Stephenville’s struggling airport has been dealt another blow, as two more airlines have cancelled their summer flights to the western Newfoundland destination.
Sunwing Airlines announced last week that when its summer flights between Toronto and Newfoundland begin June 26, they won’t be flying to Stephenville.
On Tuesday, Porter Airlines announced its planes would stay on the ground until July 29 due to COVID-19 travel restrictions, and cancelled its summer flights to Stephenville entirely.
Mayor Tom Rose said he was expecting that Porter might not fly to Stephenville this summer, but he was surprised Sunwing chose to fly to Deer Lake.
“I think Sunwing probably looked at their travel capacity and the numbers that were going to Deer Lake and Stephenville and probably made a business decision,” he said.
“[That’s] unfortunate, because they’ve been here for about a decade now.”
The announcements from Porter and Sunwing come just months after PAL Airlines flew its last flight from Stephenville in January, leaving the airport without a year-round commercial air service.
With Porter and Sunwing gone, Rose said, the airport will lose about 60 seasonal flights a year.
He said the town has been working with the Stephenville Airport Corporation to try to attract travellers in the region back to Stephenville and to encourage more airlines to offer flights from the airport.
The mayor said he also expects positive announcements in the next month or two that will make Stephenville “a more robust, busier airport for domestic travel.”
“Our airport’s been hurting for years, we’ve been putting a fair bit of municipal funds into the airport to keep it going, but it hasn’t been sustainable,” he said.
“[But] I’m pretty excited for 2021.”
‘Big opportunities’ for Stephenville
Rose said as travel restrictions due to the pandemic begin to lift, Stephenville could take advantage of increases in travel within Canada.
“People, I believe, are going to be a little hesitant to fly international, but they’ll feel a little bit more assurance and easiness about flying domestically.… There’s big opportunities for us,” he said.
In the meantime, Rose said, other sources of revenue, like air ambulance and military operations, can help keep the airport going, and the town will be providing more funding to the airport as part of a restructuring plan, in addition to a $100,000 grant given to the airport in March.
In an emailed statement to CBC News, the Stephenville Airport Corporation said it was disappointed by Porter’s decision to cancel its flights to the airport, but understands the challenges posed by the COVID-19 pandemic.
“We have a very short season and considering the provincial travel restrictions in place for Newfoundland and Labrador at this time, it would be very challenging for leisure air service to resume and be profitable,” the statement reads.
“We continually work with air carriers to encourage them to consider Stephenville Airport as a leisure market, as we have established that there is a high propensity for visiting friends and relatives in the core summer season and holidays.”
TORONTO / May 26, 2020 – Porter Airlines is deferring its resumption of flights until July 29, one month later than previously scheduled, due to ongoing COVID-19 travel restrictions.
“We want to see our planes in the sky as soon as possible and are actively working to prepare for our resumption of service. However, the ongoing uncertainty presented by government travel restrictions, including border closures, is impacting our ability to operate flights,” said Michael Deluce, president and CEO of Porter Airlines. “We are closely watching developments and know that Porter will be an important part of providing people with travel options as the economy recovers.”
Seasonal summer markets that Porter intended to serve in 2020 are being cancelled as part of this service deferral. Muskoka, Ont., and Stephenville, N.L., are the two destinations affected.
Porter is preparing to introduce enhanced health and safety measures for its return to service. Details of these initiatives will be announced closer to when flights restart, so that plans are as closely aligned with the latest public health recommendations as possible.
To provide flexibility and give travellers peace of mind when purchasing for future travel, Porter is waiving change and cancellation fees on all fares booked between today and July 29. This also applies to Porter Escapes vacation packages.
Consumer group wants strings attached to taxpayer help, including refunds for cancelled flights
Ashley Burke · CBC News · Posted: May 02, 2020
Crippled by COVID-19, Canada’s airline industry says it’s plummeting into insurmountable debt as planes sit idle and people cancel or postpone travel plans.
Behind the scenes, major airlines are pressing the federal government for an aid package to help them survive the pandemic and quickly recover when countries finally lift their travel restrictions.
“The carriers are burning through cash,” said Mike McNaney, the president of the National Airlines Council of Canada, which represents Air Canada, Air Transat and WestJet.
“The industry will not be able to get out of this challenge unless there’s government assistance.”
