Resumed service features updated uniforms and enhanced streaming entertainment
Updated cabin interior to be available on select aircraft starting this fall
MONTREAL, Sept. 7, 2021 /CNW Telbec/ – Air Canada Rouge, Air Canada’s leisure airline, resumed service today with flights operating between Toronto and Las Vegas, Orlando, and Regina, with other destinations being introduced in September, including Cancun and Tampa.
“Air Canada Rouge remains integral to Air Canada’s overall strategy. As we emerge from the pandemic, we anticipate increased demand for vacation travel and from customers flying to enjoy overdue visits with family and friends. Air Canada’s leisure airline is ideally suited to serve this market with a compelling array of leisure destinations and an inviting travel experience so that the holidays begin as soon as customers board an Air Canada Rouge aircraft,” said Jon Turner, Vice President Inflight Services and President, Rouge Operations, at Air Canada.
Air Canada Rouge also provided a sneak peek of the cabin interior that will be available on nine Airbus A321 aircraft of the 39-aircraft Rouge Fleet, with the first entering service later this fall.
These nine aircraft feature a new contemporary interior design with playful Rouge brand accents and will be configured with leather seats, with 30-inch seat pitch in the Economy cabin. The A321 Rouge aircraft also offer upgraded personal power options, including USB-C ports, and a convenient personal electronic device holder integrated into the seatback.
With the resumption of Air Canada Rouge service, which had been suspended since spring 2021, customers can also enjoy recent product and design enhancements onboard all Rouge aircraft. These include:
Upgraded streaming entertainment – customers no longer need to use an app to stream content; customers can now stream hours of television and movies available on a complimentary basis directly to their own device via their web browser, or their complimentary, sanitized iPad in Premium Rouge.
Refreshed uniforms – Rouge flight attendants will be sporting a new uniform featuring many pieces of the award-winning Air Canada mainline uniform, accented with new neckwear and brevets to represent the Rouge brand.
All Air Canada Rouge flights are operated with narrow-body Airbus aircraft offering high-speed Wi-Fi (available for purchase) and a choice of Premium Rouge and Economy services. Customers travelling in the Premium Rouge cabin will be offered a complimentary bar and beverage service, and a complimentary meal on flights over two hours, or a snack on flights of shorter duration.
All flights are operated using the Air Canada CleanCare+ suite of biosafety measures. Customers can collect and redeem Aeroplan points through Canada’s leading loyalty program when travelling and eligible customers have access to priority check-in, Maple Leaf Lounges, priority boarding and other benefits.
More information about Air Canada Rouge flights can be found at: www.flyrouge.com
About Air Canada
Air Canada is Canada’s largest domestic and international airline and, in 2019, 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 for the second straight year. In January 2021, Air Canada received APEX’s Diamond Status Certification for the Air Canada CleanCare+ biosafety program for managing COVID-19, the only airline in Canada to attain the highest APEX ranking. Air Canada has also committed to a net zero emissions goal from all global operations by 2050.
New connections to Orlando and Fort Lauderdale starting in November 2021
The airline is resuming its international service to Punta Cana and Cancun with more frequent flights
MONTREAL, July 29, 2021 /CNW Telbec/ – Air Canada is pleased to announce two new winter services departing from Jean Lesage International Airport (YQB): Orlando and Fort Lauderdale, two very popular sun destinations in Florida, highly favoured by Quebecers. Flights to Fort Lauderdale will start on November 19 and flights to Orlando on December 17. Starting December 4, Air Canada will also be offering more flights to Punta Cana and Cancun.
“We’re excited to be launching these two new routes to Florida from Quebec City, a first for Air Canada. We know that, for many Quebecers, Florida is a popular place for winter vacations,” said Mark Galardo, Senior Vice President, Network Planning and Revenue Management at Air Canada. “Punta Cana and Cancun are also among the most popular tropical destinations, and we are happy to be able to bring back these connections. These routes will not only provide more diverse flight options for Quebec City residents but will also strengthen our foothold in a growing market and better serve the Jean Lesage International Airport, our long–time partner. Now that restrictions are easing, it’s time to start travelling again and book your escape to the sun. We can’t wait to see you back on board.”
“We’re delighted that Air Canada is resuming its international flights from Quebec City to destinations as popular as Cancun, Punta Cana, Orlando and Fort Lauderdale,” said Stéphane Poirier, President and CEO of Jean Lesage International Airport (YQB). “Not only has Air Canada decided to bring back some pre-pandemic connections, but it has also chosen to invest in our market by increasing the frequency and adding two new destinations to the schedule for winter 2021. Now that we can finally travel again, it’s essential that the people in the Greater Quebec City area are able to depart from YQB. This announcement is the result of a fruitful and beneficial collaboration between Air Canada and YQB.”
