WAA changing Airport Improvement Fee to sustain shortfall caused by COVID-19
June 3, 2020
As the front door to our community, Winnipeg Airports Authority prides itself on providing world-class facilities and excellent customer experiences at Winnipeg Richardson International Airport.
To help sustain this level of service as the air travel industry weathers the effects of the COVID-19 pandemic, WAA is changing its Airport Improvement Fee (AIF) to $38 on September 1.
Even with the adjustment, Winnipeg Richardson International Airport is forecasting a $29.9 million shortfall this year in funds raised through the AIF. The majority of YWG’s revenue is tied to passenger traffic which has dropped 90 per cent due to COVID-19. Roughly 12,500 people per day used to travel through the airport – a number that now reaches a few hundred on a good day.
Introduced in 1993, the AIF is collected by nearly all major airports in Canada. It’s included on departing flights, along with other fees and taxes, when a ticket is purchased. Airlines then forward the funds to the airport, less a six per cent handling fee. Passengers connecting through YWG do not have to pay the AIF as long as they continue on their journey within four hours of arriving.
The AIF is used to build, improve or maintain airport infrastructure and doesn’t pay for costs associated with running YWG. Projects funded by the fee include the new terminal as well as last year’s extensive runway renewal. Since taking over the airport in 1997, WAA has transformed the airport campus into a major transportation centre while remaining fiscally prudent. Decisions regarding the development of YWG have been made with respect to our growing community, the region’s demand for travel and evolving industry standards. The organization revisits the AIF on an annual basis.
For years, the AIF charged by YWG has been one of the lowest among major Canadian airports. This commitment to value coupled with a series of record-breaking years in passenger traffic allowed WAA to keep the AIF low. However, ensuring the same amount of revenue over the coming years will be difficult.
The fee change is part of a multi-layered, comprehensive approach to mitigate the financial impact of the pandemic. Over the last few months, WAA has proactively closed off low-use areas of the terminal, slashed capital budgets and halted development plans. These steps will not only help offset expected shortfalls but position the airport to contribute to the community’s economic recovery and meet its needs for years to come.