the pandemic, DBRS said passenger volumes had declined by 1.2 per cent to 8.15 million in 2019, largely as a result of the Boeing 737 MAX aircrafts being grounded in March 2019.
It also points out economic challenges. DBRS said it “considers ERAA’s exposure to Alberta’s local economy, including the energy sector and oil price shocks, to be negative for medium-term passenger forecasts.”
Domestic traffic accounted for 83 per cent of passenger volumes in 2019, with trans-border flights making up 12 per cent and international travel accounting for the remaining 5 per cent.
Revenues also decreased in 2019 by 0.9 per cent to $231.7 million.
The impact of travel restrictions greatly impacted passenger volumes, with travellers in April and May 2020 totaling only six per cent compared with the same period in 2019.
Things improved slightly in June 2020, with passenger volumes reaching 12 per cent of June 2019 levels.
And while more flights are opening up, the Edmonton Regional Airports Authority is forecasting 2.7 million passengers in 2020, or 34 per cent of passenger volumes compared to 2019.
Despite the challenges with air travel in the pandemic, Flair Airlines says it is beginning service in Fort McMurray, Prince George, Regina and Saskatoon. Flair said it is also returning flights to Victoria.
“We continuously receive requests from our passengers to service these communities,” Flair CEO Jim Scott said. “Many of these areas are experiencing reduced accessibility, and we know that Canadians need affordable air fares now more than ever. We are committed to supporting these communities across the country as they safely reopen to travel.”
Flair also said passengers can expect to answer a health check questionnaire, visual mask check and have their temperature taken prior to boarding any Flair planes due to the threat of COVID-19. Enhanced cleaning and the use of HEPA filters is also continuing.
John Mullins, Flair’s vice president of guest experience and airports, says the tourism market is still very slow right now, but there’s still a need for essential services, for both passengers and cargo.
He says other airlines have pulled out of these cities during the pandemic.
“There’s just so many communities right now that have, in a sense, been left abandoned,” he said.
“They need either commuters to get to work or commuters to get home when driving is just not an option.”
But Mullins says Flair believes there’s a business case for these routes beyond coronavirus.
“These are permanent, long term.”
In order to operate the new routes, Flair is calling back previously laid off employees – 45 cabin crew members and 20 pilots.
From Edmonton, Flair is currently flying to Toronto, Vancouver, Kelowna and Prince George. Flair is now also offering flights to Victoria through Vancouver.
Flair says it is still running at between 25-35 per cent of what it was in 2019.
The company hopes these new routes will drive more business.