MIAMI – In the wake of results posted for Q1 2021, Air Canada (AC) is asking the government to ease the ongoing travel restrictions and re-open travel in and out of Canada.
To back its request, AC takes advantage of the results for Q1 which show heavy losses in operating revenues, registering a drop to US$602m (CA$729m), a minus US$2.47bn (CA$2.993bn) or -80% over Q1 in 2020. Earnings Before Interest Tax Amortization and Depreciation (EBITDA), special items excluded, stands at minus US$631m (CA$763m) compared to a positive EBITDA of US$58m (CA$71m) posted in Q1 2020.
AC operating loss for the period being reported stands at US$868m (CA$1.049bn) compared to a loss of US358m (CA$433m) posted at Q1 last year. The airline burned cash at a rate of US$11.5m (CA$14m) per day for a total amount of US$1.05bn (CA$1.27bn). Unrestricted liquidity at the end of Q1 2021 stood at US$5.44bn (CA$6.58bn)."With these and other measures, Air Canada is poised to emerge strongly from the pandemic. It is now essential that governments communicate and implement a reopening plan for our country, recognizing that a healthy aviation sector is vital… Click To Tweet
Michael Rousseau, the AC CEO, commented on the results by stating “The persistence of COVID-19 and its resurgence in Canada are weighing heavily on the Canadian airline industry, as reflected in Air Canada’s first-quarter results.
He added, “Still, through the hard work and dedication of our employees, we are operating a limited schedule for necessary travel and to ship essential cargo. I thank our employees for their professionalism and assure them, as well as our investors and all stakeholders, that better times lie ahead for our airline,”
On the Necessity to Re-open the Country to Travel
On the necessity to re-open the country to travel, the AC CEO stated: “With these and other measures, Air Canada is poised to emerge strongly from the pandemic. It is now essential that governments communicate and implement a reopening plan for our country, recognizing that a healthy aviation sector is vital to Canada’s economic recovery.”
He continued with strong words on actions to be taken by adding “Starting with replacing blanket restrictions with science-based testing and limited quarantine measures where appropriate, Canada can reopen and safely ease travel restrictions as vaccination programs roll out. We have seen elsewhere, notably, in the U.S., that travel rebounds sharply as COVID-19 recedes and restrictions are lifted, and we fully expect this can be replicated in Canada.”
Activity Severely Reduced
Air Canada has reduced its ASM (Available Seats Mile) by 82% year-over-year and stands at -84% when compared to the same period off 2019. The airline is planning to approximately double its ASM in the course of Q2; however, when compared to 2019, the ASM is expected tto shown a -84%n downturn.
On March 31, AC consolidated its regional operations by transferring its Embraer E175 fleet to Jazz Aviation and entered a revised CPA (Capacity Purchase Agreement) with retroactive effect from January 1. The airline expects from this new set up a cost reduction of US$331m (CA$400m) over the 15 years span of the CPA.
Since the onset of the pandemic, AC has operated over 7,500 all-cargo flights using its wide-body aircraft and temporarily modified Boeing 777 and Airbus A330, using passengers’ cabins to carry cargo. During Q1 AC has operated a total of 2,362 cargo flights.
Featured image: Air Canada Airbus A330-300 C-GEFA. Photo : Daniel Gorun/Airways