Canadian Aviation Recovery Insights
On January 12, 2022, InterVISTAS organized a briefing session (videos below) with a group of Canadian airports on the topic of aviation recovery. We focused on what has changed since our last update of October 28, 2021, and provided specific recommendations to tackle the challenges ahead in light of the recent Omicron variant, the federal government’s zero- risk approach to pandemic management, and the evolving Canadian airline industry landscape.
As it was the case in 2021, government announcements on border health requirements, vaccine recognition, and travel advisories will continue to impact passenger demand and actual bookings in a significant way. The prospect of new travel restrictions and/or the emergence of new COVID-19 variants will likely slow the recovery of international air services to/from Canada. Labour availability across the industry also becomes a notable constraint to seat capacity in the short term, potentially hindering recovery of demand in some markets. At the same time, we continue to see new city pairs being added by ULCCs and regional airlines, and the reorganization of existing networks with smaller fleets by so- called legacy carriers Air Canada and WestJet.
Another trend discussed during the session is the continued progress achieved in terms of vaccination rates, yet the small effect that higher rates have had on the relaxation of border restrictions and other health requirements, let alone on the prospects for coordination between governments and long-time trade partners such as Canada and the U.S. The current zero-risk approach to pandemic management adopted in most major aviation markets and the general willingness displayed by governments to control the number of cases whenever a new variant erupts are likely to determine the future of the industry and prospects for recovery in 2022.
Our recommendations for Canadian airports:
- With a changing Canadian airline landscape, large, medium, and small-size airports can benefit from reviewing their recovery strategy and business development plans to consider engaging proactively with new entrants offering unique and/or high-demand city pairs across Canada and North America.
- Main hub Canadian airports can benefit from strengthening relations with established carriers and/or long-time customers, including supporting the success of their new fleet plans and network expansions, as well as investing resources to improve the overall airport experience for arriving and connecting passengers.
- As the federal government is likely to continue applying a zero-risk approach to pandemic management in 2022, airports can benefit greatly from focusing on operational and regulatory flexibility to maximize their prospects for recovery and strengthen their own resiliency. Bringing an end to regulatory anomalies such as the international airport status approach or leveraging on operational provisions in bilateral air service agreements can be considered.
- Re energizing advocacy and commercial partnerships beyond aviation stakeholders, including collaborating on multi-agency regional strategic plans to support recovery are key to Canadian airports’ long-term resiliency and commercial re-positioning in post- pandemic times.