Air Canada flights out of Quebec City will be operated by Rouge on Airbus A319 planes that can accommodate 136 passengers. Seats can be booked on aircanada.com or the Air Canada app, as well as through Air Canada service centres and travel agencies.
Quebec City– Fort Lauderdale
Up to 4 x weekly
1 x weekly
Quebec City–Punta Cana
2 x weekly
2 x weekly
Travel policy, for booking with complete confidence
Air Canada’s new refund policy will apply to all tickets purchased. The airline offers a full refund based on the original form of payment, an Air Canada travel voucher or the equivalent in Aeroplan points, plus an additional 65 per cent if the airline has to cancel a flight or change the schedule by more than three hours.
Are you travelling abroad? Check our COVID-19 hub or IATA’s Timatic website for the most recent government entry requirements. Passengers are responsible for making sure they meet all government entry requirements. In particular, they will need to have all required travel documents, visas and health certificates and comply with all other entry criteria that apply to the flights for which they have purchased tickets. Government requirements may change at short notice.
About Air Canada
Air Canada is Canada’s largest domestic and international airline and, in 2019, 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 for the second straight year. In January 2021, Air Canada received APEX’s Diamond Status Certification for the Air Canada CleanCare+ biosafety program for managing COVID-19, the only airline in Canada to attain the highest APEX ranking. Air Canada has also committed to a net-zero emissions goal from all global operations by 2050.
The union said that forcing workers to cover their discreet tattoos and remove their additional piercings caused them stress and anxiety
Christopher Nardi • May 21, 2021
OTTAWA – In a reflection of changing social norms, a labour arbitrator has ruled that cabin crew on Air Canada flights should be allowed to sport discreet but visible tattoos, as well as piercings in their ears and nose without fear of disciplinary action.
Until last week, Air Canada’s personnel policy did not formally allow any cabin personnel from having any visible tattoos and piercings (minus a pair of matching stud earrings) while on duty.
But in a brief but impactful ruling, labour arbitrator William Kaplan put an end to much of the policy described by Air Canada’s cabin crew union as “unreasonable and discriminatory.”
So going forward, don’t be surprised if you see Air Canada and Air Canada Rouge cabin crew sporting any of the following, as now allowed by the arbitrator:
Henna tattoos, a temporary form of body art generally using a paste from certain plants, so long as they are worn for any religious, cultural or celebratory reason.
Visible but “discreet” tattoos anywhere except on most of the head or neck, so long as they are not offensive or refer to “nudity, hatred, violence, drugs, alcohol, discrimination or harassment.”
Kaplan also makes significant changes to both airlines’ very strict policy on piercings by bumping the maximum of acceptable earrings per ear from one to three, as well as allowing a single nose piercing.
But not anything goes in terms of piercings. For earrings, they must be made of either plain gold, rose gold, silver, diamond, wood or pearl and must be a stud “no larger than a quarter inch” or a hoop that is no bigger than a Canadian dime, the arbitrator ruled.
Nose piercings must also be either a stud or hoop that must fit “flush or snug against the nostril.” Any visible adornment that stretches the ear or nose in any way, such as spacers, gauges, plugs or tunnels are still forbidden.
In his ruling, Kaplan disagreed with Air Canada’s assertion that their policies were “reasonable and not discriminatory” and that they were necessary to both protect the companies’ image as well as ensure customers’ views and values were being respected.
“I agree that the Companies’ image is important to their brands, and that customers’ views and values are important. Indeed, other airlines have policies regarding tattoos and piercings,” Kaplan wrote.
“However, it is not clear that the Companies’ tattoo and piercings policies, in their present form, are necessary to advance their business interests,” he added, noting that the changes are also to ensure the airlines’ policies comply with the collective bargaining agreement and the Canadian Human Rights Act.
In his ruling, the arbitrator also requires Air Canada to expunge any disciplinary action relating to the now-defunct tattoo and piercing policies from impacted employees’ records.
Kaplan’s decision formalizes an agreement between the Air Canada Component of the Canadian Union of Public Employees (CUPE) and the airline reached after the union filed a grievance back in 2019 against the company’s personal grooming standards.
On social media, the union said that forcing workers to cover their discreet tattoos and remove their additional piercings caused them stress and anxiety.
“We are extremely pleased we were able to work with our national carrier to come to an agreement on tattoos, henna and piercings being visible in the workplace,” local union president Wesley Lesosky said in a statement.
“This decision is good news for our members. It’s a precedent-setting award not just in the airline sector but across the board, and reflects an evolving and more accepting view towards free expression in the workplace.”
In a statement, Air Canada said the ruling is a sign of the times, where visible tattoos and multiple piercings are increasingly accepted without being viewed as a mark of unprofessionalism.
