Airport improvement fee going up next year at Stanfield International
Posted Oct 5, 2020 05:57:45 PM.
The Halifax International Airport Authority (HIAA) will be increasing its Airport Improvement Fees (AIF) early next year.
The current AIF at Halifax Stanfield is $28 for passengers travelling outside of Nova Scotia. That will be going up to $35 as of January 4, 2021. Passengers heading to J.A. Douglas McCurdy airport in Sydney will see an increase from $15 to $22.
HIAA says revenue from the fee is used for necessary capital infrastructure maintenance and improvements, along with debt obligations associated with those long-term investments.
It says the airport essentially operates on a user-pay system, but with a 90 per cent decline in passenger traffic due to the ongoing COVID-19 pandemic, not much revenue is being generated right now.
The airport authority's chief executive officer says that has left them with little choice but to hike the fee.
“We have very few options to deal with a financial crisis of this magnitude – it’s unlike anything we have experienced in 20 years of managing the Halifax airport,” said Joyce Carter in a news release.
“In addition to significant cost-cutting measures we’ve undertaken over the past several months we must generate sufficient revenue to meet our financial obligations for debt and infrastructure management. Our only options to generate more revenue in this environment are through additional borrowing and fee increases, and we can’t continue to borrow our way through this crisis with no end in sight.”
HIAA says it has already consolidated terminal operations and parking lots, powered down equipment and lighting, cut discretionary spending, and reduced its workforce by 25 per cent, but the authority still faces significant deficit and rising debt loads.
Carter expects to see reduced passenger volumes for the foreseeable future.
“Current projections range as low as 1.5 – 2.0 million passengers expected at Halifax Stanfield in 2021 – that’s less than half of what we saw in each of the past three years,” she says.
Chief financial officer Paul Brigley adds capital investments are needed every year to maintain the safety of the airport's facilities and operations.
“Raising fees at a time like this is not something we take lightly,” he says.
“We have substantial fixed costs associated with safely managing our airfield, terminal building and property, no matter if one or 1000 flights land here.”