- Joe Breitfeller
Air Canada Announces the Discontinuation of 30 Domestic Regional Routes, Closing of Eight Stations
Air Canada announced on Tuesday that they will discontinue 30 domestic regional routes and close eight stations in Canada. The structural changes will be made as a result of weak business and leisure travel demand as well as travel restrictions and border closures.
On Tuesday (June 20, 2020), Air Canada announced the discontinuation of 30 domestic regional routes as well as the closing of eight stations in Canada. The company is making these structural changes in the face of weak business and leisure travel demand as well as provincial and federal government travel restrictions and border closures. Air Canada believes that recovery to pre-pandemic levels will take at least three years, so they are making changes to their network and schedule as they continue to optimize operations to reduce cost structure and cash burn rates. During the first quarter, Air Canada reported a net loss of $1.05 billion, which included a March 2020 net cash burn of $688 million.
From the onset of the global COVID-19 pandemic, Air Canada has implemented numerous cost savings and liquidity preservation measures including a 50 percent workforce reduction (approximately 20,000 employees) through layoffs, severances, early retirements and special leaves. The company has also reduced or deferred CAPEX by around $1.1 billion, reduced capacity by 85 percent in the second quarter and expects a third quarter year-over-year capacity reduction of around 75 percent. Additionally, the carrier permanently removed 79 aircraft from their mainline and Rough fleets and has raised around $5.5 billion in liquidity since March 13, 2020 through debt and equity financing.
Air Canada is Canada’s largest domestic and international airline, serving over 51 million guests in 2019. The Canadian flag carrier is a founding member of the Star Alliance and the only international network carrier in North America to receive a Four-Star ranking from Skytrax, who also named the carrier ‘2019 Best Airline in North America.’
Source: Air Canada