OTTAWA — Ottawa is offering $80 million in short-term help for the struggling air industry by giving the country's largest airports a break on their rent payments.

The proposals got a mixed review Wednesday from officials with some of the country's biggest airports. They said their bigger need is rent relief, not the deferral of at least 10 per cent of rents for a two-year period backdated to July 1 under the plan announced by Transport Minister David Collenette.

Larger deferrals may be granted depending on the reduction in passenger levels at individual airports between April 2002 and April 2003.

However, the money will have to be repaid to Ottawa over 10 years, beginning Jan.1, 2006. No interest charges will be assessed.

"It doesn't deal with the underlying issue, which is rent, which is exceedingly high,'' said Krista Kealey, spokeswoman for the Ottawa International Airport Authority, adding that airports are still "hoping'' such relief which eventually come about.

Airline industry analyst Rick Erickson called Collenette's move an "absolutely pitiful'' one that simply means the industry will face a "significant crisis'' once deferred rents have to start being repaid in 2006.

"Nothing is said about the killer year _ 2006,'' Erickson said from Calgary. "We're going to be in absolute crisis when all the airport rents double.''

Canadian airport officials have been waiting at least two years for a separate long-term rent policy review being conducted by the federal government. That review is "ongoing'' and expected to be released soon, said the transport department.

Until then, however, deferring rent instead of eliminating some of it is "a band-aid that doesn't quite cover the wound,'' Kealey said.

Collenette said in a statement that under the short-term rent deferral plan, airports are expected to pass their cost savings on to both air carriers and passengers, "to promote the health of the air sector,'' Collenette said in a statement.

The rent relief should give air carriers and airports a bit of help "as they deal with current, short-term challenges in the industry,'' Collenette added. However, airports are not obliged to pass on any savings from the rent deferral under the proposal.

Toronto's Pearson Airport, by far the country's largest, looks likely to save the most under the program, with an estimated $49.3 million in rent deferrals, according to government documents.

Vancouver will save about $15.3 million, followed by Calgary at almost $5 million, Ottawa at about $2.3 million and Montreal at $2.2 million.

However, airport authorities were pessimistic such savings would be passed on, particularly with the country's dominant airline _ Air Canada _ still restructuring under bankruptcy protection from creditors.

"Are you going to turn around and give money to an organization that's in bankruptcy protection? Is that realistic? Not sure,'' Kealey said, noting that the Ottawa airport authority paid $37 million in rent to the federal government from 1997 to 2002 _ barely less than half of the $75-million net book value of the Ottawa airport in 1997.

In fiscal 2001-2002, nine airport authorities in Canada paid rent totalling about $250.6 million, with most paid by Toronto, Vancouver, Calgary and Montreal.

Tony Gugliotta, chief financial officer for the Vancouver International Airport Authority, said the short-term rent deferrals are "probably better than nothing.''

"But is it significant and is it going to have a huge impact in the short term? Probably not compared to what the long-term relief of what the airports are looking for,'' he said.

Gugliotta also doubted that the airports would be able to offer any new savings to the airlines or passengers.

The Air Transport Association of Canada, which represents the country's air carriers, said airlines understand the "very serious cash crunch'' airports are facing. But Warren Everson, the association's vice-president of policy and strategic planning, said the group doesn't anticipate airports passing major savings along to airlines "unless they're obliged to.''

Everson called Collenette's latest proposal "a public relations gesture as opposed to a serious effort to benefit travellers or stimulate demand.''

However, he said one positive note was that the proposal showed the federal government "is conceding that its rent formula is not practical and can't continue.''

Peter Gregg, spokesman for the Greater Toronto Airports Authority, called the rent deferral plan "a recognition of the difficulties that we have experienced in recent months and years -- since Sept. 11 but also more recently the SARS effect.

"Also, the commitment to finalizing the rent review process -- the longer term part of this -- we're happy to see comment on that and we're looking forward to seeing what the final report from the government is,'' Gregg said.

The Commons all-party transport committee recently called on the federal government to offer deep rent reductions for airports, with the savings passed on to airlines, as well as breaks on other fees such as fuel taxes and security charges.