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Halifax airport requests relief from creditors amid low travel demand
December 14, 2020 By Jon Victor, The Canadian Press
In the latest sign of financial trouble facing the airline industry, Halifax’s airport operator has asked its creditors for leniency in meeting its debt obligations.
The Halifax International Airport Authority said it is making the request out of an abundance of caution, to reduce the chance of default in case its revenues are lower than anticipated this year and in subsequent years.
The decline in air travel during the COVID-19 pandemic has hit Canada’s airports hard, forcing them to lay off staff and drastically reduce other costs.
The airport’s announcement on Friday comes three days after Air Canada said it would cancel or temporarily suspend several routes in Atlantic Canada, citing a challenging business environment.
The federal government has announced some support measures for airports, including rent relief and funding for capital investments, but airlines are still waiting for a targeted aid package from Ottawa.
The Canadian Airports Council, an industry group, had previously called for urgent aid from the government to help struggling airports.
The organization said last week that the aid, announced in the federal government’s Fall Economic Statement, was a good first step, but it has continued to call for a COVID-19 testing program at airports to replace the mandatory two-week quarantine period for international travellers.
Derrick Stanford, president of the Atlantic Canada Airports Association, said in response to Air Canada’s latest route cuts that the industry is now seeing a “worst-case scenario” play out in the region.
The Halifax airport’s request to its creditors includes relief from obligations to sell or lease any of its assets in order to meet certain conditions of their agreement.
The airport is asking creditors to approve the request before the end of the year.
