Air Canada blames US$1.16 billion loss on Canadian Covid restrictions
CANADIAN flag carrier Air Canada reported an operating loss of C$1
CANADIAN flag carrier Air Canada reported an operating loss of C$1.55 billion (US$1.16 billion) in the second quarter year on year compared to an operating profit of C$422 million the year before. Meanwhile, first quarter revenues fell 89 per cent to C$527 million.
'Air Canada's second quarter results confirm the devastating and unprecedented effects of the Covid-19 pandemic and government-imposed travel and border restrictions and quarantine requirements,' said Air Canada president and CEO Calin Rovinescu.
'Canada's restrictions have been among the most severe in the world, effectively shutting down most commercial aviation in our country,' he said.
'Since mid-March, Air Canada has raised C$5.5 billion in new equity, debt and aircraft financings in the capital markets, providing us with over C$9 billion in liquidity as of June 30th to help weather the Covid-19 crisis.
'We have cut spending - including a major management and front-line workforce reduction, a C$1.3 billion reduction of our fixed costs and capital investments, the permanent retirement of 79 aircraft (30 per cent of the fleet), the indefinite suspension of certain domestic routes and station closures,' he said.
Air Canada reduced second quarter 2020 capacity by 92 per cent compared to the second quarter of 2019 and plans to reduce its third quarter 2020 capacity 80 per cent compared to the third quarter of 2019. .
In March 2020, Air Canada drew down its US$600 million and US$200 million revolving credit facilities for aggregate net proceeds of US$1.027 billion.
In April 2020, Air Canada concluded a 364-day term loan in the amount of US$600 million, secured by aircraft and spare engines, for net proceeds of US$829 million.
In April 2020, Air Canada concluded a bridge financing of $788 million for 18 Airbus A220 aircraft which Air Canada expects to replace with longer-term secured financing arrangements later in 2020. The longer-term financing is expected to be secured by the 18 Airbus A220 aircraft.