City council has received a newly updated business plan for Lethbridge Airport and has voted in favour of a recommendation to keep running the facility as a City of Lethbridge department.
The Lethbridge Airport (YQL) Business Plan for 2021-2024 was presented at Tuesday’s meeting of city council, outlining a strategy to recover from COVID-19 passenger loss and continue forward with a plan for growth.
The city purchased the airport from Lethbridge County in July 2018, and Opportunity Lethbridge general manager Michael Kelly said a business plan was ready in January 2020, but then COVID-19 hit.
Kelly said the impact of the pandemic forced the team in charge of the business plan to pivot and make significant modifications to the strategy, resulting in a two-pronged approach focusing on both increasing passenger traffic and land development aimed at providing continuous revenue.
“(We need to) get diversity in our income out there and not just rely on passenger traffic,” Kelly said.
“Passenger traffic is very important, tourism is very important for Lethbridge and southern Alberta, but as we see from the economic situation that we’re in, we need to diversify.”
Kelly said the land development component will not only add a stream of lease money coming in from lease lands, but also tax dollars.
“That taxation money is very key because it can be utilized anywhere for our citizens, for any other projects that we have,” he said.
According to the business plan, when fully developed, the YQL lands could provide $10 million annually in lease revenue and an additional $10 million in tax revenue.
Kelly said compared to 2019, passenger traffic at Lethbridge Airport decreased by 97 per cent during the COVID-19 pandemic. He said the expectation is that the airport will be back to those pre-pandemic levels by 2023 or 2024.
For members of city council, the recovery of the airport is viewed as a key task.
“Strengthening the Lethbridge Airport has been a priority for this city council,” said Mayor Chris Spearman. “We know YQL is vital to the economic development, economic prosperity and tourism for the City of Lethbridge and the entire region.
“We’ve been through a rough patch with COVID-19 and airport volumes have dropped off. We need to rebuild confidence with the carriers, and we need to show that our community is committed to using a viable airport.”
As part of that commitment to the airport, council decided on Tuesday to continue managing the facility as a City of Lethbridge department. The management team at YQL will remain as it is, with the airport manager reporting to the city’s director of corporate and customer services.
The governance model was approved in a 7-1 vote, and will remain in place until YQL reaches a pair of key triggers: two consecutive years of $500,000 in net operating profit as well as more than 150,000 annual passengers.
When the airport reaches those two thresholds, the governance model will be revisited by the sitting city council.
As part of the approval, the city’s airport committee will be dissolved, and the governance structure will be reviewed every two years by council’s economic standing policy committee.
Last week, the city was awarded more than $583,000 by the Western Economic Diversification Canada’s Regional Air Transportation Initiative in support of critical improvements aimed at enhancing the public experience.
Before that, city council invested $2.3 million in order to secure $23 million in combined provincial and federal funding.