Heading into the pandemic, some of Canada’s large airlines were riding a financial high. But COVID-19 brought international travel to a halt, something the sector has never experienced before.
Some airlines stopped flying altogether. Others, such as Air Canada, scaled back operations by more than 90 per cent because of the unprecedented drop in demand.
Thousands of planes now sit parked across the country, costing air carriers tens of millions of dollars daily. And there’s no end in sight, said McNaney.
Airlines have been tapping into Canada’s wage subsidy program to hire back thousands of laid-off workers, but say they need an infusion of cash, loans and a freeze on taxes and fees to prop up the industry.
A consumer group warns that if a taxpayer bailout is on the way, it should come with strings attached banning airlines from paying executive bonuses and requiring them to reimburse consumers for cancelled flights during the pandemic.
Parked planes with big bills
Planes worth $10 billion are parked at airports across Canada, bleeding money, said McNaney. He added he’s “astounded” that 90 per cent of the market is gone.
Most airlines finance the purchase of their aircraft, which can cost more than $100 million each. The engines themselves are so expensive that they’re sometimes paid off separately, said John McKenna, president of the Air Transportation Association of Canada, which represents carriers like Porter and Sunwing Airlines.
“It’s been a catastrophe,” said McKenna. “Everyone is hurting. We are a capital intensive industry.
“Planes cost tens or sometimes hundreds of millions of dollars. For them to be profitable they have to be flying all the time. Sitting there, you still have to insure them, maintain them, and you have to pay for them.
“You’re not generating any money from them. You’re just losing it.”
Complicated process to restart industry
Sunwing’s president Mark Williams said some companies are managing their financial losses but won’t be able to sustain it for months on end.
“There isn’t a sector that’s been more impacted by this,” said Williams on Thursday at a virtual Canadian Club Toronto event. “We’re really looking for liquidity.
“It’s not reasonable to expect that any airline in Canada can go on like this for six months without getting some sort of financial support from the government.”
“It’s going to be a very complicated process to restart aviation,” he said. “We’ve never seen 90 per cent of capacity parked at one point in time.
“That’s like trying to walk out into a parking lot after a [hockey] game with 15,000 cars in the lot and none of them turn over because it’s too cold and their engines have all shut down. So you have to get all those cars ramped up and ready to roll. Then you have to find your way out to the parking lot.”
McNaney said the government needs to stabilize the airline industry so it can start working out the logistics of re-starting with air carriers, staff and government agencies. The longer they wait, the tougher that process will be, he said.
McNaney added that the airline and tourism industries are key to rebuilding Canada’s economy.
Government evaluating ‘all options’
A month ago, Prime Minister Justin Trudeau said he recognized the industry has been hit “extremely” hard and that help was on the way.
Finance Minister Bill Morneau has waived airport authorities’ rent fees, worth an estimated $331 million. The government is giving $17 million to Yukon, Northwest Territories and Nunavut to help airlines flying essential goods to remote northern communities.
Morneau’s office said the government is still evaluating “all options to support the industry.”
“We have been in touch with airlines and we understand the impact COVID-19 is having on their industry and we are with the workers who are facing a difficult situation in these unprecedented times,” said spokesperson Maéva Proteau in a statement to CBC News.
Williams said talks continue with the government to come up with an equitable solution so that all companies — big and small — receive help.
“The government shouldn’t be picking winners or losers here,” he said. “They need to support the industry as a whole.”
Europe, U.S. promising bailouts
Some European nations and the U.S. have agreed already to bailouts. France and the Netherlands are providing a 10-billion-euro taxpayer-funded bailout to save Air France-KLM.
The Trump administration agreed to a $25 billion bailout to prop up its airline industry. Canada’s industry is roughly ten times smaller than the American one. Some Canadian pilot and airline associations have told CBC News a $5 billion bailout from the federal government would be reasonable.
But airlines have been hesitant to put a price tag on damage that’s still unfolding, and have not offered a number to the federal government.
Customers should be reimbursed, says consumer group
If Canada does announce a bailout, some argue there should be strict criteria to ensure taxpayer money isn’t misused.
John Lawford, executive director of the Public Interest Advocacy Centre, said Ottawa should focus on “making sure companies couldn’t skim off excess profits through the bailout by giving dividends to their shareholders with that money, or giving large executive bonuses.
