Toronto retailers hit by Canada 3000 bankruptcy

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Retailers at terminal three at Toronto Pearson International airport are feeling the effects of carrier Canada 3000's bankruptcy two weeks ago, yet the airport authority has said its long-term growth projections, and expansion projects, still have a solid basis. The country's second-largest airline, Canada 3000 stopped flying on November 9.

At Toronto, the loss of Canada 3000 compounds an already difficult climate arising from September 11, said HDS Retail North America chief executive officer Scott McMaster.

"Sales at HDS' stores in terminal three have dropped by 20% since the collapse of Canada 3000, he said. "There's been an immediate effect." At its Relay and Great Canadian News airport stores, sales are down by nearly 50% since September 11, said McMaster. "It will be hard to avoid layoffs if the gap is not filled. Terminal 3 is a pretty bleak place to do business right now."

Smaller Canadian carriers such as WestJet Airlines may eventually expand to fill the gap, but the immediate future is very uncertain. A spokesman for the Greater Toronto Airports Authority Peter Gregg said there are no immediate plans for Canada 3000's space. He played down the effects, saying November is historically a slow month, and this year the effect is exacerbated by the economic downturn coupled with the effects of September 11. Meanwhile  the airport authority said it is sticking to its $4.4bn 10-year redevelopment plan. This includes the demolition of the existing terminals 1 and 2, which will be replaced by a new central terminal, to which terminal 3 will be connected.