The Greater Toronto Airports Authority (GTAA) has recently unveiled its financial and operating results for the three- and nine-month periods concluding on Sept. 30, 2023.
The numbers paint a strong picture of resilience and growth in the wake of global travel challenges.
In the third quarter of 2023, passenger activity at Toronto Pearson (YYZ) witnessed a remarkable surge of 11.9%, totaling 12.5 million individuals.
This growth trend persisted throughout the first nine months, reaching an impressive 31.6% increase compared to the same period in 2022, with 33.8 million passengers.
This surge in passenger activity can be attributed to the robust revival in travel demand and the commendable efforts of travel industry partners in overcoming the challenges posed by the pandemic’s aftermath.
Key problems faced were those challenges universally reported throughout the industry; namely labor issues and supply chain disruptions.
Recovery on the Horizon
During the third quarter and first nine months of 2023, passenger activity rebounded to 88% and 87.6%, respectively, in comparison to the pre-pandemic levels of 2019.
Particularly noteworthy is the recovery in September 2023, where passenger activity reached an impressive 91.4% of the levels observed in September 2019.
Deborah Flint, the President and CEO of GTAA, expressed her satisfaction, stating, “Toronto Pearson’s passenger growth in the third quarter of 2023 was a robust 11.9%.”
“There remains a strong demand for air travel, and the airport is meeting that demand with consistent and enhanced service levels across the ecosystem.”
Flint emphasized the airport’s focus on improving the passenger experience, citing the success of summer operations marked by predictability, reliability, and efficiency.
Factors contributing to this success include the introduction of the Pearson Standard, enhancing compliance with service standards, and leveraging real-time data to boost departure on-time performance by over 15 percentage points compared to the previous summer.
“This strong service performance sets the stage for an anticipated robust holiday and winter travel season,” added Flint.
The financial results echo the success in operational metrics. Revenues during the three- and nine-months ended Sept. 30, 2023, witnessed substantial growth, reaching $504.5 million and $1.4 billion, respectively.
This surge is attributed to the substantial increase in passenger and flight activity through Toronto Pearson, coupled with rate and fee increases implemented on Jan. 1, 2023.
EBITDA, a key financial indicator, showed a significant increase during the same periods, reflecting the boost in revenues associated with higher operating activity. This uptrend, however, was partially offset by increased operating costs.
Net income also experienced a notable uptick during the three- and nine-months ended Sept. 30, 2023, rising to $99.7 million and $229.7 million, respectively.
This increase is attributed to higher revenues linked with increased operating activity, a decrease in interest expenses, albeit offset by a notable rise in operating costs.
Strengthening Financial Foundations
Free cash flow, a pivotal metric reflecting financial health, increased by $30.1 million to $207.5 million and $188.4 million to $476.4 million during the three- and nine-months ended Sept. 30, 2023, respectively.
This was primarily driven by augmented cash flows from operations and increased interest income.
Noteworthy to mention is the increase in free cash flow during the first nine months of 2023, propelled by funds received under ACIP and partially offset by the rise in capital expenditures.
The GTAA’s strategic capital investments yielded positive results during the three- and nine-months ended Sept. 30, 2023.
Key achievements include the development of approximately 310,000 square meters of airside surfaces, encompassing taxiways, apron slabs, and service roads.
Furthermore, gate resiliency was enhanced by installing four new passenger boarding bridges at the Infield Concourse, bringing the total available bridges to ten at that facility.
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