“These sorts of things should be prohibited.”
Lawford said the government also should make it mandatory for airlines to use some of the government aid package to reimburse customers for flights cancelled due to the pandemic.
There are two proposed class-against lawsuits against major Canadian airlines seeking full refunds for passengers whose flights were cancelled during the pandemic, according to the consumer group Air Passenger Rights. That same group has also taken the Canadian Transportation Agency to court over the issue.
“It’s a large expense for the average consumer,” said Lawford. “The $3,000 to $4,000 dollars for a large vacation you’ve been saving up for multiple years is a large cost for consumers to absorb.”
Some analysts have suggested that it could take more than five years for the airline sector to return to the same traffic it saw before COVID-19 hit.
Colin Perkel, The Canadian Press Staff ~ Published Thursday, April 30, 2020
People carry luggage at Pearson International Airport in Toronto in this file photo dated Dec. 20, 2013. THE CANADIAN PRESS/Mark Blinch
TORONTO — Clobbered by anti-pandemic measures that have stifled travel and grounded much of the world’s commercial aviation, Canada’s airports are predicting around $2 billion in lost revenues this year.
The isolation of would-be travellers, border closures and flight cancellations have led to a precipitous decline in demand for plane tickets and, by extension, airport services.
“Our airports have seen traffic and revenues plummet significantly — an average of about 90 per cent,” said Daniel-Robert Gooch, head of the Canadian Airports Council, which represents 100 airports. “Looking ahead to the end of the year, airports anticipate year-end revenues to be down about 55 per cent from where they would have been, even more at smaller airports.”
The bottom line, Gooch said, were anticipated losses of between $1.8 billion and $2.2 billion.
Globally, commercial air traffic shrunk 41 per cent below 2019 levels in the last two weeks of March alone, according to Flightradar24.com. Canada, too, has been hit hard.
Emergency isolation measures, including the closure of the U.S.-Canada border and stay-home directives, brought the rush of normal air traffic to a crawl. At least six regional airports, from Saint John, N.B. to Prince Rupert B.C., have lost scheduled passenger service altogether.
At Canada’s largest airport, Toronto Pearson International, plummeting passenger traffic has left normally bustling, frenetic terminals looking like gleaming ghost towns. About 5,000 passengers are moving through the facility each day, down from a normal 130,000, the airport said.
Tori Gass, with the Greater Toronto Airports Authority, said the number of flights has dropped from an average of 1,300 per day to about 350.
“There are approximately nine passenger airlines operating at Pearson compared to 67 airlines that were operating previously,” Gass said.
Several Canadian carriers, such as Porter Airlines and Sunwing, stopped regular flights altogether. Larger carriers, such as Air Canada and WestJet, have been limping along on drastically curtailed passenger loads, waiting along with everyone else for the pandemic skies to clear. That’s unlikely to happen any time soon.
“We anticipate the recovery to be protracted — faster at larger hub airports than elsewhere in the system — with passenger traffic in 2020 at only about 60 per cent of 2019 levels,” Gooch said.
Canada’s airports generate about $19 billion for the country’s economy and employ 194,000 people.
The sharp traffic reduction has forced airports, normally major economic hubs in their own right, into cutting mode. Some, like Calgary and Edmonton, have partially closed terminals. The airport in Windsor, Ont., suspended all commercial flights. Other measures include cutting employee wages or hours, or outright layoffs.
On Thursday, for example, Vancouver’s airport authority, which employs about 500 people across operations, finance, engineering, human resources and other sectors, became the latest to offer staff voluntary layoffs.
Gooch said about a dozen municipal and territorial airports appeared to be ineligible for the Canada Emergency Wage Subsidy, which would allow others to avoid immediate layoffs. Either way, he said, airports were struggling to cover costs, with borrowing their way through the crisis only punting the problem down the road.
While freight traffic has risen, the increase has barely offset the losses.
“Cargo aircraft movements are a fraction of normal passenger aircraft movements at most airports, and cargo doesn’t pay airport improvement fees, park at the airport, shop in the stores or eat in the restaurants,” Gooch said.
The industry, Gooch said, was hoping the federal government — already a financial life-support system for millions of Canadians and businesses — will offer loan or bond guarantees along with interest-free loans repayable over a longer period.