“Air Canada accepts this ruling as it provides clarity with respect to this matter. Social norms evolve and as a consequence corporate policies do change over time to reflect these, so we will be updating our policy accordingly and implementing this decision,” spokesperson Peter Fitzpatrick wrote in a statement.
Citing confidentiality reasons, both CUPE and Air Canada declined to say how many employees had been disciplined in the past for visible tattoos and unacceptable piercings or what kind of sanctions they faced. But Lesosky said no financial compensation would be required by any employees.
He also hopes workers for other airlines with similarly restrictive tattoo and piercing are encouraged to speak up thanks to this case.
“This is the first ruling of its type for the sector, and certainly this would open the door for other groups within the airline sector to pursue a similar course of action,” the union president said.
With its continued efforts to diversify its revenue streams and capitalize on the demand for cargo transportation, Air Canada is hoping to convert seven of its retired Rouge Boeing 767s by the end of 2022. Nearly two years away from this goal, the airline at least hopes to have two of the conversions complete by the end of 2021.
2020 was a devastating year for many airlines, including Air Canada. As part of its recent earnings reports, the Canadian carrier quantified its heavy losses by showing that it took an overall operating loss of nearly C$3.8 billion (nearly US$3 billion). To Air Canada’s leadership, it was “the bleakest year in the history of commercial aviation.”
Despite the gloomy situation, the airline highlighted some of its successes and achievements over the course of 2020. This included its ability to quickly pivot to cargo-only operations and reduce cash burn. Part of this expenditure-reduction sadly resulted in the retirement of 79 aircraft and the cancelation of some new aircraft orders, namely some Airbus A220 and 737 MAX jets.
As the airline continues to face hard-hitting international travel restrictions imposed by the government of Canada, it is hoping that cargo operations will have a larger part of its revenue stream.
Capitalizing on cargo
The initial pivot to cargo-only flights took the form of modifying its passenger aircraft to allow for freight in the passenger cabin. This was first seen on some of the carrier’s Boeing 777s and carried over to an Airbus A330. These weren’t full-on cargo conversions, however. Instead, the airline removed seats and installed netting and floor-markings (to ensure safe weight-distribution across the passenger deck).
As part of the airline’s Q3 2020 earnings call, it was revealed that there were plans to convert some retired Boeing 767s into permanent freighters. The 767s most recently had flown as part of the Air Canada Rouge brand.Advertisement:
Since that call, Air Canada has managed to strike an agreement with its pilots for an appropriate level of pay for cargo flights. The airline said this had to be done to remain competitive with other freight carriers.
Now, as part of the airline’s most recent earnings call, we have a little more clarity on the timeline for these 767 conversions.
767 conversion timeline
Lucie Guillemette, Air Canada’s EVP & CCO, noted in the call that the airline’s first two freighters are expected to be in service in time for this year’s fourth-quarter peak airfreight season.
With seven 767s on the list for conversion, it looks like the remaining five will be converted next year, in 2022. This was confirmed by the carrier’s current Chief Financial Officer and future Chief Executive during the earnings call in which Simple Flying attended:
“We’d love to have all seven up and operating by the end of next year. These are typically little bit of a longer process and slots are not really available, but we are certainly working on having all seven up and running by Q4 of next year.” – Michael Rousseau, deputy chief executive officer & chief financial officer, Air Canada
Rousseau’s comments on conversion slot availability allude to the fact that aircraft conversion services are seeing high demand from air operators to convert old passenger aircraft into freighters.
Apart from the two being converted this year, it looks like Air Canada will just have to wait further back in line to have the majority of its old 767s converted.
About 2,900 airline jobs have been cut in Canada so far this year
The Canadian Press · Posted: Feb 05, 2021
WestJet Airlines Ltd. will lay off 120 cabin crew members as of March 2, blaming the measure on the lack of flights to Mexico and the Caribbean.
The employees were told about the additional cuts on Friday morning, WestJet spokeswoman Morgan Bell said.
“We continue to provide all eligible laid-off employees access to CEWS [Canada Emergency Wage Subsidy] and have no additional workforce updates to announce at this time,” Bell said.
The layoffs come as Canadian airlines agree, at the request of the federal government, to suspend all flights to Mexico and the Caribbean until April 30.
Canada is also implementing new measures such as mandatory hotel quarantines for international travellers arriving in the country, in an effort to slow the spread of COVID-19.
In response to the new government measures, Air Canada said Friday that it is weighing measures such as shortened work weeks to temporarily reduce management levels as a way of preserving cash.
“We continue to manage staffing levels through mitigation as the situation requires, just as we have done since the start of the pandemic,” Air Canada spokeswoman Pascale Dery said.
Air Canada also said this week that it will pause all operations of Air Canada Rouge and lay off 80 employees starting Feb. 8 as a result of the flight suspensions.
