Halifax Airport Reduces Losses in 2022
HALIFAX — There was good news and bad news at the Halifax Stanfield International Airport AGM on Thursday. The bad news is the airport operated at a loss of more than $7 million in 2023. The good news is this number is 10 times better than the combined loss of $75 million from the two pandemic years that preceded it.
Revenues in 2022 were $111.4 million, up 131 per cent from 2021. Incredibly, 55 per cent of operating revenue came from “non-aeronautical” income, such as parking fees and concessions. Total passengers also nearly tripled, going from 1.1 million to 3.1 million.
Total expenses, meanwhile, clocked in at $119.2 million, which was $35 million more than 2021.
“While HIAA continued its efforts to limit expense growth, the dramatic increase in overall activity levels directly impacted general operating costs,” said Paul Brigley,the HIAA’s chief financial officer. “This included significant startup costs for areas of the airport that were idle during the pandemic. In addition, increased amortization, higher debt servicing costs caused simply by more debt, and additional investments in air service stimulus programs added to total expenses in 2022.”
“While we don’t like losses, this is compared to combined losses of $75 million in 2020 and 2021. When looking at capital investments in 2022, HIAA maintained efforts to moderate our capital investments and focus on new initiatives on strategic priorities and necessary investments to maintain the safe and efficient operation of the airport.”
Anyone who travelled through the airport in 2020 or 2021 would have had a difficult time finding a place to eat or drink. The pandemic caused most businesses inside the airport to close either temporarily or permanently. But in 2022, 70 per cent of concessions were open again, including four new food and beverage businesses.
“When it comes to passenger activity in 2022, at the start of the year, we were expriencing record low volumes,” noted Joyce Carter, the president and CEO of HIAA. “This was due to the prime variant creating a spike in Covid-19 cases. By the summer season, when restrictions were lifted, case numbers were lower.”
“I’m proud to say that Halifax Stanfield entered the year as Canada’s second fastest recovering Tier 1 airport, and the country’s sixth busiest airport.”
Carter noted that one of the biggest challenges facing the airline industry in 2022 was labour shortages; a factor that continues to be a challenge to this day. The industry saw massive layoffs during the lockdown years of 2020 and 2021. Then came the surge of demand when restrictions were lifted, which required an urgent need again for resources and staff.
Because there continues to be a shortage of both pilots and airplanes, airlines have cut certain routes in Halifax, despite being profitable and popular.
“WestJet is probably the question we get asked the most very much,” said Carter, in response to a question. “WestJet has reduced its services in the East. They definitely had an expansion strategy in place pre-pandemic that saw significant growth in the east, in particular, nonstop services from Halifax into Europe.”
“What is happening with WestJet is not any different than any other carrier in Canada and around the world. Travel has resumed and restarted carriers are having issues with a lack of pilots and a lack of aircraft. And so this is causing them to reconsider.”
Carter is hopeful that the strong business case for such routes will eventually attract carriers back.
“We have an extremely good business case for those services. They’ve flown for a number of years, and they did very well. We support them as a community and they’re very important to our tourism industry.”
Another participant at the AGM noted the challenges in flying regionally. Halifax no longer has routes to nearby airports, including Sydney-the only other airport in Nova Scotia.
“We have no service to Sydney, Nova Scotia today, as an example within our own province. Sydney began service from Halifax in 1972,” noted Carter. “And until the pandemic hit, we had service to Sydney. If you think about 1972, two things will strike you. First of all, you’re able to smoke on an aircraft. And secondly, the other Trudeau was Prime Minister, so it has been a long time. We have no service to PEI, we have no service to New Brunswick.”
“We have two issues regionally; we have the availability of aircraft as well the availability of pilots. So we’re working with the other Atlantic Canadian airports as well with organizations… to see what we can do in Atlantic Canada to try and restore those services.”
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].