PRESIDENT'S MESSAGE

Since January, the Ottawa Airport Authority has been collaborating with the public health authorities from all three levels of government as the threat of the Novel Coronavirus reached North America. Through February and into March, we enhanced all cleaning and sanitizing protocols throughout the terminal, and worked to amplify key messages aimed at preventing the virus from reaching our airport and community. As the situation escalated in early March, the Authority began to examine its information technology systems and assets in its plan to have our staff working from home, where possible, to encourage social distancing and reduce the potential impact of the virus on employees and passengers. When the WHO declared the pandemic on March 11th, we put our plan into motion.

The Government of Canada's travel restrictions and recommendations took their toll on our operation very quickly. Early days saw a flurry of repatriation flights for our March Break passengers; however, as they wound down, we saw a devastating decline in aircraft movements to approximately 5 to 10% of what they were at this time last year. Air Canada and WestJet have cut 85 to 95% of their flights, and Porter has suspended all service until June 1st. American carriers have suspended service with few exceptions. Lufthansa will not operate YOW-Frankfurt service as planned. Some flights remain on the schedule and either fly virtually empty or are simply cancelled. As an example, on March 31st, we had 13 departures with approximately 430 passengers registered - some of whom may not have actually travelled. This number is in contrast to a typical 7,000 departing passengers per day volume.

Our concession partners have responded to the shrinking passenger volumes as well. A walk through the terminal at 6 a.m. would reveal closed restaurants, food outlets, storefronts, and few passengers or staff present at a time when we would typically see thousands of people moving about. We anticipate further closures as the pandemic continues. Major airport hotels have consolidated operations, and other campus partners that support our operation have been impacted. While it is difficult to quantify the impact in numbers that change daily, cuts to employment across the campus, and the transportation supply change are significant.

The airport is considered critical infrastructure, which requires it to remain open and operational in support of commercial aircraft movements (passengers and cargo), repatriation activities, the Department of National Defence, federal government operations, the Canada Reception Centre, Orange air ambulance service, etc.

So, what has the Airport Authority done to respond to the plummeting business? We continued to prioritize cleaning and disinfecting of all high touch surfaces, kiosks, and restrooms. We have worked closely with the health authorities to amplify their social media messages, in-terminal signage, and to heed their social distancing imperatives. We also completed an in-depth review of our expenses and our capital construction program. The completed review resulted in several outcomes.

First, we halted spending on capital programs. Some critical projects may move ahead very slowly, but for the most part, they have completely stopped. This action has reduced capital spending by at least $35 million. This has a significant impact on the economic activity in the National Capital Region with significant impact on employment.

Programs such as our terminal concession rollout, which was scheduled over two-plus years will now take significantly longer, and may look different from the program we presented in 2019. Many of the brands that were included in the program are impacted by the pandemic as well. Construction of the Alt Hotel Ottawa Airport will be delayed, although I understand that our partners at Germain Hotels are committed to moving forward eventually. These are just two of the more visible projects that we had underway. Countless others will not go ahead in the near term or, in some cases, at all.

Second, we have cut spending on items that are not aligned with regulatory requirements, or safety and security needs.

Third, we enacted a workforce cost and time adjustment program across the organization in the interest of avoiding layoffs. We will continue to do the required adjustments but I can assure that we will not compromise on safety and security for our team and for passengers.

All of the measures I have identified and more are dependent on the duration of the crisis. However, as we all know, each day brings more indicators that this will be a prolonged event.

What does the future look like for our airport YOW? It is hard to say with any precision. I can say with certainty, though, that it will not be business as usual for some time. I believe it will take years to build our passenger numbers back to 2019 levels. I cannot realistically promise that all 45 destinations served by YOW before the pandemic will return quickly, including our European air service. I can guarantee, however, that we will continue to work closely with each airline to rebuild our service as quickly as economically viable for our airlines.

I can also assure you that we will continue to work with partners in the government to ensure that we can take advantage of any programs or subsidies available to airports. On that point, it is essential to clarify that the rent relief announced by the federal government earlier this week is a positive gesture. It bears explaining, however, that airport rent is calculated as a percentage of gross revenue therefore our rent payment for March, April and May would have been almost nil and would be significantly reduced for the remainder of the year. As already mentioned, our revenues have all but disappeared, meaning that our rent obligation for 2020 would have been minimal. There is a lot more work to do if our airport is to return to its role as significant economic generators in the National Capital Region. We need our government partners to support airports through this crisis and to work with us to ensure an effective recovery for the benefit of our local communities and the country. We also need them to support our partners in tourism who have suffered a profound loss, and who will be critical to our recovery.

To the front-line workers, both at the airport and in the community, we say thank you. Our medical workers, police, paramedic, and fire partners, along with every essential service provider, have earned our unending respect and gratitude. To all employees who are working from home and practicing social distancing - know that your efforts are helping to stop the spread of the virus. Finally, our thoughts are with all those who are ill or have a loved one who is sick as a result of COVID-19.

Thank you to all who are following every recommendation from our public health officials to the letter. It is the only way we can get through it as quickly as possible.