Montreal's airport needs cash when travel returns or 'the structure will crack,' says manager
The corporation responsible for Montreal's airport - Aéroports de Montréal (ADM) - will need an injection of capital when air traffic returns to normal, or the "structure will break down," warned president and CEO Philippe Rainville in a speech to the Canadian Club of Montreal on Monday.
"ADM's infrastructure was already inadequate to meet demand before the pandemic," said Rainville.
Some work was done during COVID-19, but not enough to set it up for the future, he said.
"The not-for-profit organization was forced to put all projects to add capacity on hold for financial reasons," he said.
"Our teams took advantage of the lull to upgrade. Unfortunately, our coffers were dry and we were limited to maintenance programs."
If the resumption of air traffic happens "too fast" at Montreal-Trudeau International Airport, the current infrastructure will not be able to meet the demand, Rainville said at a news briefing on the sidelines of the conference.
He gave, as an example of projects that need funding, the landing project where traffic was backing up onto the highway due to a lack of capacity in 2019.
He said people will continue to complain if the ADM does not get the funding to fix the problem.
Rainville estimates that it will take "a few billion" to fund the projects.
"I don't want to go crying about getting the money in the public square," he said.
"We got the money for REM. We're taking a break, but it's certain that, in a few years, we'll have to sit down to find a financing solution."
Rainville mentioned the possibility of obtaining capital from private investors to finance the various infrastructure projects in his portfolio.
By judiciously selecting patient capital from an institutional investor such as a pension plan, ADM could raise private capital without having to put financial pressure on travellers or carriers for a return, he believes.
REM A 'FINANCIAL DISASTER'
Rainville also called the proposed Réseau express métropolitain (REM) station at Montreal's Trudeau airport a "financial disaster."
The non-profit organization secured $100 million in funding for the $600 million project. The remaining $500 million will be funded by ADM.
"People think we're doing REM to make money," he said. "We are not doing REM to make money. As soon as REM arrives, we lose parking revenues."
ADM estimates that it will lose between $5 million and $10 million in parking revenue after REM comes into operation.
"We don't get any revenue through a station," Rainville said.
"We do it for the passengers. We do it to reduce the carbon footprint. We assume that passengers think like we do, that bringing the REM to the airport is the right thing to do."
This report by The Canadian Press was first published in French on Nov. 29, 2021.