Air Canada’s flights to Mexico and the Caribbean had been operated primarily by Rouge, Air Canada said Thursday. Rouge’s operations were suspended for part of 2020, but were resumed ahead of the winter travel season.
Friday’s announcement by WestJet follows other rounds of layoffs in the airline sector since the start of 2021, after a spike in virus cases prompted additional travel restrictions.
Air Canada announced last month that it would lay off around 1,700 workers and cut more routes after seeing a drop in travel demand. WestJet also laid off 1,000 workers in January and further reduced its flight schedule.
As of Jan. 7, travellers to Canada have been required to show proof of a negative COVID-19 test, a measure that airlines say has had an immediate impact on bookings.
Only five international and six domestic flights with passengers infected with COVID-19 landed at Canadian airports last week.
That’s compared to 44 international and 60 domestic flights recorded the week previous, according to publicly available data from Health Canada.
Five of the six domestic flights occurred on Nov. 16 — Swoop 406 between Toronto and Abbotsford, PAL Airlines 1902 between Quebec City and Sept-Iles, Jazz 8280 between Vancouver and Prince Rupert, Air Canada 341 between Ottawa and Vancouver, and Air Canada 209 between Calgary and Vancouver.
The sixth flight was Air Canada 428 from Toronto to Montreal on Nov. 17.
Internationally, only two infected flights originated from the United States, both from Chicago — United 4552 to Toronto on Nov. 16 and Air Canada 7596 to Montreal on Nov. 17
Other international flights include Air Canada 989 from Cancun to Montreal and Rouge 1994 from Mexico City to Toronto — both on Nov. 17 — and Turkish Airlines 17 from Istanbul to Toronto on Nov. 18, the only non-North American flight to carry COVID-positive passengers.
Calgary, home to the federal government’s pilot program testing international arrivals for COVID-19, recorded no infected passengers over the past week, down from two the week previous.
Turkish Airlines has carried the most COVID-19 infected passengers of any international carrier over the past two weeks — seven to Toronto and one to Montreal.
Health Canada only posts data online from the past two weeks, and does not list how many passengers on board tested positive, only — when available — listing ranges of row numbers of where the person may have sat.
Data on infections comes from a variety of sources, states Health Canada, including contact tracing and information from local public health authorities.
Thirty-six infected domestic and international flights landed in Toronto since Nov. 8, the highest in Canada, while 24 landed at Vancouver, 19 at Montreal and six at Calgary.
Since March, only four Canadian airports — Montreal, Toronto, Calgary and Vancouver — are permitted to accept international flights, with some exceptions.
COVID-19 Mitigation and Recovery Plan nearly complete
Total passengers carried declined 88 per cent due to COVID-19 and travel restrictions
Deferral and/or cancellation of Boeing 737-8 and Airbus A220 deliveries
Reduction of capital expenditures by about $3.0 billion over 2020-2023 period
MONTREAL, Nov. 9, 2020 /CNW Telbec/ – Total revenues of $757 million in the third quarter of 2020 declined $4.773 billion or 86 per cent from the third quarter of 2019. The airline reported third quarter 2020 negative EBITDA or (earnings before interest, taxes, depreciation and amortization), excluding special items, of $554 million compared to third quarter 2019 EBITDA of $1.472 billion. Air Canada reported an operating loss of $785 million in the third quarter of 2020 compared to operating income of $956 million in the third quarter of 2019. Total revenue passengers carried declined 88 per cent in the quarter compared to last year’s third quarter. Unrestricted liquidity amounted to $8.189 billion at September 30, 2020.
“Today’s results reflect COVID-19’s unprecedented impact on our industry globally and on Air Canada in what has historically been our most productive and profitable quarter. From the outset, we have made the health and safety of our customers and employees our chief concern. Our airline has been a leader in introducing progressive layers of protection, such as our comprehensive suite of biosafety measures, Air Canada CleanCare+, and we continue to explore new technologies and processes to further assure travellers and regulators. Amongst the various science-based measures we have been advocating, testing at airports is by far the most significant, as demonstrated by the McMaster HealthLabs’ study of international travellers arriving at Toronto-Pearson. It was reported to be the largest-ever study of its kind and preliminary results clearly confirm safe alternatives exist to a mandatory 14-day quarantine, which is both stifling demand and frustrating travellers who are willing to be tested,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada.
“In parallel, we acted decisively to implement our COVID-19 Mitigation and Recovery Plan. Since March, we have raised almost $6 billion in additional liquidity, leveraging what was one of the industry’s strongest balance sheets as we entered the pandemic. We took the painful steps of eliminating 20,000 jobs, after having created 10,000 over the previous five years, and of reversing 10 years of profitable network expansion by reducing capacity by more than 80 per cent in the third quarter.
