Jazz Aviation recognized as one of Canada’s Best Diversity Employers for the tenth year

HALIFAX, NS, March 2, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Jazz Aviation LP (‘Jazz’), has been named one of Canada’s Best Diversity Employers for the tenth consecutive year in an annual national employer survey by Mediacorp Canada Inc.

“We are honoured to have been recognized as one of Canada’s Best Diversity Employers each year for the past decade. Diversity is core to the culture all Jazz employees are proud of – one that values individual uniqueness and fosters safe spaces that empower employees to be their authentic selves,” said Randolph deGooyer, President, Jazz. “By encouraging inclusive work environments that build on the diverse perspectives, experiences, and abilities of employees, we are fostering innovation and positive change.”

Canada’s Best Diversity Employers recognizes the nation’s top employers who have exceptional workplace diversity and inclusiveness programs. The competition recognizes successful diversity initiatives in a variety of areas, including programs for employees from five groups: women; members of visible minorities; persons with disabilities; Indigenous peoples; and lesbian, gay, bisexual and transgendered/transsexual (LGBT) people.

Mediacorp Canada Inc. recognized Jazz for the many initiatives the airline has developed and supported, including working with a number of community partners to reach out to Aboriginal candidates and mentoring students from First Nations Technical Institute. Jazz encourages young women to consider careers in aviation by participating in annual events such as Girls Take Flight. Also, Jazz embeds diversity and inclusion into its supplier policy.

About Chorus

Chorus is a global provider of integrated regional aviation solutions. Chorus’ vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital – a leading, global lessor of regional aircraft, and Jazz Aviation and Voyageur Aviation – companies that have long histories of safe operations with excellent customer service. Chorus provides a full suite of regional aviation support services that encompassesevery stage of an aircraft’s lifecycle, including aircraft acquisitions and leasing; aircraft refurbishment, engineering, modification, repurposing, and preparation; contract flying; and aircraft and component maintenance, disassembly, and parts provisioning. Chorus Class A Variable Voting Shares and Class B Voting Shares trade on the Toronto Stock Exchange under the trading symbol ‘CHR’. www.chorusaviation.com

About Jazz

Jazz Aviation LP has a strong history in Canadian aviation with its roots going back to the 1930s. As the largest regional carrier in Canada, Jazz has a proven track record of industry leadership and exceptional customer service and has leveraged that strength to deliver value to all its stakeholders. www.flyjazz.ca

Chorus Aviation Announces Revisions to the Capacity Purchase Agreement with Air Canada

Enhancing Jazz’s position within Air Canada’s network

  • 25 Embraer 175 aircraft to be added to the Covered Aircraft fleet, increasing the fixed fee margin.
  • Jazz to provide 100% of Air Canada Express 70+ seat regional capacity until 2025.
  • Dash 8-300 aircraft to exit the Covered Aircraft fleet.
  • Controllable cost guardrail receivable to be capped at $20 million per year, improving working capital.
  • All other material components of the CPA are unchanged.

HALIFAX, NS, March 1, 2021 /CNW/ – Chorus Aviation Inc. (‘TSX: CHR) (‘Chorus’), parent company of Jazz Aviation LP (‘Jazz’), today announced an agreement to revise the capacity purchase agreement (‘CPA’) between Jazz and Air Canada. The agreement addresses the dramatic and sustained reduction in air travel demand caused by the COVID-19 pandemic by optimizing the Jazz fleet. The revisions to the CPA are conditional on Jazz reaching an agreement with the Air Line Pilots Association, International which represents Jazz pilots. If this condition is satisfied, the CPA will be amended on a retroactive basis to January 1, 2021.

Chorus and Air Canada have a successful history of working together to adjust the terms of the CPA for mutual benefit. These proposed changes relate primarily to the Covered Aircraft, enhancing Jazz’s position in Air Canada’s network as the sole regional partner for 70+ seat regional aircraft until 2025 while providing Air Canada with greater cost efficiency and flexibility.

“The COVID-19 pandemic continues to challenge the aviation industry. With the Jazz fleet operating at a fraction of the capacity it flew a year ago, now is the time to update the CPA to help preserve regional flying and Jazz’s place within it,” commented Joe Randell, President and Chief Executive Officer, Chorus.