Airports also want Ottawa to scrap ground rents to allow them to conserve cash, focus on operations, and pay off debt acquired during the pandemic. Smaller airports need funding for essential operating expenses.
This report by The Canadian Press was first published on April 30, 2020.
TORONTO, April 17, 2020 /CNW/ – Porter Airlines intends to access the federal government’s Canada Emergency Wage Subsidy (CEWS) to return hundreds of its team members to payroll.
The airline temporarily suspended all flights on March 21, to support the public health response to COVID-19, and as travel restrictions and personal movement limitations were increasing. The majority of Porter’s 1,500 team members received temporary layoff notices at that time, with a small group maintaining business continuity.
“Our team is showing outstanding dedication during a time when most are unable to work,” said Michael Deluce, president and CEO, Porter Airlines. “As we look ahead to restarting flights when it is appropriate to do so, we are doing everything possible to stay connected with our people. The ability to use CEWS is one way of doing this. We appreciate the federal government’s support in this regard.”
CEWS provides a 75% wage subsidy (capped at $58,700 annually) to eligible employers for a limited period. This equates to a maximum benefit of $847 per week, before source deductions.
“We have taken time to understand how CEWS works in practice and ensure that our team members have an option to choose what government income support program works best for them today and in the future,” added Deluce.
Porter intends to welcome back team members to active roles as operations restart and rebuild to previous levels. In the meantime, anyone currently on temporary layoff who is returned to payroll via CEWS will remain at home on inactive status.
Certain team member health benefits have been maintained and paid for by the company during the temporary layoff period. This will continue, as will access to an Employee Assistance Program and other wellness programs.
Extensions to Porter Pass vouchers, VIPorter points and premium status
TORONTO, April 8, 2020 /CNW/ – Porter Airlines is providing greater flexibility for frequent flyers who are unable to travel due to COVID-19. Porter Pass holders and VIPorter loyalty members will continue receiving the full value of their travel programs.
Porter Pass offers frequent travellers prepaid tickets for a select number of one-way flights, at a discounted price. Porter Pass holders with vouchers set to expire between March 2 and July 31, 2020, now have until June 30, 2021 to use their passes. The system is automatically updated and no action is necessary. All other terms and conditions apply.
VIPorter loyalty members will maintain their current points balance. VIPorter points set to expire between March 19 and June 15, 2020, will be extended to December 31, 2021. Points that have already expired during this time period will be reinstated automatically. No action is required by VIPorter members.
VIPorter premium members will automatically have their current status extended until December 31, 2021. Members’ 2020 qualifying spend isn’t affected by this change, so they will continue earning towards their next premium upgrade when they begin flying again this year.
“The extensions to our travel programs provide the reassurance our passengers need during this uncertain time,” said Kevin Jackson, executive vice president and chief commercial officer, Porter Airlines. “When they are ready to return to the skies, they can resume travelling with confidence, right where they left off.”
Porter temporarily suspended operations on March 21, to support ongoing public health efforts to contain COVID-19. Reservations are currently being taken for Porter flights starting June 1. All new flights booked for June are fully changeable and can be cancelled without fees, to give passengers maximum flexibility as travel resumes.
Airline lobby group warns that, without aid, companies will fold and thousands more will be laid off
John Paul Tasker · CBC News · Posted: Apr 01, 2020
As Canada’s aviation and tourism sectors face a decline of epic proportions because of the COVID-19 pandemic, the federal government is preparing an aid package to save an industry that employs well over 2 million Canadians.
The lobby group that represents dozens of air carriers in this country is warning that, without immediate support from Ottawa, airlines will fold, thousands more will be out of work and the travel landscape in this country will be crippled for the foreseeable future.
Prime Minister Justin Trudeau has said help is on the way — but it can’t come soon enough for an industry bleeding cash.
“We recognize there are certain industries that have been extremely hard hit by both the drop in oil prices and the COVID-19 challenge, whether it’s airlines or oil and gas or tourism,” Trudeau told reporters Tuesday when asked about the prospect of support.
“There are significant areas where we’re going to have to do more. And as I’ve said from the very beginning, we will be doing more.”
Airports across the country are virtually empty as travellers heed the warnings of public health officials to stay home and avoid all non-essential international and domestic travel to stop the spread of the deadly virus.
