The Air Canada check in area remains deserted at the Ottawa International Airport in the midst of the COVID-19 pandemic on Saturday, May 16, 2020.Justin Tang/The Canadian Press
Calin Rovinescu, Air Canada’s chief executive officer, tried to assure shareholders he is taking the right steps to ensure Canada’s largest airline thrives when the COVID-19 pandemic eases, even as he railed against travel restrictions he says stand in the way of an economic recovery.
In the Montreal-based airline’s annual meeting on Thursday – webcast due to the pandemic – Mr. Rovinescu said the deadly virus and public-health measures enacted to limit its spread have demolished 10 years of growth at Canada’s largest airline, and said it is time to lift some travel bans and quarantine orders, following the lead of European countries.
“Canada imposed amongst the most stringent restrictions,” Mr. Rovinescu said, adding, “these constraints, while needed in March, still remain in place and their effect has been to devastate the airline business.”
Air Canada in 2019 posted revenue of $19-billion and a profit of $1.4-billion. In the first three months of 2020, which included the first weeks of the pandemic, Air Canada posted a loss of $1-billion as most markets closed to travel. The airline has issued 20,000 layoff notices – more than half its work force – and parked or gotten rid of more than 200 planes as it cut capacity by 90 per cent.
Air Canada chairman Vagn Sorensen said the full impact of the “unprecedented” crisis cannot be predicted but the company is well prepared, having quickly reduced costs and raised cash through debt and equity offerings.
As much of its operations sit idle and cash burn hovers around $22-million a day, the carrier has been bolstering its bank balance. Air Canada said this week it raised $1.2-billion in two financings, bringing its total cash raised since the beginning of the pandemic to $5.5-billion, and will have $9-billion in cash by the end of the second quarter.
“We are doing everything in our power to ensure that your airline that we have built with hard work, energy and dedication over the past decade into one of the world leaders will continue to not only survive but thrive,” Mr Rovinescu said.
It will take three years for passenger volumes to return to 2019 levels, Air Canada has said.
“COVID-19 has upended everything,” Mr. Rovinescu told shareholders, who have seen their holdings plunge in value by more than 65 per cent this year.
Mr. Rovinescu has been a vocal critic of Canada’s clampdown on travel recently, joining other domestic travel and hospitality companies in their lobbying efforts to ease the restrictions as the summer tourism season begins.
The Canadian and U.S. governments recently agreed to extend the ban on non-essential cross-border travel until July 21, and any person returning to Canada or travelling to some provinces must self-isolate for two weeks, a rule most European countries have in place. Newfoundland and Labrador, PEI, New Brunswick and Nova Scotia will permit travel among the provinces from July 3 but retain restrictions on visitors from other provinces, similar to several other provinces, territories and regions.
The Pubic Health Agency of Canada declined to respond to the travel industry’s lobbying efforts, pointing to Prime Minister Justin Trudeau’s comments on June 22.
In his daily press conference, Mr. Trudeau dismissed industry calls to loosen travel restrictions, saying Canada is being “very, very careful about when and how we start reopening international borders.”
“I understand that there are many tourism operators and airlines that would like us to be able to bring in tourists and allow people to come to Canada,” Mr. Trudeau said, “but they must understand that if we move forward too quickly, and if we’re not absolutely certain of what we’re doing at every step, we run the risk of getting into a second wave of infection as we’re seeing in certain places around the world and having to reclose both our economy and put everyone back into lockdown. We’re going to move forward very gradually.”
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