“The Jazz fleet is up-gauging to larger regional jet aircraft and replacing smaller turboprop fleet sooner than contemplated in the previous fleet plan. Bringing the Embraer 175 aircraft into the Jazz Covered Aircraft fleet makes Jazz the exclusive Air Canada Express operator of 70+ seat aircraft until 2025 and is a demonstration of our cost competitiveness and strong relationship with Air Canada. Further, quarterly reconciliation of the controllable cost guardrail receivable provides greater certainty in the timing of cash flows and improves our liquidity by eliminating potentially significant draws on working capital,” concluded Mr. Randell.

Revisions to the CPA include the following:

Consolidation of 25 Embraer 175s into Jazz’s Covered Aircraft fleet

  • Jazz will operate the 25 E175s under the CPA.
  • Jazz will become the exclusive Air Canada Express operator of 70+ seat aircraft until the end of 2025.
  • Fixed fees will increase by $46.0 million over the term of the CPA with annual minimum fixed fees increasing by $1.2 million per year from 2021 to 2025, and by approximately $4.0 million per year from 2026 to 2035.

Removal of 19 Dash 8-300s from Jazz’s Covered Aircraft fleet

  • 19 Dash 8-300s will be removed from the fleet in 2021. Removal of the Dash 8- 300s will reduce future aircraft leasing revenue under the CPA by approximately $56.0 million over the remaining term of the contract.
  • Chorus owns these Dash 8-300s, 15 of which have undergone the Extended Service Program (‘ESP’) which prolongs their useful life by approximately 15 years. Chorus has the ability to sell or lease these aircraft or convert them for cargo operations.

Controllable Cost Guardrail Receivable

  • Uncertainty in the flying schedule caused by the pandemic resulted in the accumulation of a $44.2 million controllable cost guardrail receivable from Air Canada at December 31, 2020.
  • The revisions to the CPA will cap the controllable cost guardrail receivable to a maximum of $20.0 million annually and provide for quarterly reconciliations to avoid the accumulation of a receivable in excess of the agreed maximum.
  • The 2020 guardrail receivable has been paid; however, without the proposed changes to the guardrail, the 2021 CPA guardrail receivable could be as high as $45 million.
  • Quarterly reconciliations against the new guardrail receivable cap will reduce Chorus’ financial exposure by capping the guardrail receivable and minimize draws on Chorus’ available working capital.

As a result of these revisions to the CPA, Chorus anticipates one-time costs, charges, and other fees to range between $90.0 million and $110.0 million, with approximately half of this range being non-cash in nature, and the cash portion paid over several years.

All other material components of the CPA are unchanged, including:

  • Contract expiring on December 31, 2035.
  • Minimum fleet guarantee of 105 aircraft until 2025, and 80 aircraft from 2026 and beyond.
  • Performance incentive compensation.
  • Pilot mobility program.

Upon becoming effective, these revisions to the CPA optimizes the Jazz fleet for Air Canada and makes it the exclusive provider 70+ seat regional capacity in the Air Canada Express network until 2025, while providing significant cost savings and network planning flexibility for Air Canada.

About Chorus Aviation Inc.

Chorus is a global provider of integrated regional aviation solutions. Chorus’ vision is to deliver regional aviation to the world. Headquartered in Halifax, Nova Scotia, Chorus is comprised of Chorus Aviation Capital a leading, global lessor of regional aircraft, and Jazz and Voyageur Aviation – companies that have long histories of safe operations with excellent customer service. Chorus provides a full suite of regional aviation support services that encompasses every stage of an aircraft’s lifecycle, including aircraft acquisitions and leasing; aircraft refurbishment, engineering, modification, repurposing and preparation; contract flying; aircraft and component maintenance, disassembly, and parts provisioning.

Air Canada Revises the Terms of its Capacity Purchase Agreement with Chorus Aviation for Regional Flying

Jazz Aviation to become sole operator of Air Canada Express Flights

MONTREAL, March 1, 2021 /CNW Telbec/ – Air Canada today announced an agreement to amend the Capacity Purchase Agreement (CPA) with Jazz Aviation LP, a wholly-owned subsidiary of Chorus Aviation Inc., under which Jazz currently operates certain regional Air Canada Express flights.

Through the revised agreement, Air Canada will transfer operation of its Embraer E175 fleet to Jazz from Sky Regional and Jazz will become the sole operator of Air Canada Express services. The revisions to the CPA are subject to Jazz reaching an agreement with the Air Line Pilots Association, International. If this condition is satisfied, the CPA will be amended on a retroactive basis to January 1, 2021.