“The impact of all this is just devastating. People aren’t flying at all or capacity is at 10, 15 per cent. Nobody can sustain that for very much longer, that’s for sure,” John McKenna, president of the Air Transport Association of Canada, told CBC News.
“We’re eagerly awaiting an aviation-specific plan but we haven’t heard anything. We have no idea what’s coming.”
His organization represents both large and small airlines, including Porter — which has grounded its entire operation— leisure carrier Sunwing and more than a dozen regional operators that serve rural and remote communities.
McKenna said that some carriers won’t make it through this crisis. He warned that the damage to the industry will only increase while it waits for the federal government to act.
‘Help us out here’
He said the promised wage subsidies for all businesses will help but his organization is also looking for interest-free loans to provide carriers with some much-needed capital.
He’s also asking that certain government fees and surcharges be waived so the companies can stay afloat. He asked that planned changes to the Canada Labour Code — including new rules for rest periods — be deferred to lessen the regulatory burden.
“Give us a break on everything else while we concentrate on surviving. Help us out here,” McKenna said.
He said some airlines were already in “dire straits” before COVID-19 hit, as carriers had to park their Boeing 737 MAX jets while still paying purchase agreement loans. The 737 Max was grounded worldwide a year ago after an Ethiopian Airlines flight crashed outside of the capital Addis Ababa, killing all 157 people onboard.
The blanket travel ban means some debt-laden companies will shutter operations altogether.
“You’re telling people not to fly. You can’t just leave us hanging like that,” McKenna said.
Finance Minister Bill Morneau announced Tuesday that Ottawa would be waiving rent payments for 21 of the country’s airports between March and December 2020.
In Canada, most major airports are operated by independent, non-profit authorities, but the land on which these airports sit is still owned by the federal government. With fewer people flying and paying fees, making the rent is a challenge.
Morneau said the rental reprieve recognizes that the air transportation industry has “suffered tremendously.”
That measure will save airport authorities about $331 million a year in rent payments. But that does little for the national and regional air carriers that fly through them.
“I’d be surprised if we saw any of that,” McKenna said.
Larger air carriers like Air Canada and Air Transat have been pressed into service to rescue Canadians stranded abroad by travel restrictions driven by the pandemic’s spread, but revenue from other operations has all but evaporated.
Air Canada, one of the world’s largest airlines, is in the midst of a system-wide shutdown that will result in a stunning 85 to 90 per cent reduction in capacity compared to the same period last year. Starting today, dozens of flights to the U.S. or international destinations will be grounded.
Nearly 17,000 of its employees have been temporarily laid off as the airline tries to protect its balance sheet and avoid bankruptcy. Beyond a few “air bridges” to locations overseas, Air Canada is a fraction of the size it was only a month ago. The company’s share price has declined by some 70 per cent from its high in January.
“To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while,” said Calin Rovinescu, president and CEO of Air Canada.
WestJet, the country’s second largest carrier, has also halted all international operations and is running some of its domestic flights with greatly reduced capacity at a time when demand has never been lower.
WestJet has laid off 7,000 employees and has cancelled virtually all planned capital investments for the year.
“This is devastating news for all WestJetters,” said Ed Sims, WestJet president and CEO, in a statement to reporters announcing the layoffs.
‘It’s the pits’
Major hotels, like Ottawa’s iconic Château Laurier, have temporarily closed while others are welcoming fewer than a dozen guests each night.
Tony Elenis, president of the Ontario Restaurant Hotel & Motel Association, said hotels are dealing with “a catastrophic” drop in business.
“It’s the pits,” Elenis said.
Some hotels have been asked by provincial health authorities to house some patients in the future as hospital capacity becomes increasingly limited, but the rates will be lower than what they could get from a regular traveller, Elenis said.
Regardless, it could be a much-needed source of revenue at a time when properties sit vacant, he said.
Dr. Theresa Tam, chief public health officer of Canada, said Tuesday that governments across the country are readying hotel rooms and other “alternative sites” to house non-COVID-19 patients or those with milder symptoms.
Quebec already has rented out a Quality Inn in Laval, Que. for this very purpose, with other sites expected to come online soon as the province grapples with the country’s largest caseload.
“We’re gearing up to accommodate patients. All of us should be working in any way we can to support those who are getting rid of this virus. A lot of hotel managers really want to support this,” Elenis said.
