Air Canada reveals impact of Covid-19 in Q1 results
05 / 05 / 2020
In its first quarter results, Air Canada has reported a slide in revenues and earnings, predominantly due to the impact of the coronavirus.
The carrier noted a 15% year-on-year decrease in revenues, from C$4.4bn in the first quarter of 2019 compared with C$3.7bn in the same period of this year.
Ebit for the first quarter decreased by 81% year on year, from C$583m in 2019 to C$71m in 2020.
The carrier said that its results “reflect the severity and abruptness of the impact that the Covid-19 pandemic has had” on airlines.
Calin Rovinescu, president and chief executive of Air Canada, said: “The impact was exacerbated during the month of March with mandated social distancing, unprecedented government-imposed travel restrictions in Canada and around the world and the shutting down of economies.”
However, he pointed out: “The past quarter was the first in 27 consecutive quarters that we did not report year-over-year operating revenue growth. Our solid January and February results gave us every encouragement that this performance would continue until the sudden and catastrophic impact of Covid-19’s onset in Europe and North America in early March.
“We are now living through the darkest period ever in the history of commercial aviation.
“Be assured that we are resolutely committed to bringing our airline successfully through this crisis.”
From March 22, Air Canada operated more than 500 cargo-only flights utilising passenger aircraft, to ensure that supply chains continued moving and essential cargo such as personal protective equipment was transported to areas dealing with the virus outbreak.
The carrier has also planned to operate up to 150 cargo-only flights per week in the second quarter of this year, utilising its Boeing 787 and 777 aircraft, as well as its four newly-converted Boeing 777 and four converted Airbus 330 aircraft in which cargo capacity has been doubled with the removal of the passenger seats.
Looking forward, in light of the Covid-19 pandemic and uncertainty around passenger air travel, Air Canada has withdrawn its full-year 2020 and 2021 guidance.
In response to the outbreak, Air Canada is adjusting capacity and taking other required measures to account for health warnings, travel restrictions, border closures and passenger demand.
Rovinescu concluded: “We expect that both the overall industry and our airline will be considerably smaller for some time, which will unfortunately result in significant reductions in both fleet and employee levels.
“While it is not possible to predict the course of the pandemic globally or indeed the changes that will be required of the airline industry, our determination is to ensure that our company is positioned to emerge in the post Covid-19 world as strong as possible and capitalize on the opportunities that will inevitably arise.”