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Canadian Government Waives Airport Ground Lease Payments

Posted: Mon Mar 30, 2020 11:50 pm
by C172YT
To support the 21 Airport Authorities in Canada (and PortsToronto, operator of Toronto Billy Bishop), the federal government is temporarily waiving ground lease payments from March until December, 2020. Release
Hopefully this will have a positive impact as these facilities navigate significant declines in revenues.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 2:23 am
by enilria
C172YT wrote:
To support the 21 Airport Authorities in Canada (and PortsToronto, operator of Toronto Billy Bishop), the federal government is temporarily waiving ground lease payments from March until December, 2020. Release
Hopefully this will have a positive impact as these facilities navigate significant declines in revenues.

My understanding is that YYZ pays more in ground lease than all the other airports combined. I saw that in a presentation a few years ago. I assume it it still true. If so this is basically a bailout of YYZ.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 3:25 am
by Dominion301
enilria wrote:
C172YT wrote:
To support the 21 Airport Authorities in Canada (and PortsToronto, operator of Toronto Billy Bishop), the federal government is temporarily waiving ground lease payments from March until December, 2020. Release
Hopefully this will have a positive impact as these facilities navigate significant declines in revenues.

My understanding is that YYZ pays more in ground lease than all the other airports combined. I saw that in a presentation a few years ago. I assume it it still true. If so this is basically a bailout of YYZ.


They do definitely pay the most, but it proportionately impacts all airports on the list.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 3:14 pm
by enilria
Dominion301 wrote:
enilria wrote:
C172YT wrote:
To support the 21 Airport Authorities in Canada (and PortsToronto, operator of Toronto Billy Bishop), the federal government is temporarily waiving ground lease payments from March until December, 2020. Release
Hopefully this will have a positive impact as these facilities navigate significant declines in revenues.

My understanding is that YYZ pays more in ground lease than all the other airports combined. I saw that in a presentation a few years ago. I assume it it still true. If so this is basically a bailout of YYZ.


They do definitely pay the most, but it proportionately impacts all airports on the list.

As I understand it, it is definitely not proportionate. if YYZ still pays more than half for the whole country that is not relative to passenger traffic.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 3:14 pm
by enilria
Dominion301 wrote:
enilria wrote:
C172YT wrote:
To support the 21 Airport Authorities in Canada (and PortsToronto, operator of Toronto Billy Bishop), the federal government is temporarily waiving ground lease payments from March until December, 2020. Release
Hopefully this will have a positive impact as these facilities navigate significant declines in revenues.

My understanding is that YYZ pays more in ground lease than all the other airports combined. I saw that in a presentation a few years ago. I assume it it still true. If so this is basically a bailout of YYZ.


They do definitely pay the most, but it proportionately impacts all airports on the list.

As I understand it, it is definitely not proportionate. if YYZ still pays more than half for the whole country that is not relative to passenger traffic.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 3:52 pm
by Thenoflyzone
enilria wrote:
Dominion301 wrote:
enilria wrote:
My understanding is that YYZ pays more in ground lease than all the other airports combined. I saw that in a presentation a few years ago. I assume it it still true. If so this is basically a bailout of YYZ.


They do definitely pay the most, but it proportionately impacts all airports on the list.

As I understand it, it is definitely not proportionate. if YYZ still pays more than half for the whole country that is not relative to passenger traffic.


No. From what I understand, rent is based on airport revenues. The more you make, the more you pay. So it should be proportionate.

Specifically for YYZ, rent is 12% of airport revenues in excess of $250 million. YYZ payed $170.8 million in ground rent to Transport Canada last year. That's $14.2 million a month, roughly.
YUL pays about $6.5 million a month. (in the case of YUL, I arrived at that figure based on Q3 results from last year, as they haven't released full year results yet. So the value I arrived at might not be as accurate. See sources below)

The Government press release mentions a savings of up to $331.4 million for the airports during the 10 months in question (March-December). So YUL would be saving about $65 million from this move. YYZ would get to save about $142 million.

Overall, seems proportionate to me. Now of course, this all assumes airport revenues will be the same as last year, which we all know wont be the case. So even without this measure, the rent airports would have payed to Transport Canada would have only been a fraction of last years' rent.