“Air Canada is consolidating its regional flying with Jazz in response to the ongoing devastating impact of COVID-19 upon the airline industry. This necessary realignment of our regional services will help Air Canada achieve efficiencies and reduce operating costs and cash burn by consolidating its regional operations with one provider. Moreover, by streamlining the regional fleet, this agreement will also position Air Canada to operate more competitively with a single provider as traffic returns following the pandemic,” said Richard Steer, Senior Vice President, Operations and Express Carriers.

“Sky Regional has provided excellent service to Air Canada and its passengers over the past decade with an impeccable safety record and excellent on time performance and cost management. We thank Sky and all of its employees for their effort, dedication and valued partnership,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

As a result of the CPA revisions and consolidation of regional flying, Air Canada expects to realize $400 million in cost reductions over the 15-year term of the agreement ($43 million per year until 2026 and $18 million per year thereafter). This includes:

  • Increasing near term-cost certainty as a result of the combined fleet under a single operator;
  • Reducing Air Canada’s overall regional flying compensation;
  • Creating related operational costs savings;

In addition, the revised CPA will lower future contractual capital expenditure and leasing costs through a restructured CPA fleet, avoiding an estimated $193 million in future capital expenditures.

About Air Canada

Air Canada is Canada’s largest domestic and international airline, and in 2020 was among the top 20 largest airlines in the world. It is Canada’s flag carrier and a founding member of Star Alliance, the world’s most comprehensive air transportation network. Air Canada is the only international network carrier in North America to receive a Four-Star ranking according to independent U.K. research firm Skytrax. In 2020, Air Canada was named Global Traveler’s Best Airline in North America received for second straight year. In January 2021, Air Canada received APEX’s Diamond Status Certification for its CleanCare+ biosafety program for managing COVID-19, the only airline in Canada to attain the highest APEX ranking.

Chorus Aviation Subsidiary Wins New Brunswick Air Ambulance Contract

HALIFAX, NS, Feb. 18, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Voyageur Aviation Corp. (‘Voyageur’), has been awarded a contract for the provision of fixed-wing air ambulance service for Ambulance New Brunswick. The contract is for a five-year term, with option to extend for an additional five years. Voyageur currently operates this service under an existing contract and will begin operating under the new contract effective January 1, 2022.

“We are proud to deliver innovative solutions to customers with unique aviation requirements around the globe. This is a great example of our versatility to operate special missions,” said Scott Tapson, President, Voyageur.

The service will be operated with two Beechcraft King Air 200s, based in Moncton, New Brunswick. Both aircraft will undergo interior upgrades and refurbishment to improve patient care and comfort, highlighting Voyageur’s specialized aircraft modification capabilities.

Chorus Aviation Announces Fourth Quarter and Year-End 2020 Financial Results

Decreased passenger demand for aviation services due to global travel restrictions and health concerns related to COVID-19 reduced certain of the key financial metrics for the fourth quarter and year ended December 31, 2020 as shown below:

Q4 2020 Highlights

  • Net income of $9.2 million, or $0.06 per basic share; a period-over-period decrease of $27.4 million, offset by a change in unrealized foreign exchange of $25.3 million.
  • Adjusted net income1 of $7.7 million, or $0.05 per basic share; a decrease of $15.6 million quarter-over-quarter.
  • Adjusted EBITDA1 of $82.0 million; a decrease of $6.7 million over fourth quarter 2019.
  • Liquidity of approximately $201.0 million. As part of its liquidity strategy, Chorus successfully amended the repayment terms of certain of its loan agreements in the fourth quarter as outlined in the capital discussion below.
  • Chorus purchased and started earning leasing revenue on five CRJ900s, bringing the total to eight delivered under the CPA in 2020.
  • Delivered final two of five new Airbus A220-300 aircraft to airBaltic of Latvia.
  • Collected approximately 60% of lease revenue billed in the fourth quarter; a 10% improvement over third quarter 2020.

2020 Annual Highlights

  • Net income of $41.5 million, or $0.26 per basic share; a period-over-period decrease of $91.7 million.
  • Adjusted net income of $64.0 million, or $0.40 per basic share; a decrease of $30.9 million year-over-year.
  • Adjusted EBITDA of $347.5 million increased by $5.7 million period-over-period, primarily due to additional aircraft leasing revenue offset by the impact of COVID-19 on results.

HALIFAX, NS, Feb. 18, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced fourth quarter and year-end 2020 financial results and an update on the impact of the COVID-19 pandemic on the business.