“At the end of June, we made the difficult decision to indefinitely suspend 30 domestic routes and close eight regional stations and our Network Planning team has identified up to a further 95 domestic, U.S. transborder and international route suspensions and nine Canadian station closures required to preserve liquidity, cut costs and reduce capital expenditures as we prepare for a smaller footprint expected to last several years. Given the public statements made by the Honourable Marc Garneau, Canada’s Minister of Transport, on November 8, 2020 regarding commencing immediate discussions with major airlines on aviation industry sector-specific support, we are deferring the additional route suspensions and station closures pending the progress of those discussions.
“According to IATA’s Chief Economist, governments have already provided more than US$160 billion of aid to airlines globally, recognizing the critical role they play in a country’s economy. Beyond sustaining tens of thousands of direct and indirect jobs, a healthy Canadian airline industry is essential for Canada’s infrastructure on which its economic recovery from COVID-19 depends and vital to securing the country’s place in a reordered, post-pandemic world. The impact on the industry and on the economy of how we as a country handle this crisis in air transportation will be felt for years to come.
“We have also continued our discussions with the Government of Canada on a more measured, science-based approach to travel restrictions and quarantines, which remain amongst the most onerous in the world. Preliminary results from several international studies and our McMaster HealthLabs study indicate testing can provide an effective responsible alternative to facilitate the safe relaxation of quarantines.
“We have taken several measures to carefully rationalize our existing fleet: We are accelerating the retirement of 79 mainline and Rouge aircraft. We are deferring delivery of new Boeing 737-8 and Airbus A220 aircraft scheduled for delivery in 2021 and 2022 and cancelling 10 Boeing 737-8s and 12 Airbus A220s, representing about 40 per cent of the remaining scheduled deliveries. Despite modifications made to our orders, these two aircraft remain the core of our narrowbody fleet and enable us to efficiently serve transcontinental domestic and transborder routes through improved economics and range, while providing an excellent customer experience. Through this fleet restructuring and other capital reduction initiatives, we have successfully lowered total projected capital expenditures by about $3.0 billion over the 2020 to 2023 period compared to our total projected capital expenditures at the end of 2019.
“In addition to the mitigation steps we have taken, Air Canada is also preparing for the post-COVID recovery. Along with other ongoing initiatives, this month we launched the new Aeroplan, expected to be one of the best travel loyalty programs available. Our simplified and restructured aircraft fleet will be highly fuel efficient and well-configured for our key routes. Our proposed acquisition of Transat A.T. Inc. will enable us to better compete with global competitors in a drastically altered global airline market. Our nimble Cargo team has pivoted to dedicated all-cargo flights during the pandemic and Cargo will become an increasingly important segment of our business going forward. Most importantly, our culture remains strong – we have employees who remain highly motivated and intensely focused on safely transporting our customers and I thank them for their commitment and hard work,” concluded Mr. Rovinescu.
Air Canada has taken or will be taking the following measures as part of its COVID-19 Mitigation and Recovery Plan:
Customer Service and Safety
Air Canada makes safety its first consideration in all that it does and has been continually updating its health and safety policies and procedures for travellers and employees in all workplaces, airports, and onboard aircraft to account for new information about COVID-19 as it becomes available. This includes a requirement for customers to wear a protective face covering, as well as enhanced protective personal equipment for airport agents and crews, the reinforcement of safe practices such as frequent hand-washing and collaborating with the Canadian federal government to screen passengers to help determine fitness for flying.
To underscore its commitment to customer and employee safety, Air Canada introduced Air Canada CleanCare+. This program is designed to reduce the risk of exposure to COVID-19 through such measures as enhanced aircraft grooming, mandatory preflight customer temperature checks in addition to required health questionnaires and providing all customers with care kits for hand cleaning and hygiene.
Air Canada has undertaken several medical collaborations to continue advancing biosafety across its business, including with Cleveland Clinic Canada in Toronto, a renowned global healthcare leader, to provide additional science-based evidence in our ongoing COVID-19 response; with Ottawa-based Spartan Bioscience to explore rapid COVID-19 testing in an aviation environment; and since last year with Toronto-based BlueDot, a company that monitors infectious diseases globally in real time to give us accurate, relevant information to make business and safety decisions quickly.
Air Canada has been partnering with McMaster HealthLabs and the Greater Toronto Airports Authority in a study of international travellers arriving at Toronto Pearson International Airport. Preliminary results indicate that testing can provide an effective, responsible alternative to facilitate the safe relaxation of quarantines.
Air Canada recently announced that it was finalizing an initial order of Abbott’s ID NOW COVID-19 rapid response tests as part of its ongoing evaluation of COVID-19 testing technology and protocols, one of the first private sector companies to do so.