Sources:

https://tpprodcdnep.azureedge.net/-/med ... EDFBD43E3E

https://www.admtl.com/sites/default/fil ... se_ENG.pdf

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 6:08 pm
by Dominion301
Thenoflyzone wrote:
enilria wrote:
Dominion301 wrote:

They do definitely pay the most, but it proportionately impacts all airports on the list.

As I understand it, it is definitely not proportionate. if YYZ still pays more than half for the whole country that is not relative to passenger traffic.


No. From what I understand, rent is based on airport revenues. The more you make, the more you pay. So it should be proportionate.

Specifically for YYZ, rent is 12% of airport revenues in excess of $250 million. YYZ payed $170.8 million in ground rent to Transport Canada last year. That's $14.2 million a month, roughly.
YUL pays about $6.5 million a month. (in the case of YUL, I arrived at that figure based on Q3 results from last year, as they haven't released full year results yet. So the value I arrived at might not be as accurate. See sources below)

The Government press release mentions a savings of up to $331.4 million for the airports during the 10 months in question (March-December). So YUL would be saving about $65 million from this move. YYZ would get to save about $142 million.

Overall, seems proportionate to me. Now of course, this all assumes airport revenues will be the same as last year, which we all know wont be the case. So even without this measure, the rent airports would have payed to Transport Canada would have only been a fraction of last years' rent.

Sources:

https://tpprodcdnep.azureedge.net/-/med ... EDFBD43E3E

https://www.admtl.com/sites/default/fil ... se_ENG.pdf


That's correct as far as the formula goes.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 6:47 pm
by Skywatcher
Hopefully the onerous rent scheme will not be re-instituted when this all blows over.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 6:54 pm
by santi319
Perhaps the US should do the same?

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 7:21 pm
by yowza
Skywatcher wrote:
Hopefully the onerous rent scheme will not be re-instituted when this all blows over.

One can hope but given home much revenue this generates and how it insulates AC and WS (which in normal times keeps many people gainfully employed) I don't see this going anywhere.

YOWza

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 9:10 pm
by Skywatcher
yowza wrote:
Skywatcher wrote:
Hopefully the onerous rent scheme will not be re-instituted when this all blows over.

One can hope but given home much revenue this generates and how it insulates AC and WS (which in normal times keeps many people gainfully employed) I don't see this going anywhere.

YOWza


It's a hidden tax that most people don't even realize they're paying. The knock off repercussion is that it forces AIP (airport improvement fees) to be charged and landing fees to be higher than they should be. I don't see how this benefits AC and WS. I only see how it benefits the bloated Federal civil service.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 9:21 pm
by YYZLGA
I don't see how it benefits AC and WS either. It hits every airline flying in Canada, and airlines that hub in Canada will be more affected than ones that hub elsewhere. On the other hand, these airports use thousands of acres of extremely valuable land--look how much Bombardier just got for the much smaller Downsview side, despite considerable planning constraints--and it would certainly be an indirect subsidy to the airline industry to not charge them for using it.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Tue Mar 31, 2020 9:35 pm
by usxguy
with MASSIVE AIF (PFC) fees, the airports in Canada shouldn't be charging the airlines a damn thing!

An airline that flies to YVR pays almost the same rent (counter, office, ramp, gate rents) as they do in Seattle. yet passenger fees: YVR AIF = $25 SEA PFC = $4.50

Let THAT sink in.... someone is getting RICH in Canada.

Re: Canadian Government Waives Airport Ground Lease Payments

Posted: Wed Apr 01, 2020 12:09 am
by Skywatcher
YYZLGA wrote:
I don't see how it benefits AC and WS either. It hits every airline flying in Canada, and airlines that hub in Canada will be more affected than ones that hub elsewhere. On the other hand, these airports use thousands of acres of extremely valuable land--look how much Bombardier just got for the much smaller Downsview side, despite considerable planning constraints--and it would certainly be an indirect subsidy to the airline industry to not charge them for using it.


They are charged by governments of all levels for using the land in the form of municipal taxes, HST (federal/provincial), PST (provincial) and so on. The "rent" is simply double dipping. Not only that but even if the airport authorities purchased the land back in the nineties it surely would have been paid off by now.