The Canadian government’s proposal to privatize its four largest airports could transform the sector, but balancing public interests and investor returns would be a key challenge, says Fitch Ratings.

Toronto Pearson International, Vancouver International, Montreal Pierre Elliott Trudeau, and Calgary International together account for approximately 70% of Canada's nearly 160 million total annual passenger volumes. The airports currently operate under long-term leases that extend beyond 2070. Locally controlled nonprofit corporations manage the airports on federally owned land. This model has been fiscally stable and self-sufficient for decades. Canadian airports collectively remit approximately CAD525 million in annual ground rents to the federal government. The four largest airports contributed over 80% of that amount in 2025.

The four airports carry approximately CAD8 billion in combined long-term debt, with further borrowing expected to fund ongoing capital infrastructure needs. A transition to a concession model can bring new benefits such as upfront and ongoing capital infusion through a competitive bidding process and a more diversified income base. The process could require the existing obligations be refinanced and replaced with a new class of debt structured around private sector requirements, adding transaction complexity and cost.

The scale of the airport’s passenger activity and overall operating revenue generation are likely to attract strong interest from leading international airport operators. Balancing public interests and prospective investor concerns will be key. Details of Canada’s private sector investment plans remain limited. Upfront asset monetization proceeds are often consumed in the short term, while transferred rights, responsibilities and costs extend far longer. Such mismatches have historically led to public opposition and policy reversals, both with direct financial costs for the government and private investors. The government is also likely to seek mandatory capital spending commitments from any new operator, further compressing returns.

Canadian airports have fully recovered from pandemic-era volume declines heading into 2026, with healthy traffic growth anticipated going forward across the four airports. Solid passenger volumes support revenue growth and operating cash flow generation, strengthening the appeal of these assets for private investors and potentially supporting competitive valuations in any bidding process. However, robust traffic performance also raises the question of whether privatization is necessary for a group of stabilized, performing assets.

Private sector participation could bring global operational expertise, improved efficiency and broader funding sources. However, public opposition presents a meaningful risk. Canadians are familiar with the 407 ETR highway privatization, which generated sustained political friction. Concerns that airfares or airport fees could rise following a change in control may intensify resistance and raise the likelihood of future policy intervention, a risk with direct credit implications for any long-term concession structure.

Airport privatization trends vary across the world. In EMEA, major privatized or partly privatized airports, including Heathrow, Aeroports de Paris, Aena, and Manchester Airport Group, are rated investment grade and show resilient financial performance, supported by established regulatory frameworks and diversified non-aeronautical revenue. In Latin America, Fitch rates multiple airport concessions in Brazil, Mexico, Colombia and Uruguay, where long-term private operation has delivered infrastructure growth and stable credit profiles. In APAC, the model and performance vary across jurisdictions, and Fitch publicly rates several Indian airports.

In North America, private participation has generally been confined to individual terminal redevelopments rather than full airport concessions. Canada's four target airports are well-managed whole-of-airport assets rather than single terminals, representing a fundamentally different and more complex privatization starting point.