Ask TPR Vol. 9 Ensuring Airport Viability
May 30, 2019
Are there plans to close the Peace River Regional Airport (PRRA)?
No, we are working to ensure the airport is financially viable, so it will stay open. This work dates back a number of years.
How have you been trying to ensure airport viability?
The signing of a funding agreement with Northern Sunrise County, County of Northern Lights, MD of Peace No. 135, and the Town of Grimshaw in 2016 was a significant step on the road towards viability. The municipalities still spend about $820,000 a year, 41 percent of which comes from Peace River’s taxpayers, to fund airport operation. We are focused on continuing to try to bring that number down to lessen the burden on regional taxpayers.
In 2017 we initiated a review of the lease structure we have with leases at the airport. Many of the leases were found to be out of date, undervalued, and with varied terms from one lease to the next. We began to work with our tenants to find a solution that would be fair, equitable, and lead to greater viability in the long run.
One of the challenges we had to contend with was a general slow down in the resource economy around Peace River. This economy had contributed greatly to the airport’s success over the previous years. Beginning in 2015 there was a significant loss in revenue due to the economic slowdown; as a result, the lease review became a necessity.
In 2018 we began moving forward with new leases and have successfully negotiated leases with 77 percent of our airside tenants. To date, there are only three airside lots under negotiation.
Can you speak to the specifics of those negotiations?
Unfortunately, we are unable to speak to the specifics of individual negotiation regarding leases.
We can say that the PRRA is striving to have standard leases at the airport with rates that are consistent and equal in all material respects regardless of the client. That means all clients will pay comparable lease rates per square foot. The PRRA has a duty to protect the interests of the taxpayers that support the airport and the continued survival of the facility and these lease rates help achieve that by providing clarity and safeguards.
One of the changes is to lease rates; previous rates charged tenants $348 per month on a 30,000 square foot lot. The PRRA is now charging rates that are reflective of market-value for these valuable lots, which works towards reducing the subsidy taxpayers are paying for at the airport.
This new rate brings us in-line with other airports that have similar regulatory requirements and available services.
Will this review impact Air Ambulance Service?
No, the new lease structure will not impact air ambulance service at all. We understand this is a vital service for residents across the region, ensuring the airport is financially viable is the best way we can support this critical health service.
What is happening regarding fuel access at the airport?
We are preparing to issue a Request for Proposal (RFP) for a singular fuel provider at the Peace River Regional Airport. The contract will include all required environmental and regulatory protections. One of the criteria of the RFP will include pricing details and any RFP evaluation will focus on establishing and maintaining competitive pricing.
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