“The COVID-19 crisis brought a deep, global reduction in passenger demand and onerous travel restrictions, imposing significant financial hardship on our customers.  The crisis forced us to pivot from offense to defense; shifting from our plans of organic growth to building liquidity and protecting the balance sheet,” stated Joe Randell, President and Chief Executive Officer, Chorus.

“Overall, the resiliency of our business model and the dedication of our team delivered respectable financial performance despite the unprecedented challenges the aviation industry worldwide is experiencing.  Year-over-year adjusted EBITDA was relatively consistent due primarily to the fixed fee nature of our contract with Air Canada and modest growth in aircraft leasing revenue.”

“We closed 2020 with approximately $200 million in liquidity and we anticipate this to be relatively stable to the end of this year.  Preserving liquidity remains a priority given the duration and ultimate impact of the pandemic on our industry are unknown.  We understand that the financial losses airlines are incurring are not sustainable in the long term. We continue to work with Air Canada and our leasing customers to help them manage the economic pressures they are facing as a consequence of the sustained reduction in demand for passenger air travel. We are confident that air travel will return, but given the uncertainty of when, we continue to take the steps necessary to protect the company.”

“The health and safety of our employees and customers are major areas of focus. I continue to be amazed at the resiliency of our team and I sincerely thank them for doing all possible to maintain the safety and integrity of our operations.  Many of our smaller and regional communities are without air service and I certainly appreciate the hardship and uncertainty we all face.  With over half of our employees on inactive status, this situation needs urgent attention.  We’ve been very active advocating for our industry with key government stakeholders to ensure the sustainability of regional aviation services is top of mind when making these policy decisions.  The air industry needs sector support given the circumstances.  I look forward to resuming service and providing critical links to the rest of Canada and the world through the Air Canada network, and we are eager to do so.  I’m hopeful our government will soon introduce its plan to assist our vital sector given its importance to the social fabric of Canada and any economic recovery,” concluded Mr. Randell.

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Jazz Aviation named one of Canada’s Top Employers for Young People for a ninth year

HALIFAX, NS, Jan. 19, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Jazz Aviation LP (‘Jazz’), was named one of Canada’s Top Employers for Young People for the ninth year.

“We are honoured to be recognized once again as one of the country’s Top Employers for Young People. It solidifies our commitment to provide young individuals with a meaningful and enjoyable place to start and grow their careers,” said Randolph deGooyer, President, Jazz. “While the pandemic has impacted many of our younger employees this past year, we look forward to welcoming them back as the airline industry recovers.”

Canada’s Top Employers for Young People is an editorial competition organized by the Canada’s Top 100 Employers project. This special designation recognizes employers that offer the nation’s best workplaces, programs and initiatives to attract and retain younger people entering the workforce.

In selecting this year’s Top Employers for Young People, the editors examined each employer’s mentorship and training programs as well as career management programs, looking for initiatives that can assist younger workers advance faster in the organization.

Jazz was selected as one of Canada’s Top Employers for Young People for programs such as the Jazz Aviation Pathways Program, which provides scholarships and direct employment opportunities to students enrolled in pilot and flight attendant programs at various post-secondary institutions. Jazz was also recognized for offering scholarships to students enrolled in Aircraft Maintenance Engineer (AME) programs at local community colleges and for providing mentoring to apprentice AMEs.

Jazz Aviation Named as One of Nova Scotia’s Top Employers for the Tenth Consecutive Year

HALIFAX, NS, Jan. 14, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced that its subsidiary Jazz Aviation LP (‘Jazz’) has been selected as one of Nova Scotia’s Top Employers by Mediacorp Canada Inc.

“Jazz is proud to be headquartered in Nova Scotia, continuously working to create opportunities and provide a diverse and inclusive workplace where employees have the support they need to succeed,” said Randolph deGooyer, President, Jazz. “We are honored to receive recognition from Mediacorp for the tenth time.”

Nova Scotia’s Top Employers is an annual competition that recognizes employers leading their industries in offering exceptional workplaces. Mediacorp’s evaluation of the various candidates is based on the same eight criteria as the national competition: physical workplace; work and social atmosphere; health, financial and family benefits; vacation and time off; employee communications; performance management; training and skills development; and community involvement.

In selecting Jazz for the tenth year in a row, Mediacorp cited a number of employee programs offered by the company, including engagement, reward, retirement planning, internship, mentoring and training initiatives.

