Edmonton International Airport seeking urgent $15-million fund from surrounding municipalities to attract direct flights

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The Edmonton International Airport (EIA) is calling on surrounding municipalities to urgently establish a $15-million fund to help the struggling airport take off following the COVID-19 pandemic.

EIA has suffered significantly during the pandemic as a result of lost international flights because Edmonton wasn’t selected by the federal government as one of the four ports of entry into Canada. The airport made $128 million less in revenues in 2020 compared to 2019 and lost 39 direct flights, now only offering 13 compared to 52 before the pandemic.

Partnering with investment attraction company Edmonton Global, the airport is asking for the creation of an “Air Services Opportunities Fund” in order to attract airlines to bring planes back to the Edmonton sky.

In a statement to Postmedia Saturday afternoon, Edmonton Global CEO Malcolm Bruce said the $15-million investment would be used to promote the airport and work to increase the number of direct international passenger and cargo flights, which in turn would help drive regional economic growth.

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“This fund is to attract strategically important airline routes to our region and is driven by business needs. Examples include supporting low-cost carrier routes, key U.S. business routes including those supporting inbound tourism, as well as priority international routes in Europe,” Bruce said in the statement. “It’s not just about passengers, though. About half of the belly of a plane is dedicated to cargo and we are also working on expanding our cargo services between Canada and Asia through our region.”

The Edmonton International Airport.
The Edmonton International Airport in Edmonton, April 25, 2020. Photo by Ed Kaiser /Postmedia

All 15 member municipalities of Edmonton Global are being asked to chip into the three-year initiative, with the City of Edmonton expected to shoulder the majority of the cost at $9.88 million. In a report being presented to council Monday, city staff said the funding would be broken out over a period of three years and could be funded without impacting the tax levy.

If council chooses to go ahead with the request, the city recommends that the last $2.62 million from the COVID-19 reserve be used for a portion of the cost. An additional $3.74 million would come from the financial strategies and $3.52 million from the city’s capital reserve.

Although the use of the remaining COVID-19 funds could limit the city’s ability to respond to future budget challenges, Coun. Michael Walters said economic recovery is a key priority and that can’t happen without a strong airport.

“The airport’s a critical driver to our economy, there’s no two ways about it, and something we have to strongly consider contributing to,” Walters said in an interview with Postmedia. “At this point, economic recovery really is the name of the game. That’s going to benefit everybody in terms of job creation. A strong economy is one of the major poverty-fighting tools that we have in our city. It’s very important that we make these kinds of investments. I see EIA as a very important contributor to our economic recovery, so whatever we can do that’s going to help, we should do.”

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The air service incentive fund would be used solely for the purpose of maintaining existing direct flights and attracting new flights, not to attract retail or commercial or industrial investment to the airport lands. The city said the funds would only be used once an airline has committed to restoring or developing a new flight in Edmonton.

Edmonton Global is currently working on determining metrics and goals to measure the success of the program and what improvements it brings to EIA. The airport recorded a net loss of $89.3 million in 2020 and passenger demand fell by 68 per cent compared to the year prior. In some months, demand fell by 95 per cent. Due to the reduced revenues, operations budgets were cut by $50 million and the workforce was reduced by 30 per cent.

Council will discuss the funding request Monday.

duscook@postmedia.com

twitter.com/dustin_cook3 

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