The Empire Club of Canada hosted a virtual panel discussion on Thursday, July 15, on the importance of Billy Bishop Toronto City Airport (aka the Island airport) to Toronto’s post-pandemic economic recovery.
On that question, there was unanimous consent from the panellists: Neil Pakey, CEO of Nieuport Aviation, owner and operator of the passenger terminal at Billy Bishop; John Thomas, CEO of Connect Airlines, a U.S.-based airline that plans to fly out of Billy Bishop starting in November; and Scott Beck, President and CEO of Destination Toronto.
Pakey offered the optimistic view that economic spinoffs generated by the airport could hit $5 billion in just a few short years.
There has been a long-standing debate on just how much of an economic impact the airport has on the Toronto area’s GDP. Depending on your reading of the available data, it’s anywhere from $650 million to $2 billion a year.
The pandemic has all but obliterated the aviation industry. The economic fallout from the suspension of global airline traffic has been “catastrophic,” Pakey acknowledges. But the sky is the limit, as it were, with numbers in the U.S. post-pandemic quickly returning in some markets to pre-pandemic levels, Pakey pointed out.
But an important name to long-time opponents of expansion plans at the airport was missing from the discussion.
Robert Deluce, executive chair of Porter Airlines, the main carrier currently operating out of Billy Bishop, has plans to resume flights on September 8.
The company has also recently announced the purchase of up to 80 new mid-sized jets from a Brazilian manufacturer.
It wasn’t too long ago that Deluce was pushing expansion plans for Billy Bishop that involved extending the runway into Toronto Harbour so that the airport could accommodate jets to add to Porter’s fleet of 30 turboprop Dash 8 planes currently headquartered at Billy Bishop. That plan was spiked amid opposition from waterfront community groups, as well as opposition from Air Canada, which is the other carrier out of Billy Bishop.
But Deluce plans to fly his new jets out of Pearson starting in the second half of 2022. He says that Billy Bishop will continue to be Porter’s base of operations, but for how long is the question.
Before the pandemic grounded flights between the U.S. and Canada, Porter was flying to some two dozen regional destinations in Canada and the United States. But 18 months since Porter’s operations ceased over the pandemic, the future viability of the airport seems more in doubt than ever.
PortsToronto, the federal agency that owns and operates Billy Bishop, issued a Request For Interest (RFI) on March 30, looking for private investors to help keep airport operations afloat. The airport is PortsToronto’s main source of revenue. In 2020, that was down because of the pandemic, with PortsToronto reporting a “significant” $24.4 million drop in revenues and a $12.6 million net loss compared to a $3.5 million gain in 2019.
But it’s also been almost a decade since Porter has been able to turn a profit from its operations out of Billy Bishop. As of last November, Porter owed some $45.3 million in terminal fees to PortsToronto. Porter is asking forgiveness for that amount and suing for a further $21 million for breach of contract in a lawsuit filed last year by Porter against Nieuport. According to court documents, Nieuport continues to charge Porter for using slots at the terminal.
Porter flies to a handful of regional destinations in the U.S. But Thomas, noting that Porter’s operations have been largely Canada-based, told the Empire Club panel that Connect Airlines plans to do something different – bring in travellers from some 30 destinations in the U.S. Thomas says that will be a “game-changer” for the viability of the airport.
The fly in the ointment is that all the slots to fly out of Billy Bishop – some 202 – are currently occupied by Porter and Air Canada. Also, Billy Bishop has no customs facilities, which has restricted the number of U.S. markets Porter can fly to, limiting those to airports with preclearance facilities.
Building preclearance facilities has been a topic of discussion at Billy Bishop since 2016. But the feds seem reluctant to provide the funds needed or the estimated $10 million it will cost to operate the facilities annually.
Most aviation analysts see business travel of the kind Porter specializes in not bouncing back until 2023 or 2024. Others suggest that the lower costs of doing business remotely post-pandemic will mean a fundamental reshaping of the aviation industry. Beck suggested during Thursday’s panel that there’s room to grow back to pre-pandemic levels with some 50 per cent of business travel related to sales.
But for those like CommunityAIR, who have been arguing that the waterfront is the wrong place for an airport, the pandemic has not only raised questions about the future viability of the airport. It has also brought into sharper focus questions about the need to address climate change and the shortage of green space in the downtown core.
Is the 100-plus hectares of real estate currently occupied by Billy Bishop airport the best use for the lands? The opening of the Union Pearson Express has made ease of access afforded by Billy Bishop to the downtown core less of an issue for business travellers.
A number of cities with downtown airports have recently moved to convert their lands for much-needed housing and parks space. The feds have shown daring on the waterfront before, says CommunityAIR’s Brian Iler, with the creation of Harbourfront in the 1970s and more recently Waterfront Toronto.
With PortsToronto’s lease on the airport lands expiring in 2033, Iler suggests that “no one wants to go back to the pre-COVID noise and pollution.”
Three carriers have made a go of it at Billy Bishop. All of them have failed. The recalibration of the aviation industry post-pandemic means Porter and other airlines will have to be subsidized by tax dollars to a greater extent than if all operations were moved to Pearson, argues Iler.
PortsToronto won’t announce the results of its Request for Information until the fall. The economic argument for an airport on the waterfront, meanwhile, seems to be fading into the wild blue yonder.