Tourism Minister Mélanie Joly did not respond to requests for comment.
Porter halted all of its operations on March 20 with plans to keep its planes grounded until June 1
Emily Jackson, Financial Post, March 27, 2020
The federal government will provide Toronto-based Porter Airlines with $135 million in commercial financing during the coronavirus pandemic that has grounded most air traffic and strained the global air travel industry.
Porter Airlines told the Financial Post Friday that it arranged commercial financing with Export Development Canada secured by a portion of its fleet of 29 aircraft.
The regional carrier, which operates from an island in Toronto Harbour, owns all of its aircraft and only has debt on three, according to an emailed statement.
“With this strong balance sheet, we secured a loan similar to other arrangements previously made with EDC,” an airlines spokesperson said.
“Many companies are making financially prudent plans in the current environment and this additional capital provides flexibility for our business. Porter has the financial resources to sustain the airline through this public health crisis.”
Porter halted all of its operations on March 20 with plans to keep its planes grounded until June 1. It waived change and cancellation fees for customers who had to make last-minute travel arrangements.
At the time, chief executive Michael Deluce called the speed of COVID-19 related developments “shocking.”
“It is having an unprecedented impact around the globe on businesses, economies and people,” Deluce said in a statement, adding that Porter supports government efforts to restrict the spread of disease.
Over the past few weeks, the federal government has met with representatives from Canada’s airline industry, including calls between Prime Minister Justin Trudeau and the CEOs of Air Canada and WestJet Airlines Ltd., the country’s two largest carriers.
The industry has called for government support as demand for air travel plummets to near zero thanks to travel restrictions in place to quell the spread of the virus. It’s not yet clear exactly how Ottawa will support the wider industry, but requests for help got louder after the government banned non-essential travel to the United States.
Canada’s major carriers have already laid off thousands of employees. WestJet laid off 6,900 employees, Air Canada 5,149 and Transat A.T. 3,600 people.
The International Air Transport Association estimates that global airlines will collectively lose more than $252 billion in revenue due to the drastic drop in travel.
Millions of Torontonians living and working under the flight path of Toronto’s Pearson International Airport may have noticed a big difference recently in the skies above them.
The number of flights into and out of Pearson has been cut by more than 50 per cent over the past couple of weeks, with further grim cuts coming soon because of the coronavirus pandemic.
Air traffic controllers at Pearson, Canada’s busiest airport, usually handle about 1,100 air movements a day, according to data published by the airport. Following air traffic flows on FlightAware.com and FlightRadar.com, it appears that because of bans on travel between Canada and the U.S. and the lack of demand caused by the new coronavirus, there were only about 500 air movements on Wednesday.
The peak morning and afternoon rush hours now have so few flights that the radar picture looks like the usual situation 1 a.m. Additional deep service cuts announced by Canadian and U.S. carriers suggest that the number of flights will drop sharply again by the end of March.
“It’s really eerie,” said an air traffic controller at Pearson airport.
Official flight figures for February and March were still being collated, but “it is well known that the aviation industry has seen air traffic on the whole decrease significantly,” said Brian Boudreau, manager of media relations from Nav Canada, which manages airspace across the country.
U.S. air traffic control centres have had to temporarily suspend flights or have them overseen from backup facilities because several air traffic controllers have become infected with the new coronavirus.
While not specifically saying that no Canadian air traffic controllers had fallen ill with the virus, Boudreau said all of its operations are functioning without interruption.
“We do not anticipate disruptions given the measures we’ve taken in preparation for, and in response to COVID-19,” Boudreau said. “Nav Canada is at a high degree of readiness, with contingency plans in place to ensure the continued safety of Canadian skies.”
What has been happening at Toronto Pearson and all other Canadian airports — as can be seen on flight tracking websites — is a stark illustration of why the International Air Transportation Association announced Wednesday that its 290 member airlines would likely lose $252 billion this year.
As a result of the global pandemic, thousands of Canadian aviation workers are being laid off and airlines have been in talks with Ottawa about emergency financial assistance. Without them, airline executives have said they will fail.
This will cause unpredictable but serious consequences for the Canadian economy unless the aviation industry gets hundreds of millions of dollars in urgent relief that it has been seeking.
