Air Canada Quarterly Revenues Down 80% From 2020, Says Govt. Needs a Travel Recovery Plan

Air Canada Quarterly Revenues Down 80% From 2020, Says Govt. Needs a Travel Recovery Plan

May 7, 2021 Jim Byers

Air Canada’s first quarter operating revenues were down 80% from last year’s figures.

Canada’s largest airline released its Q1 earnings report today, and, as expected, the pandemic continues to weigh heavily on its financial status. Operating revenues for the first quarter of 2021 were $729 million, a decline of $2.993 billion from last year.

Air Canada also reported a net cash burn of $1.274 billion, or approximately $14 million per day, on average.

“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,” said Michael Rousseau, President and Chief Executive Officer of Air Canada. “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,”

“During the quarter, Air Canada’s cash burn rate progressively improved, albeit moderately given the ongoing impact of the pandemic on advance ticket sales. Air Canada had almost $6.6 billion in liquidity at the quarter’s end and we subsequently finalized a financial package with the Government of Canada (primarily comprised of repayable loans) to provide access of up to $5.9 billion more in liquidity. Beyond serving as a layer of insurance, this makes available, if required, the resources necessary to rebuild and compete in the post-pandemic world.

Rosseau said the airline continues to pursue other revenue opportunities and said 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. 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,” Rosseau said.

“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.”