August 4, 2020 By Wings Staff
Air Canada on July 31 reported its 2020 second quarter results, ended June 30, with a revenue decline of 89 per cent when compared to the corresponding quarter of 2019. Total revenues fell from approximately $4.7 billion in 2019 Q2 to $527 million in the 2020 Q2, a decline of $4.2 billion, with the airline pointing to the effects of COVID-19 and government-imposed travel restrictions.
Air Canada reported an operating loss of $1.6 billion in the second quarter of 2020 compared to operating income of $422 million in the second quarter of 2019.
Air Canada’s Cargo revenue increased 52 per cent to $269 million when comparing this year’s second quarter to the same period in 2019. The airline also had unrestricted liquidity of $9.1 billion at June 30, 2020, in line with its expectations, compared to unrestricted liquidity of $7.4 billion at December 31, 2019.
“As with many other major airlines worldwide, 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 Calin Rovinescu, president and CEO, Air Canada. “Canada’s federal and inter-provincial restrictions have been among the most severe in the world, effectively shutting down most commercial aviation in our country, which, together with otherwise fragile demand, resulted in Air Canada carrying less than four per cent of the passengers carried during last year’s second quarter.”
Rovinescu continued to explain that since mid-March, Air Canada has raised $5.5 billion in new equity, debt and aircraft financings in the capital markets, resulting in the airline holding the more than $9 billion in liquidity mentioned above — to fight the economic impact of COVID-19.
“In addition, we have taken decisive action to cut spending and preserve liquidity, including a major management and front-line workforce reduction, a $1.3 billion reduction of our fixed costs and capital investments, the permanent retirement of 79 aircraft [representing more than 30 per cent of Air Canada’s combined mainline and Air Canada Rouge fleet], the indefinite suspension of certain domestic routes and station closures, and a reduction in our network seat capacity of 92 per cent in the quarter,” stated Rovinescu, who also points to a passenger decline of nearly 96 per cent when comparing 2020 Q2 to 2019 Q2.