Rising passenger volumes at Kelowna International Airport (YLW) will allow several infrastructure projects postponed by the pandemic to resume this year.
YLW expects to welcome 1.73 million passengers in 2022, said Phillip Elchitz, senior manager of airport operations. This is 3.6 per cent above the initial estimate of 1.67 million passengers anticipated as part of the preliminary budget forecast for the city, which owns YLW.
"We are starting to see a recovery that is beyond what we originally forecasted earlier in the year," Elchitz said. "That's very encouraging for us. It certainly is a big deal."
While the difference is only 60,000 passengers, Elchitz said it's a big deal because all revenue for capital projects comes from the airport improvement fee (AIF) departing passengers pay.
"Any increase in passengers from the original budgeted amount makes a big difference because that's extra cash flow that allows us to look at how we model our capital projects. That allows us to advance our projects," he said.
The AIF is a $25 fee charged to every departing passenger. An additional 60,000 passengers equates to $1.5 million.
While the steady increase in airport passenger volumes was one of the "good news stories" to come out of the city's 2022 budget, which was finalized April 25, volumes remain well below the more than 2 million passengers who passed through the airport in 2018 and 2019.
This year’s anticipated volume is on par with those seen in 2016. Elchitz expects the airport should get back to pre-COVID numbers by 2023 or 2024, assuming a moderate growth trajectory.
Based on point-of-sale data, Elchitz told Western Investor that passenger growth is balanced between locals and in-bound travellers. However, he expects in-bound leisure travel to outpace local traffic in the months ahead as more people discover what the attractions and amenities the region has to offer.
“The in-bound leisure market had grown significantly prior to the pandemic,” he said. “We expect our recovery to be approximately 85% of pre-COVID numbers by the end of this year.”
While business travel is also increasing, albeit at a slower pace due to the rise in remote work arrangements, consumers want to return to favourite destinations. BC wineries typically receive about a million visitors a year and many of those who come to the Okanagan are planning a return in 2022, according to Quini, a consumer research firm based in Vancouver. Surveying a small sample of Vancouver consumers earlier this year, Quini found that 48% plan to visit the Okanagan in 2022. Of these, 60% will be returning visitors while 24% will be new to the region.
Several projects that were deferred when the airline industry was forced to shut down much of its operations during the pandemic, are now expected to proceed.
Elchitz says four will begin this year, thanks to nearly $20 million in federal relief funding.
These include design work for runway lighting upgrades, construction on a safety area at each end of the runway which has been federally regulated and a biosecurity enhancement project which will allow YLW to handle any future health-related safety issues such as a pandemic.
The infrastructure funding will be used for the construction of YLW's Combined Operations Building ($7.1 million), the Airport Terminal Building roof replacement ($800,000), airport biosecurity infrastructure ($2.7 million), runway end safety area ($4.5 million) and airfield lighting and support infrastructure ($120,000).
