YVR Airport offering payment deferral for over 250 businesses on Sea Island
Vancouver International Airport (YVR) says it is doing its best to support struggling businesses on Sea Island, while also ensuring it can continue essential airport operations.
In an open letter last week to businesses on Sea Island, where YVR is located, Vancouver Airport Authority president and CEO Craig Richmond said the airport has introduced a payment deferral program to provide immediate support for its business partners on the island.
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This deferment is available to all 250 businesses on the island, including commercial operators, airlines, ground transportation operators, and property lease holders.
It is a significant move for YVR and the local economy, as these businesses at the airport account for about 26,000 jobs in the region — equivalent to the entire workforce that can be found in a small city’s economy.
But due to the nosedive in commercial air traffic and passenger volumes, these businesses that support airport operations have laid off about 13,000 staff.
“We know that your success is our success and we must all be well-positioned for eventual recovery,” reads his letter. Under federal regulations, the Vancouver Airport Authority operates as a not-for-profit entity.
“We recognize this is an evolving situation and no one knows just how long the COVID-19 pandemic will last—whether it’s weeks, months or years. However, rest assured we will do everything we can to face this unprecedented challenge. We will continue to evaluate the longevity and ongoing impacts of the pandemic on our financial position and whether we have the capability to support further relief efforts for our partners in the longer-term.”
YVR’s 2020 ground lease payment to the federal government, which owns Sea Island, will be waived, but the savings will be relatively minimal given that the annual rent is calculated as a percentage of revenue.
According to the latest financial statements, the airport’s total revenues for 2018 reached $565.1 million, with $48.1 million from airline landing fees, $95.1 million from airline terminal fees, $143.5 million from concessions, $172.1 million from airport improvement fees, $37.9 million from car parking, and $38.7 million from rentals.
It had expenditures totalling $378 million, but not including $59.5 million for the federal ground lease. Prior to the pandemic, the annual ground lease was expected to grow to $61.9 million in 2019, $65.1 million in 2020, $79.4 million in 2021, $83.7 million in 2022, and $85.9 million in 2023.
But as of earlier this month, YVR was seeing just 3,000 passengers per day — only 4% of its usual passenger traffic volumes of 78,000 per day.
It is one of four airports in Canada that can accept international flights, but these volumes are expected to drop to near zero over the coming weeks. Domestic passenger traffic is expected to fall to just 30% of normal levels.
Three weeks ago, Richmond stated YVR was expecting to see a 40% to 50% year-over-year decline in passengers this year, which would bring passenger numbers from the record of 26.4 million in 2019 to as low as approximately 13 million this year — returning the airport to its 1995 volumes, before the construction of the modern international terminal building. But given the continued airline capacity cuts, this figure may now be conservative.
Sections of the large terminal building have been shut down and operations have been consolidated to a smaller footprint to help reduce costs and the drain on cash reserves.
“I want to thank you for your support and reassure you that we are in this together. While we don’t know when our industry will come back, we do know that eventually it will,” he added.
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