While many Canadian businesses are appealing for help, if Canada’s aviation industry falters it would have serious repercussions. That’s because the country’s size, and how thinly the population is spread out, make the economy especially dependent on aviation to fly people and critical cargo around.
The staggering knock-on effects of the disease on the aviation industry can be vividly seen by anyone driving past Kitchener/Waterloo airport. Sunwing Airlines Inc. of Etobicoke, Ont., has parked 13 Boeing 737s there that would normally be flying flat out at this time of year to get Canadian snowbirds to and from sunny destinations in the U.S., the Caribbean and Mexico. All 470 Sunwing pilots were laid off on Monday.
“We had to close one of our runways to make space for the Sunwing aircraft,” said Kitchener Waterloo’s airport manager, Chris Wood. “It is really unfortunate that this is creating huge problems for our industry but we are here to help in any way we can.
“We had conversations with all the carriers last week. Looks like they are all finding homes for their aircraft, typically as close to their maintenance facilities as possible.”
Toronto’s island Billy Bishop airport has also closed one of its runways to park some of Porter Airlines’ fleet of 29 Q-400 aircraft, which stopped flying last Friday. Transat, which is based in Montreal, is winding down all its operations and won’t resume them for at least five weeks.
WestJet Airlines announced this week that it was suspending all international flights and would be cutting 6,900 jobs from its workforce of about 14,000 through voluntary and involuntary layoffs.
It has grounded 126 of its aircraft and parked them at 10 Canadian airports from Terrace, B.C., to Sault Ste. Marie, Ont., and Halifax, accordingly. The bulk of the Calgary-based carrier’s jets are there or at Toronto’s Pearson, Westjet said in an email Thursday, though some of the aircraft might still be repositioned.
A substantial number of its overwhelmingly Boeing fleet is also in Vancouver, Kelowna or Edmonton. Ten more of them are parked at an airfield in Arizona between Phoenix and Tucson, where there is less corrosion because of the desert air.
Speaking from Geneva on Wednesday, the head of the International Air Transport Association, Alexandre de Juniac, said he expects that because of the new coronavirus, airlines will require $200 billion in emergency government aid to remain solvent. The British government said this week that it would not bail out airlines. However, “as a last resort,” it might speak with some carriers on an individual basis.
The North American aviation industry has generated about two-thirds of the industry’s global profits in recent years. But since the novel coronavirus seized global attention when it was first detected in December, shares in the four leading U.S. carriers have lost between 40 per cent and 66 per cent of their value. The airlines have made an urgent appeal for $50 billion in emergency funding to avoid bankruptcy.
Air Canada is suspending almost all international flights and laying off 60 per cent of its cabin crew.
Dubai and Abu Dhabi, which are the hubs for international aviation giants Emirates Airlines and Etihad Airlines, announced that effective Wednesday night, all flights to and from those Gulf sheikdoms would be suspended for at least two weeks.
Singapore Airlines, which often wins awards for having the best customer service, cut 96 per cent of its flights on Wednesday and grounded all but 11 of its 196 aircraft. KLM announced this week that it was slashing 90 per cent of its flights.
Hong Kong Express, which is owned by Cathay Pacific, went even further. It cancelled all flights until the end of April.
These actions followed steep flight cuts by Cathay Pacific and European carriers such as Lufthansa and British Airways. Qantas, the Australian carrier, has cut all international flights, laid off 20,000 of its 30,000 workers and arranged Wednesday for $1 billion in additional credit by using seven of its widebody jets as collateral.
Even worse than this tsunami of flight suspensions and appeals for aid, the aviation industry will still face immense challenges, whether or not a treatment or a vaccine for the new coronavirus is found. It is widely expected that few corporations will have much money to spend to fly large numbers of their executives around the world in the expensive business class seats that provide major carriers with much of their profit.
Nor, whenever the crisis ends, will large numbers of tourists have money to spend on exotic holidays. This, in turn, will lead to far fewer hotel and resort bookings for major corporations and small businesses that have had to close down most of their operations.
Particularly hard hit will be cruise ships. They will suffer from a double whammy of fewer passengers with money to spend and, perhaps fatally, because several cruise ships ended up becoming huge incubators for the virus, helping to spread the disease around the world.
Matthew Fisher is an international affairs columnist and foreign correspondent who has worked abroad for 35 years. You can follow him on Twitter at @mfisheroverseas