Air Canada also recently announced plans to explore the application of COVID-19 contact tracing technology in its workplace using the Bluetooth enabled TraceSCAN app and wearable technology developed by Canadian-based Facedrive Inc.
To meet the demand for the global transport of goods, including personal protective equipment during the pandemic, Air Canada operated more than 3,000 all-cargo international flights since March 22, 2020, and plans to operate up to 100 all-cargo flights per week in the fourth quarter of 2020 using a combination of Boeing 787 and Boeing 777 aircraft as well as four converted Boeing 777 and three converted Airbus 330 aircraft where it has doubled available cargo space by removing seats from the passenger cabin.
Air Canada announced special benefits and accommodations for Aeroplan and Altitude members in light of COVID-19. These include pausing mileage expiration, grandfathering mileage-earned status, waiving certain change and redeposit fees, and launching new promotions so that members can earn additional Aeroplan Miles without leaving home.
Capacity and Route Network
Air Canada reduced second and third quarter 2020 ASM capacity by 92.0 per cent and 81.7 per cent, respectively, compared to the same quarters in 2019, and plans to reduce fourth quarter 2020 capacity by approximately 75 per cent compared to the fourth quarter of 2019. The airline will continue to dynamically adjust capacity and take other measures as required to adjust for demand, including as a result of health warnings, travel restrictions, quarantines, border closures and passenger demand.
On June 30, 2020, Air Canada suspended service indefinitely on 30 domestic regional routes and closed eight stations at regional airports in Canada.
Financing and Liquidity
In March 2020, Air Canada drew down its US$600 million and $200 million revolving credit facilities for aggregate net proceeds of $1.027 billion.
In June 2020, Air Canada concluded an underwritten marketed public offering of 35,420,000 voting shares of Air Canada at a price of $16.25 per share for aggregate proceeds of $576 million, and a concurrent marketed private placement of convertible senior unsecured notes due 2025 for aggregate proceeds of US$748 million ($1.011 billion).
In June 2020, Air Canada completed a private offering of $840 million aggregate principal amount of 9.00 per cent Second Lien Secured Notes due 2024, which were sold at 98 per cent of par.
In June 2020, Air Canada completed a private offering of one tranche of Class C Enhanced Equipment Trust Certificates (EETCs) with a combined aggregate face amount of approximately US$316 million ($426 million), which were sold at 95.002 per cent of par.
In September 2020, Air Canada concluded a private offering of two tranches of EETCs, the proceeds of which were used to purchase equipment notes issued by Air Canada and secured by three Boeing 787-9 aircraft, three Boeing 777-300ER aircraft, one Boeing 777-200LR and nine Airbus A321-200 aircraft. The two tranches of certificates have a combined aggregate face amount of US$553 million ($740 million) and a weighted average interest rate of 5.73 per cent. Air Canada used the proceeds from this financing together with cash on hand to repay in full the US$600 million ($803 million) 364-day term loan originally put in place in April 2020 and discussed in Air Canada’s second quarter 2020 MD&A.
In September 2020, Air Canada concluded a committed secured facility totaling $788 million to finance the purchase of the first 18 Airbus A220 aircraft. As aircraft are financed under this new Canadian dollar facility, the bridge financing of $788 million put in place in April 2020 (and discussed in Air Canada’s second quarter 2020 MD&A) will be repaid concurrently. At September 30, 2020, nine Airbus A220 aircraft were financed under this facility with the corresponding bridge financing repaid.
In early October 2020, Air Canada announced that it had completed sale and leaseback transactions for nine Boeing 737-8 aircraft for total proceeds of US$365 million ($485 million). The nine aircraft were delivered to Air Canada in the past three years.
Air Canada’s unencumbered asset pool (excluding the value of Aeroplan, Air Canada Vacations and Air Canada Cargo) amounted to approximately $1.8 billion following the closing of the transactions discussed above. As part of Air Canada’s ongoing efforts to maintain adequate liquidity levels, additional financing arrangements continue to be assessed.
Air Canada suspended share purchases under its Normal Course Issuer Bid in early March 2020 and did not renew its issuer bid upon its expiry in the second quarter of 2020.
Cost Reduction and Capital Reduction and Deferral Program
Air Canada initiated a company-wide cost reduction and capital reduction and deferral program for 2020, which has now reached approximately $1.5 billion, increased from an initial target of $500 million. On a capacity reduction of 81.7 per cent, third quarter 2020 operating expenses decreased $3.032 billion or 66 per cent from the same quarter in 2019, reflecting the significant progress made on both managing variable costs and reducing fixed expenses. Air Canada continues to seek additional opportunities for cost reduction and cash preservation.
