'Devastating' Air Canada flight cuts the latest blow to N.L. tourism industry

After a year of staycationinganda ban on travellers from outside Atlantic Canada, the Newfoundland and Labrador tourism industry is still struggling to find its footing as COVID-19 rages around the world.

The latest route cuts by Air Canada, which is dropping its remaining flights in and out of Happy Valley-Goose Bay and Gander and suspending its Toronto-to-St. John's route as of Jan. 23, are going to make recovery that much harder, says the chair of HospitalityNewfoundland and Labrador.

"It's devastating," said Brenda O'Reilly on Wednesday.

"The tourism industry in Newfoundland and Labrador, and around the world, certainly, has been hit so dramatically. We're first hit, hardest hit and this certainly doesn't help."

O'Reilly said tourism business owners appreciate people in the province who took their holidays at home during the summer, butthat revenue was half of what would have been brought in by other Canadiantravellers, and a third of what international travellers bring in.

Ultimately it may mean higher ticket prices and less choice.I guess that's the bottom line.- Peter Avery

And while the province's borders remainclosed to non-residents, O'Reilly said losing the flights is an obstacle on the road back to economic recovery.

"This is so devastating for the Big Land Labrador having no access with Air Canada is dramatic. Losing another flight out of St. John's and Gander is dramatic. So it's not looking great," she said.

"Our province looks like we're closed right now, and of course we are because of the pandemic, but we just hope that these flight [cuts] are short term and not long term."

Health Minister John Haggie has said despite ongoing vaccinations,health restrictions will remain in effect for a while yet likely through to 2022.

It's a difficult pill to swallow for tourism operators who know that staycations are "just not gonna be enough" for all of them to survive past this year, O'Reilly said.

She added thatshe knows the airline industry is also having a difficult time, and hopes there will be some sort of assistance from the federal government, but it's a cyclical problem and tourism in Newfoundland and Labrador can't recover without flights.

Airlines have long been saying they cannot maintain operations without financial assistance from Ottawa.

"Access is absolutely the most important, most polarizing, issue right now, so to hear Air Canada cancelling flightsit's just very sad," she said.

"Tourism around the world, and particularly for us, it will revive the airlines. ..we do need more flights, not less flights."

'It's terrible'

Peter Avery, CEO of the St. John's International Airport Authority, said the organization is in "one of its darkest moments right now."

While the announcement from Air Canada makes sense amid dwindling passenger numbers, it was"still a shock," he said.

WATCH | Heather Gillis reports on how hospitality operators are reacting to the latest tough news from Air Canada:

Tourism industry braces for impact of Air Canada flight suspensions

4 years ago

Duration 2:11

Hospitality industry leaders are worried about the long-term impacts of Air Canada's decision to suspend flights in N.L., reports Heather Gillis

"It's something that we thought we'd never see. It's almost like an institution, the direct flight to Toronto. It's been around for decades and we've never been without that flight," Avery said.

In 2019, 1.45 million passengers travelled through the St. John's airport, Avery said. In 2020, that number was just over 350,000. Avery saidalmost half of all passenger volume comes from the direct Toronto route a "huge" portion for the airport authority, which is in dire financial straits.

"It's terrible. Our revenues were down 60 per cent in 2020 and in 2021 we actually predict it's going to be worse," he said.

"We predict we'll be down 63 per cent and our traffic will actually be down 80 per cent, so even worse than last year with the full effect of the pandemic."

The future of the airline industry remains foggy, Avery said, adding that a lot hinges on the rollout of vaccines. But he suspects airlines will be smaller, and more airport will be competing for fewer flights, as economies recover over the next number of years.

"Ultimately it may mean higher ticket prices and less choice.I guess that's the bottom line."

Air travel options shrinking

Late last year, Air Canada cut routes in and out of Deer Lake. In the fall, WestJet also cut its routes in Atlantic Canada by 80 per cent. Earlier, in July, Air Canadaslashed seven routes across Newfoundland and Labrador.

"Between the tourism industry, the rotational workers, the outfitters, medicaltransportation, startup and existing businesses,this is going to hurt across the province, and it's going to be hard to come back from," said Grand Falls-Windsor-Buchans MHA Chris Tibbs, the PC Party's tourism critic.

Premier Andrew Fureytold reporters Wednesday that he'd spoken with federal ministers, including Transport Minister Omar Alghabra.

"They are seized with the issue," Furey said.

When asked whether the province would consider bailing out Air Canada, contributing funding as it has with the oil and gas sector, Fureyrelayed responsibility to Ottawa.

"This is a federal file on the minister of transportation's desk.It's not just N.L.;there are different regions in the country that have been impacted," he said.

"I'mconfident that they will continue to work with the industry, and Air Canada in particular, to find a resolution, to protect those routes as we emerge from the pandemic."

Tibbs called Furey's response "lip service," arguing that air travel to Newfoundland and Labrador is an essential service.

"There should have been conversations long before these things happened," he said.

St. John's hit hard

In a year that started with Snowmageddon, followed by the pandemic, the airline cuts are just the latest in a series of blows for St. John's, says Mayor Danny Breen.

"It's disappointing to see, but it's certainly understandable, I think, given the situation that we're in," Breen said.

"The direct connection from St. John's to Toronto is important for tourism when it comes back, and conventions and business, as well as the ability of people to travel leisurely from the province."

Breen saidthe city contacted with Air Canada this morning to talk about the cancellations and ensure it is, in fact, a temporary suspension that will return eventually.

In the meantime, Breen said, the city will have to make the best of a tough situation until the province, and the rest of Canada, is on sure footing again.

"We're gonna have to get through this and we're gonna have to make it work. We're resilient here, we can manage," he said.

"The impact on the economy, the hard part is the uncertainty around it and the not knowing, and it's issues like this that are certainly a major concern and we want to make sure that we're dealing with these issues and ensuring that we can continue the resumption of the economy as soon as possible."

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