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Skyport boosts Aecon results, but lags pre-pandemic levels

Money earner: the airport is bringing in revenue for developer Aecon (File photograph)

Increased air arrivals are helping to boost revenue for the company operating LF Wade International Airport.

But traffic at the airport remains at less than two thirds of the volume of operations before the pandemic, the company said.

Skyport, which has a contract with the Government to operate the airport for the next 25 years, helped to boost earnings for the concessions arm of parent company Aecon to $19 million in the second quarter of this year.

According to Aecon, that is an increase of $2 million on the same period last year.

In February, Skyport raised regulated airport fees by 6.2 per cent. The move was condemned by Lawrence Scott, the Minister of Transport, who said that it placed Bermuda’s passenger fees “among the highest in the world”.

Despite the upturn in profits, the taxpayer is still having to top up Skyport’s earnings under a minimum-revenue guarantee agreement with the Government.

In a statement, Aecon said: “For the three months ended June 30, 2022, revenue in the concessions segment of $19 million was $2 million higher compared to the same period in 2021.

“Higher revenue was primarily due to an increase in commercial flight operations — $3 million — at the Bermuda International Airport.

“Commercial flight operations in Bermuda continue to operate at a reduced volume due to Covid-19 compared to pre-pandemic levels but have partially recovered from the more severe impacts experienced in 2020 and 2021.

“Operating profit in the concessions segment for the three months ended June 30, 2022 increased by $1.7 million compared to the same period in 2021. The higher operating profit occurred primarily as a result of operations at the Bermuda International Airport.”

Discussing the results, Jean-Louis Servranckx, the president and chief executive officer of Aecon, said that he expected profits from the Bermuda operation to strengthen as airlift increases.

Mr Servranckx said: “Obviously Bermuda continues to recover and we do expect results from Bermuda to continue to strengthen as air traffic gets back to normal.

“As I said in Q2, we operate at close to 60 per cent of pre-pandemic levels. So far, through the month of July, we're operating at around 63 per cent, so that the trend continues to move upwards and we expect that trend to continue.”

Aecon earned a total of $1.12 billion in the second quarter of this year — $152 million more than earnings posted for the same period last year.

Although the concession arm of the company recorded a healthy balance sheet, the Canadian construction giant actually made an overall loss of $6.4 million for the three-month period.

The company took over operations at the old airport terminal in 2017 before developing a new facility, which opened at the end of 2020. Under its contract with the Government, Skyport will run the new terminal until 2047.

Under the minimum-revenue guarantee agreement, the taxpayer has had to pay out more than $47 million to the company since it took over operations, including $3.47 million in the second quarter of this year.

Last month Mr Scott said last month that he expected that the subsidies would continue until at least the end of the year.

He said: “Although we are trending in the right direction — each quarterly payment has been lower than the previous year’s quarterly payment — even with the increased air routes and passenger traffic we anticipate that minimum-revenue guarantee payments for the remainder of 2022 and into early 2023 to be approximately $5 million.”

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Published August 08, 2022 at 7:52 am (Updated August 08, 2022 at 7:52 am)

Skyport boosts Aecon results, but lags pre-pandemic levels

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