REGINA — Those involved with Regina International Airport are upbeat about the future despite some major headwinds coming their way.
Skyrocketing oil and jet fuel shortages have wreaked havoc on airline travel around the world. While the YQR airport has not been immune to those concerns, CEO James Bogusz said the impact on his airport has been minimal to this point.
“We haven't seen any what I would call immediate impacts other than I've noticed as a customer, ticket prices — especially for tickets bought kind of three, four months out — appear to be higher than usual by, well, depends on the route,” said Bogusz.
He said they have also seen “slight adjustments to some of the policies that WestJet and Air Canada had for future-outlook tickets to help combat those fuel prices.”
“What I'm more worried about when it comes to fuel is just ensuring that if the prices go up, sometimes that can impact demand. And what I want to make sure is that the airlines continue to offer tickets at all value bands. We talked about Ultra Basic earlier. We talk about various Flex fares. Just want to make sure they continue to offer those products to keep that demand coming, even with these fuel prices going up.”
One impact of fuel shortages has been route cancellations seen by airlines at other major airports. Bogusz does expect the major airlines will tweak their routes to take that into account.
He said to “expect Calgary, Vancouver, Toronto to see little schedule adjustments in the coming months if these headwinds continue the way they are. I have no doubt the airlines will tweak and adjust to improve profitability.”
But Bogusz does not expect a return to the type of chaos seen during the COVID era.
“We had no flights in May of 2020 for 10 days of a 30-day month. It was unbelievable. Do I believe we're going to see that because of fuel prices? Absolutely not. But will airlines look for opportunities to build their balance sheet to ensure profitability? Absolutely.”
As for efforts to attract more routes to the Regina airport, those efforts still go on. One focus continues to be to try and restore a direct service to Ottawa, but it hasn't happened yet.
“We'd love to see Ottawa back,” Bogusz said. “We'd love to see Ottawa operated ideally by Porter or Air Canada. Both are great partners. I mean, Porter has a big base they're building out of Ottawa. Air Canada's got a very established footprint in Ottawa. We think both of those would make great airlines.”
Bogusz has made no secret of the fact that Regina has been pitching Porter on an Ottawa route, but he said there have been headwinds for that airline in Saskatoon.
“They actually stopped operating in Saskatoon this year for a few months. They completely pulled out of the market,” said Bogusz.
He said if an airline like Porter is “having trouble being year round there, it makes it more difficult when you're the smaller city with less passengers to attract them here.”
Bogusz reiterated his belief that they think “Ottawa is the play for Porter,” and have offered them a “very aggressive incentive package, which includes marketing and awareness.” But he said it is “not a revenue guarantee. And we're not planning on incenting beyond where we're at.”
Bogusz said they also continue to market to U.S. carriers like United Airlines for additional service to the U.S., such as restoring the direct route to Chicago, but said the “headwinds for the U.S. make it a challenge to look at growth and expansion compared to a year ago” when they started United’s direct flights to Denver.
Revenue guarantees seen as vital for U.S. routes
One issue is what is going to happen with the revenue guarantee for WestJet’s direct route to Minneapolis-St. Paul. Word came this week that the provincial government would renew its revenue guarantee for the direct route from Saskatoon to Minneapolis-St. Paul.
Bogusz said Regina airport currently has two minimum revenue guarantees currently in place — one for the Minneapolis service with WestJet and the other for Denver service with United. He said WestJet's agreement will come up in about a year from now, while the United agreement just started May of 2025.
Bogusz said that in “terms of value for the province and value for the community, it would be our strong encouragement to the provincial government to consider continuing on with providing a minimum revenue guarantee on these flights.”
As for how those routes are doing, Bogusz is saying that Denver is meeting expectations, but Minneapolis in recent months has been “a little more struggling.”
He pointed to a variety of factors for why that is. He said Denver is popular in part because of its scale as the sixth busiest in the world.
“The connectivity through a mega hub like Denver is just beyond exceptional,” he said.
But he noted Minneapolis also faces competition from other airports like Calgary or Toronto for connectivity. Also, another factor Bogusz pointed to is that there are Canadians who are saying “I'm not going to go to the U.S. right now."
“So having any reduction to demand when you have newly introduced U.S. flights is never a good thing. But it really shows the power of a mega hub like Denver continuing to do well.”
