YVR sees dip in revenue, travellers amid COVID-19 fears

RICHMOND (NEWS 1130) – As the spread of COVID-19 shows no signs of slowing down and in turn slowing down travel, Vancouver International Airport (YVR) admits it’s struggling to deal with the outbreak.

The airport authority is guessing it will see anywhere between 800,000 to 1.3 million fewer passengers walk through the doors of its Richmond-based terminal.

.@yvrairport is seeing a dip in revenue and travellers amid the growing spread of COVID-19. The airport authority says it has scaled back spending for minor upgrades/projects and remains optimistic it will bounce back once the virus is under control. Details on @NEWS1130.

— Sonia Aslam (@SoniaSAslam) March 4, 2020

“In February and March, looks like we’re going to lose about 50 per cent of our traffic to China and that’s about five per cent of our traffic. A lot of people think it’s more than that, so we’re definitely seeing a drop in passengers and therefore revenue,” explains YVR President and CEO Craig Richmond.

A drop because passengers and their friends and family park, buy food and drink, shop the Duty Free at the airport or go to the nearby outlet mall — all of which makes up a portion of YVR’s bottom line.

“We look at what’s happening every day and we’ve been adjusting our budgets accordingly. At this point, that is a pure forecast and educated guess because no one really knows how long this goes or if any other countries might be severely affected.”

As a result of the impact, YVR has scaled back some of its spendings but is moving forward with its bigger upgrades.

“We plan long-term and there really is no point in stopping building now. We’re halfway through some of these big projects. We’re opening up a new expansion in the terminal in June and that will continue to happen. We are slowing down some of our smaller projects where it might have been purely replacing something that is working fine, we’ll just wait and see [and in] June make a decision whether we continue with those projects. ”

The virus is just the latest concern to compound what’s been a rough several months for the airport and is the last in a string of things that have seemingly gone wrong. It started with icy relations between Canada and China following the arrest of Huawei executive Meng Wanzhou, riots in Hong Kong and the grounding of Boeing 787 aircraft.

“We’re definitely concerned but it’s nothing we haven’t seen before. We’ve been through downturns before and I have to remind some of the newer people this is why we build very incrementally and not in huge terminal expansions but relatively small ones because we don’t know exactly what’s coming but we know something bad will come every once and a while.”

Despite this, Richmond remains optimistic YVR will be able to bounce back once the virus begins to clear. “It’s been a good run. We’ve grown by 60 per cent over 10 years and now it’s going to be not a great year but we’re not going anywhere and within a year we’ll be back on our growth trajectory. I’m sure of it.”

He explains in an effort to recover down the road, they’re working closely with the marketing teams of airlines to make travelling enticing again when this is over. “We’re being conservative but I do think there will be a lot of pent up demand for travel once the virus is gone or there’s a vaccine. I think we will come back pretty rapidly but I think we’ll see a lot more growth next year than this year.”

Last year, YVR saw 26.4 million passengers and this year Richmond thinks it will have 25 million people travel through the airport.

“There’s no doubt that at 25 million passengers, that’s a pretty healthy growth rate. When I got here in 2013 as CEO, we were at about 17.5 million [travellers], so it doesn’t very much of a growth rate, say five per cent, and you’re over 1 million passengers a year. I really think we’re poised to once again capture that growth and yes, it’s been a really amazing 10 years of growth but nothing grows perfectly straight forever. We expect something to happen and we’re ready to take advantage of any opportunities that come our way after this virus is gone. We just know how to ride these out.”

There are more than two dozen cases in Canada.

The World Health Organization says so far it appears the virus does not transmit as efficiently as the regular flu and people with influenza who aren’t yet sick are the main drivers of transmission of the infection. The WHO adds those without symptoms of COVID-19 don’t seem to be infectious.

More than 90,000 people worldwide have been diagnosed with the disease and on a global scale, outbreaks in South Korea, Italy Iran, and Japan continue to be the fastest growing when it comes to the number of cases.