Air Canada earnings take huge fall with revenue down $4.2 billion
Air Canada earnings plunged $1.7 billion in the second quarter as the coronavirus pandemic rages on.
This time last year, the company was working with an income of $422 million.
COVID-19 travel bans and border closures forced the Montreal-based air travel company to ground planes, lay off thousands of employees and reduce traveler capacity by 92 per cent.
On Friday morning, Air Canada announced a drop from $4.7 billion last year to $527 million in the same three-month period, ending June 30, this year, an astonishing total drop of 89 per cent.
“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,” Air Canada CEO Calin Rovinescu said in a statement, calling Canadian travel restrictions "among the most severe in the world."
“Economies have to open up, people have to work, trade has to resume,” said the WHO "Continuing to keep international borders sealed is not necessarily a sustainable strategy for the world's economy, for the world's poor, or for anybody else." https://t.co/YZQ7iDd3R6— Air Canada (@AirCanada) July 28, 2020
The restrictions resulted in the company carrying fewer than four per cent of the passengers it carried at the same time last year.
In response to the dire economic situation caused by the pandemic, Air Canada laid off around 20,000 of the company's 38,000 workers in June, the CBC reported in May.
This, the company said, saved them $1.3 billion. They also retired 79 aircraft, which made up 30 per cent of its overall fleet and suspended some domestic routes.
Effective April 26, Air Canada suspended all flights to the U.S. The border remains closed except for essential travel.
On Monday, the company said the cases of transmission on aircraft "are very rare" because of cabin airflow.
"Various government bodies have confirmed the risk of onboard transmission is exceedingly low," their statement reads, "which accords with scientific studies on communicable diseases and air travel."
Earlier this month, at least 15 flights in and out of Toronto, most operated by Air Canada, reported confirmed cases of COVID-19 on board, proving that perhaps travel bans — while harmful to the economy — are necessary for public safety.
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