Air Canada announced a workforce reduction of approximately 20,000 employees, representing more than 50 per cent of its workforce. This was achieved through layoffs, terminations of employment, voluntary separations, early retirements and special leaves.
Air Canada adopted the Canada Emergency Wage Subsidy (CEWS) for most of its workforce effective March 15, 2020. In July 2020, the program was redesigned and extended until December 2020. In September 2020, the Government of Canada announced a further extension of the program to June 2021. Air Canada intends to continue its participation in the CEWS program for active employees, subject to meeting the eligibility requirements.
Air Canada is permanently retiring 79 older aircraft from its fleet – consisting of Boeing 767, Airbus A319 and Embraer 190 aircraft. Their retirement will simplify the airline’s overall fleet, reduce its cost structure, and lower its carbon footprint.
Air Canada concluded an amendment to the purchase agreement for Airbus A220-300 aircraft which became effective in early November 2020. As a result, Air Canada has deferred 18 aircraft deliveries over 2021 and 2022 and will not be purchasing the last 12 Airbus A220 aircraft. Air Canada expects to take delivery of five Airbus A220 aircraft in the fourth quarter of 2020.
In early November 2020, Air Canada also amended its agreement with Boeing to cancel 10 Boeing 737-8 aircraft deliveries from its firm order of 50 aircraft and to defer its remaining 16 aircraft deliveries over the late 2021 to 2023 period.
Through this fleet restructuring and other capital reduction initiatives, Air Canada successfully lowered its planned capital expenditures by approximately $3.0 billion for the 2020 to 2023 period compared to its projected capital expenditures at the end of 2019.
Third Quarter Summary
Air Canada recorded a net loss of $685 million or $2.31 per diluted share compared to net income of $636 million or $2.35 per diluted share in the third quarter of 2019.
At September 30, 2020, net debt of $4.973 billion increased $2.132 billion from December 31, 2019, reflecting the impact of net cash used for operating and investing activities in the first nine months of 2020. The unfavourable impact of a weaker Canadian dollar, at September 30, 2020 compared to December 31, 2019, increased foreign currency denominated debt (mainly U.S. dollars) by $141 million.
In the third quarter of 2020, net cash flows used in operating activities of $286 million deteriorated by $1.120 billion from the same quarter in 2019 on lower operating results, reflecting the impact of the COVID-19 pandemic.
In the third quarter of 2020, net cash used in financing activities amounted to $332 million, an improvement of $33 million from the third quarter of 2019. Net proceeds from debt financings amounted to $1.101 billion. Reduction of long-term debt and lease liabilities of $1.433 billion in the third quarter of 2020 included lump-sum repayments of $1.177 billion.
In the third quarter of 2020, net cash flows used in investing activities of $644 million reflected an increase of $554 million from the third quarter of 2019, mainly due to movements between cash and short and long-term investments.
In the third quarter of 2020, net cash burn(1) of $818 million (or approximately $9 million per day, on average) was significantly better than management’s net cash burn expectations of between $1.35 billion and $1.6 billion (or between $15 million and $17 million per day, on average). This was due to a number of factors, including the deferral of certain capital expenditures, higher cash receipts related to the CEWS program, and additional working capital benefits resulting from both a deferral of supplier payments into future periods and from income and sales tax recoveries which had been forecast to occur in later periods.
Outlook and Major Assumptions
As indicated above, Air Canada plans to reduce its fourth quarter 2020 capacity by approximately 75 per cent from the same quarter in 2019. The airline will continue to dynamically adjust capacity and take other measures as required to account for health warnings, travel restrictions, quarantines, border closures globally and passenger demand.
Air Canada projects net cash burn of between $1.1 billion and $1.3 billion (or between $12 million and $14 million per day, on average) in the fourth quarter of 2020. This net cash burn projection includes $4 million per day in capital expenditures and $5 million per day in lease and debt service costs. When compared to the third quarter of 2020, the higher projected net cash burn in the fourth quarter of 2020 is due to a number of factors, including an increase in end-of-lease payments due to more aircraft being returned to lessors, stabilization of supplier payment deferrals affecting working capital, lower cash receipts related to the CEWS program, and a higher level of capital expenditures, in part due to additional scheduled Airbus A220 aircraft deliveries.
As discussed above, the Honourable Marc Garneau made public statements on November 8, 2020 related to aviation industry sector-specific support. Air Canada will provide an update when Government of Canada support arrangements have been finalized.
MONTREAL, Nov. 2, 2020 /CNW/ – The departure of Air Canada flight AC1810 from Toronto to Cancun today marked the return of Air Canada Rouge to the skies.
“Air Canada Rouge remains an important part of our overall strategy in rebuilding Air Canada’s global network. As leisure traffic resumes, we will progressively add Air Canada Rouge to select North American leisure markets from Eastern Canada,” said Mark Galardo, Vice President, Network Planning and Alliances at Air Canada.