Jazz Aviation Named One of Atlantic Canada’s Top Employers for the Tenth Year in a Row

HALIFAX, NS, Jan. 7, 2021 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced that its subsidiary Jazz Aviation LP (‘Jazz’) was recognized as one of Atlantic Canada’s Top Employers for the tenth consecutive year.

“We are pleased to be recognized as an organization that provides exceptional employee support and development programs as well as forward-thinking workplace policies,” said Randolph deGooyer, President, Jazz. “Making Jazz a great place for our employees to develop and succeed is something we’re very proud of.”

This special designation by MediaCorp Canada Inc. recognizes employers in Atlantic Canada that lead their industries in offering exceptional places to work. Employers are evaluated on their physical workplaces; work and social atmospheres; health; financial and family benefits; vacation and time off; employee communications; performance management; training and skills development and community involvement.

Jazz was recognized for encouraging employees to keep skills sharp throughout their careers with formal mentoring, in-house and online training, as well as idea sharing initiatives which leverage employee experience to increase productivity and improve customer service and operational efficiency. The company helps employees prepare for the future with retirement planning assistance and contribution to a pension plan and seeks to develop an ownership culture through a share purchase program, available to all employees. Exceptional performance is recognized through the Jazz Ensemble Plus program, rewarding employees for achieving operational and customer satisfaction goals.

Chorus Aviation Delivers Two Airbus A220-300 Aircraft to airBaltic

Delivering regional aviation to the world

HALIFAX, NS, Dec. 23, 2020 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today the delivery of two new Airbus A220-300 aircraft to airBaltic of Latvia. The aircraft (MSNs 55094 and 55095) are the final two of five units placed on long-term lease with the airline through a committed sale and leaseback transaction announced on November 20, 2019.

In December 2013, airBaltic became the first operator of the A220-300 aircraft and in May 2020, the carrier re-launched as an all Airbus A220 airline. “airBaltic continues to safely expand its services following the pandemic crisis and is offering flights to more than 65 destinations from all three Baltic countries,” said Vitolds Jakovļevs, Chief Financial Officer, airBaltic. “The aircraft has performed beyond the airline’s expectations, delivering better overall performance and fuel efficiency while offering an excellent flying experience.”

“We applaud airBaltic’s successful resumption and expansion of services across Europe,” stated Joe Randell, President and Chief Executive Officer, Chorus. “The state-of-the-art, Canadian-built A220 aircraft is leading the charge in helping airlines around the world resume operations as travel demand increases with the implementation of rapid testing and distribution of vaccines to limit the spread of COVID-19.”

As passengers pushed for refunds, Air Canada got more than $400 million from wage subsidy

From CBC News – link to source story and VIDEO

Airline received most aid among publicly traded companies that have disclosed finances to date

Ashley Burke, Madeline McNair · CBC News · Posted: Dec 06, 2020

Air Canada tapped into hundreds of millions of dollars in government support to pay its employees a percentage of their wages during the COVID-19 pandemic. (Darryl Dyck/The Canadian Press)

This story is part of The Big Spend, a CBC News investigation examining the unprecedented $240 billion the federal government handed out during the first eight months of the pandemic.

Air Canada has received the largest amount of government pandemic aid of all publicly traded companies in Canada that have disclosed their finances to shareholders to date, a CBC News investigation has found.

The country’s largest airline reported that it collected $492 million in public funds through the Canada Emergency Wage Subsidy (CEWS) to pay its employees over a period ending Sept. 30, according to Toronto Stock Exchange (TSX) and TSX Venture Exchanges filings.

According to CBC’s findings from information posted to date, that’s roughly four times more than the second-highest sum paid to a publicly traded company through the wage subsidy, which went to Imperial Oil. The Calgary-based energy giant disclosed it received $120 million from CEWS. Linamar, a large automobile parts manufacturer, and Air Transat also received more than $100 million each to help cover salaries.

Air Canada said that at the beginning of the COVID-19 pandemic, it employed about 40,000 people — making it one of the “larger private sector employers in Canada” in an industry hit “disproportionately hard” by the pandemic.

“Put simply, we are by far the biggest company in perhaps the worst industry,” Air Canada spokesperson Peter Fitzpatrick wrote in a statement issued to CBC News. 