Air Canada Rouge flights are operated with narrow-body Airbus aircraft featuring a choice of Premium Rouge and Economy services. Customers travelling in the Premium Rouge cabin will be offered a complimentary, pre-packaged meal curated by celebrated Montreal chef Antonio Park with complimentary bar and beverage service. All customers onboard Rouge flights will have access to complementary in-flight entertainment that is streamed right to their personal smartphone or device of choice without the requirement to download an app. Premium Rouge customers will also be offered the complimentary use of sanitized iPads containing entertainment content.
All flights are operated using the Air Canada CleanCare+ suite of biosafety measures. Customers can collect and redeem Aeroplan points through Canada’s leading loyalty program when travelling and eligible customers have access to priority check-in, Maple Leaf Lounges, priority boarding and other benefits.
More information about Air Canada Rouge flights can be found at: flyrouge.com
Air Canada CleanCare+, a leading biosafety program
Air Canada has been at the forefront of the airline industry in responding to COVID-19, including being among the first carriers globally to require customer face coverings onboard and the first airline in the Americas to take customers’ temperatures prior to boarding. It has introduced a comprehensive program, Air Canada CleanCare+, to apply industry leading biosafety measures at each stage of the journey. As well, to give customers flexibility, it has extended its goodwill policy so that new bookings made up to December 31, 2020 can be changed without fees for original travel up to December 31, 2021.
Aircraft are also equipped with HEPA air filtration, also used in hospital operating theatres, which are very effective at trapping microscopic particles as small as viruses and bacteria, as well as dust, pollen and moisture. Air in an aircraft cabin passes through the HEPA filter and is refreshed about 20-30 times per hour.
Science-based approach to advance biosafety measures
Air Canada has undertaken several medical collaborations to further advance a science-based approach across its business. The carrier most recently announced it is finalizing an initial order for Abbott’s newly approved COVID-19 rapid testing kits. Its medical collaborations include a partnership with McMaster HealthLabs and Greater Toronto Airport Authority to conduct a voluntary COVID-19 study of international travellers arriving at Toronto Pearson International Airport, with Cleveland Clinic Canada for medical advisory services, with Ottawa-based Spartan Bioscience to explore portable COVID-19 testing technology and, since 2019, with Toronto-based BlueDot for real-time infectious disease global monitoring.
Select Maple Leaf Lounges open with biosafety measures in place
Air Canada welcomes eligible customers again to three of its Maple Leaf Lounges: one each at its Toronto Pearson and its Vancouver hubs, and at Calgary International Airport. The Maple Leaf Lounge experience has been completely re-thought with a range of industry-leading biosafety measures in place for the safety of customers and employees alike. Electrostatic spraying in the Maple Leaf Lounges is part of significantly enhanced cleaning procedures for additional peace of mind, as well as launching new touchless processes, such as the ability to order pre-packaged food directly to your seat from your smartphone. Additional information is at: aircanada.com/serviceoffering.
Air Canada’s transformed Aeroplan loyalty program relaunches Nov. 8
Beginning November 8, 2020, current Aeroplan accounts will seamlessly transition to the transformed program, including existing Aeroplan membership numbers. Aeroplan miles will be known as “Aeroplan points,” and existing balances of miles will be honoured on a one-to-one basis. New features include every seat for sale on every Air Canada flight will be available for flight rewards with Aeroplan points and no cash surcharges, predictable pricing, all-new Aeroplan credit card benefits, additional partners, and redemption for travel extras such as upgrades.
VANCOUVER, British Columbia–(BUSINESS WIRE)–The union representing Air Canada flight attendants is deeply saddened to learn that the company will temporarily lay off approximately 3,600 of its members at Air Canada mainline, and all 1,549 of its members at Air Canada Rouge.
Earlier this week, the company announced it would significantly reduce flying capacity due to diminished demand and government-ordered border closures caused by the COVID-19 virus pandemic. The layoffs announced today are effective until April 30, 2020 at the earliest, but the union is hopeful that conditions in the industry improve and allow the airline to begin bringing flight attendants back on-board.
“This has been the most challenging time any of us will likely ever experience as flight attendants,” said Wesley Lesosky, President of the Air Canada Component of the Canadian Union of Public Employees (CUPE), which represents roughly 10,000 flight attendants at Air Canada and Air Canada Rouge. “Our members have been on the front lines of this crisis since day one, and it has been a tough journey ever since. Our hearts go out to all of our members, especially those who fell sick while doing their job.”
The union has confirmed that members being laid off – or facing “off-duty status” – will be able to collect Employment Insurance, and also access benefits. The union also pledged to assist laid-off members with their next steps, and to work diligently to bring them back once conditions in the industry stabilize.