Despite Air Canada receiving hundreds of millions of dollars to pay its workers, the air carrier is in the midst of private negotiations with the federal government on a possible industry-specific support package. Some experts argue the carrier is using travellers’ demands for refunds for cancelled flights as leverage to pressure the government during the negotiations.

John Gradek, a former Air Canada executive and lecturer at McGill University’s global aviation leadership program, claims the airline industry is “bullying” the government into bailing out the sector, arguing that other countries have already done so. He said Air Canada is playing a “shell game” of its own.

“I think it’s a little bit of gamesmanship that’s being played by Air Canada,” Gradek said. “They’re insisting that those refunds will only be processed if the Canadian government, through the Canadian taxpayer, is providing the funds for those refunds. Not a good thing.”

WATCH | John Gradek on Air Canada pandemic aid and fare refunds:

‘The Canadian aviation industry is really bullying the government,’ said former Air Canada executive.
John Gradek, a lecturer at McGill University, says the airline industry is arguing it’s time for the government to bail out struggling airlines since other countries have done so

400 private companies reviewed by CBC

CBC News analyzed data from more than 2,000 publicly traded companies listed on the TSX and TSX venture exchanges and identified 400 businesses that have already filed public disclosures indicating they received taxpayer support.

While the figures reviewed by CBC News indicate Air Canada has received the most taxpayer-funded pandemic support of any company to date, there could still be other companies that have received more and have not yet publicly disclosed the sums.

WestJet, Sunwing, Porter Airlines and Flair Airlines all received the wage subsidy to help cover their payrolls; none of them trade on the TSX and none of them have disclosed to CBC News the amount of money they received. Chorus Aviation, which owns regional airlines Jazz and Voyageur, received almost $97 million through the wage subsidy, according to TSX filings. 

In total, the federal government spent $1.4 billion helping Canadian airlines pay up to 75 per cent of employee wages during the pandemic, according to the federal government’s fall economic update, released last week.

‘The biggest company in perhaps the worst industry’

No one from Air Canada would sit for an interview with CBC News. In a media statement, the airline said it received a substantial amount for the wage subsidy because it employs so many people, and “as much as 95 per cent of our revenue disappearing virtually overnight, which is why the government is now looking at specific sectoral support for our industry, just as governments around the world have already done for their airlines.”

“Given this, it is only to be expected that we are a relatively large user of CEWS — our next biggest domestic competitor was less than one-third our size in terms of employees at the outset of COVID,” Fitzpatrick said.

As the pandemic crushes airline industry revenue, passengers — many of them struggling financially — have been angrily demanding that the federal government force airlines to refund them for cancelled flights.

More than 100,000 Canadians have joined petitions calling for government action on refunds, and several class-action lawsuits have been filed against airlines.

Air Canada holding $2.3B in revenue from ticket sales

Air Canada’s president and CEO, Calin Rovinescu, told Bloomberg News earlier this month that despite the financial hit, his airline has already paid back $1.2 billion in refundable airfares. 

Rovinescu told Bloomberg on Nov. 18 that he has “no quarrel” at all with refunding customers for non-refundable flights, “assuming that the terms of the support package are adequate and the terms are appropriate and reasonable.”

Air Canada has reported that, as of the end of September, it had $2.3 billion in revenue on hand from ticket sales — about 65 per cent of which came from non-refundable fares.

Air Canada president and CEO Calin Rovinescu told Bloomberg earlier this month it had one of the strongest balance sheets in the global airline industry heading into the pandemic. (Ryan Remiorz/The Canadian Press)

Gradek argues that Air Canada has the money to pay the refunds but is using it as a bargaining chip in bailout negotiations with the federal government.

“Air Canada does have the cash,” he said, pointing to the airline’s $8 billion in unrestricted liquidity as of September. “Air Canada does not need government funding in order for it to process those refunds.”

No more sectoral support without refunds, says Garneau

Transport Minister Marc Garneau said he has made it clear to airlines that they must pay out the refunds before they can get any more government aid.

“We said very clearly no — until they commit in writing to refund passengers, they will not get a cent from the Canadian government,” he said.

When asked by CBC News whether Ottawa would allow airlines to use taxpayer dollars to refund passengers, Garneau said he would not go into details since the negotiations with the airlines are confidential.

But he did suggest that if airlines meet the government’s requirements for financial support and commit in writing to refunding passengers, carriers could qualify for help. The government has imposed conditions on bailing out air carriers that require them to issue refunds, maintain air connections throughout Canada and honour any orders placed with Canadian aerospace companies.

“It takes a while to do that refunding because there are quite a few passengers, but once the refund agreement is signed — a very specific undertaking by both sides — then they’ll be in a position to receive our assistance as they begin the refunding process,” Garneau said.

WATCH | Transport Minister Marc Garneau on sectoral aid for airlines:

‘They will not get a cent’ until airlines commit to customer refunds, says Transport Minister Marc Garneau

Transport Minister Marc Garneau said the government is currently in confidential talks with major airlines about an industry-specific aid package contingent on a number of strict conditions.

‘I’m extremely upset about it’

Air Canada customer Calvin Hill said he feels like a “hostage.” 

He and his wife said they can’t afford rent in Medicine Hat, Alta., because they’re out $4,000 for Air Canada flights they never took. They say they’re sleeping in their daughter’s basement.

“I’m extremely upset about it,” Hill said. “Then to find out that the airlines want to turn around and have us Canadian taxpayers bail them out while they refuse to turn around and refund the monies back to us  — it’s very upsetting.”

Hill, who retired last year, planned to take the trip of a lifetime to Asia with his wife. Then the pandemic hit and the government told all Canadians to come home in March. 

Air Canada wouldn’t allow the couple to board their original flights out of Bangkok to get home due to travel restrictions on one of their layovers, Hill said. As a result, he and his wife had to pay for flights home with another carrier.

Hill claims an Air Canada agent promised to refund their tickets, but he’s still fighting for the money more than eight months later. He said he’s out roughly four months’ rent.

“They’re holding us as people with outstanding vouchers or refunds hostage unless we tell them, ‘Well, you give me a dollar in my left hand and I’ll give you a dollar back in my right hand to pay for it,'” he said. “Which I think is ridiculous.”

Calvin Hill and his wife Janice have been fighting for months for a refund for Air Canada flights they couldn’t board. (Submitted)

Major gap in Canada’s Air Passenger Protection Regulations

Air Canada said it’s offering non-refundable ticket holders travel credits with no expiry date that can be transferred to others or to “convert their booking to Aeroplan points and with an additional 65 per cent bonus.”The airline said this option is in line with direction given by the Canadian Transportation Agency. 

Scott Streiner, chair and CEO of the Canadian Transportation Agency, testified in front of MPs last week that there is a gap in Canada’s Air Passenger Protection Regulations that no one saw coming. Canadian airlines are not obligated to refund passengers if cancellations are out of a carrier’s control, he said. 

“[The regulations] refund obligation applies exclusively to flight cancellations within airlines controls,” Streiner told the transport committee on Dec 1. “We now know the gap highlighted by the pandemic is significant.”

Streiner said if and when the CTA gets authority to fix that gap, “we’ll fix it.”

In contrast, Air Canada is offering customers who flew out of Europe a refund for non-refundable tickets after “extensive discussions” with European Union members. 

Air Canada in talks with government

Air Canada’s third-quarter results report to investors shows the dramatic impact the pandemic has had on the company. The airline says it saw an 88 per cent drop in passenger traffic due to the pandemic and travel restrictions.

The airline did earn $757 million in the third quarter, but that represented an 86 per cent drop of $4.7 billion from its earnings in the same time period in 2019. 

Bleeding cash, Air Canada took what it called “the painful step” of cutting half of its workforce in June — 20,000 jobs — and indefinitely suspended 30 domestic regional routes. The carrier also retired some planes early and postponed or cancelled the delivery of some new aircraft, according to the company’s financial records.

Wesley Lesosky is the president of the Air Canada component of CUPE, which represents 6,000 laid-off flight attendants. He said Air Canada should have kept those people employed through the wage subsidy program, as other airlines did. 

Lesosky is also the president of the union’s airline division, which represents 15,000 flight attendants at other airlines, including Air Transat, Sunwing and WestJet. 

“If the government’s going to give an employer that amount of assistance, which is quite high, it should have conditions tied to it where the workers are actually protected,” he said.

Air Canada, meanwhile, told CBC News that Canada is “somewhat of an outlier among developed nations in not having a targeted, sectoral support program for the aviation industry.”

The carrier points to the International Air Transport Association’s chief economist, who stated recently that more than $160 billion US in government aid has gone to airlines globally.

The U.S. and some European countries have given billions in financial aid to airlines. In some cases, there were strings attached to that aid, such as governments taking  equity stakes in the airlines and requiring them to issue refunds.