Tag Archives: Air Canada

News Releases Air Canada to make complimentary COVID-19 insurance coverage available to international travelers

Air Canada has made this announcement:

Air Canada today announced that it is including complimentary COVID-19 emergency medical & quarantine insurance for eligible customers booking round-trip international flights. The coverage, available for new bookings made in Canada from September 17 until October 31, 2020, inclusive, provides emergency medical and quarantine insurance designed to give customers added confidence when booking flights and travelling abroad.

“At Air Canada, we know people have personal, family and business reasons to travel. To give them greater confidence as they do so, we have engaged Manulife to offer all Canadian residents complimentary COVID-19 emergency medical & quarantine insurance when they book round-trip flights for travel outside of Canada. Combined with our industry leading airport and onboard biosafety protocols, including Air Canada CleanCare+, and our flexible rebooking policies, customers can be assured that when they book and travel with Air Canada their safety and well-being is our top priority,” said Lucie Guillemette, Executive Vice President and Chief Commercial Officer at Air Canada.

The Manulife COVID-19 Emergency Medical Certificate of Insurance (the “Plan”) is available for new international, round-trip bookings made in Canada between September 17 and October 31, 2020, inclusive, for travel completed by April 12, 2021. If, when abroad, customers test positive for COVID-19, the Plan will provide eligible customers coverage that includes:

  • Up to CDN $200,000 per insured for COVID-19 treatment medical expenses.
  • Up to CDN $150 per person for quarantine costs (meals + accommodation); Up to CDN $300 per family per day up to a maximum of 14 days.
  • Up to CDN $500 for expenses related to return home if the advisory from the Canadian government goes from Level 3 to Level 4 while at destination.

The Plan is available to all Canadian residents, subject to eligibility requirements, and is underwritten by The Manufacturers Life Insurance Company (“Manulife”), Canada’s largest provider of travel insurance. It is the most extensive geographical coverage included by a Canadian airline for Canadian residents, covering every international destination Air Canada serves. For full details, including applicable terms and conditions, please see: http://www.aircanada.com/covid-19-insurance.

Air Canada also recently announced that customers booking with Air Canada Vacations will be offered COVID-19 Coverage and Assistance Plan provided by Allianz at no additional cost designed to cover emergency medical and quarantine expenses if COVID-19 is contracted while travelling. It is available to all eligible customers who book an Air Canada Vacations package for travel by April 30, 2021 to eligible destinations. For details please see aircanadavacations.com.

Air Canada, WestJet, Greater Toronto Airports Authority, and Vancouver Airport Authority jointly comment on Transport Canada’s flight plan for navigating COVID-19

Canada’s two largest airlines and two largest airports today welcomed Transport Canada’s long-awaited Flight Plan for Navigating COVID-19 as a major step forward in restarting Canada’s air travel industry by confirming the country’s biosafety standards. The document is a clear endorsement of biosafety programs already put in place by Air Canada, WestJet, the Greater Toronto Airports Authority and the Vancouver Airport Authority.

Air Canada, WestJet, Greater Toronto Airports Authority, and Vancouver Airport Authority Jointly Comment on Transport Canada’s Flight Plan for Navigating COVID-19 (CNW Group/Air Canada)

Flight Plan contains international, proven best practices for proactively protecting air travellers at all stages of the journey and provides the framework for restarting the aviation sector in Canada. It encompasses such measures as health checks, face coverings, touchless technology and cleaning protocols, all of which are in effect at Air Canada, WestJet, Toronto Pearson and YVR. Moreover, it outlines potential future enhancements, many of which the organizations are already working to adopt.

“By aligning the Canadian aviation sector with best international practices for customer health and safety, the Government of Canada has now established the necessary science-based preconditions that assure customers of the highest levels of safety for air travel and for reopening Canadian aviation across provinces and to the world,” said Calin Rovinescu, President and Chief Executive of Air Canada. “Our Air Canada CleanCare+ program encompasses the measures recommended in Flight Plan and, as part of our evolving layered approach to biosafety, we remain committed to working with governments and other stakeholders to continue strengthening biosafety for all travellers. This is an important step to enabling business and the economy to safely restart alongside COVID-19, particularly the airline industry, which is a key economic driver.”

“Safety has always been above all at WestJet and we welcome the implementation of Flight Plan,” said Ed Sims, The WestJet Group President and CEO. “We remain committed to working with the Government of Canada to ensure all protocols are consistent with the best practices and advice available to us from around the world.”

Flight Plan represents the commitment of Canada’s aviation industry and Transport Canada to introduce innovative programs and policies that prioritize the health and well-being of airport workers and passengers in the face of the COVID-19 pandemic,” said Deborah Flint, President and CEO, Greater Toronto Airports Authority. “For our part, Toronto Pearson has worked collaboratively with public health officials, government and industry partners since the very beginning of the pandemic, culminating in the June launch of our Healthy Airport Commitment. From innovative solutions like a disinfection corridor, real-time air quality monitoring, UV light disinfection and autonomous floor cleaners to the fundamentals such as enhanced cleaning and the installation of hundreds of plexiglass barriers throughout the airport, passengers will see that health and safety is front and centre at Toronto Pearson and touches essentially every aspect of their journeys.”

“We applaud the work of Transport Canada’s Flight Plan and the biosafety standards set out to protect travellers at every step of the journey,” said Tamara Vrooman, President and CEO, Vancouver Airport Authority. “We’re pleased to see how this aligns with many programs already underway in our industry to ensure passenger health and safety in response to COVID-19. Similar to our partners across the Canadian aviation sector, we launched YVR TAKEcare, a multi-layered operational program and health and safety campaign, to create a safe and frictionless airport experience for airport employees and those who need to travel. YVR TAKEcare places industry-leading health, safety and cleaning practices and protocols at the forefront of airport processes and includes collaboration with many of our airport partners.”

The four entities will continue to work with the Government of Canada to ensure that the aviation transportation sector can safely advance and continue its critical role in the country’s economic recovery.

Air Canada loses $1.5 billion in the second quarter

Air Canada has issued this financial statement:

  • Total revenue decline of 89 percent over second quarter of 2019 due to COVID-19 and government-imposed travel restrictions; cargo revenue up in the quarter
  • Total passengers carried decline of 96 percent compared to the second quarter of 2019
  • Liquidity of $9.120 billion at June 30, 2020
  • Operating loss of $1.555 billion

Air Canada today reported unrestricted liquidity of $9.120 billion at June 30, 2020, in line with Air Canada’s expectations, compared to unrestricted liquidity of $7.380 billion at December 31, 2019. Total revenues fell from $4.738 billion in the second quarter of 2019 to $527 million in the second quarter this year, a decline of $4.211 billion or 89 per cent. Cargo revenue increased 52 per cent to $269 million.  The airline reported second quarter 2020 negative EBITDA(1) (excluding special items) or (earnings before interest, taxes, depreciation and amortization) of $832 million compared to second quarter 2019 EBITDA of $916 million.  Air Canada reported an operating loss of $1.555 billion in the second quarter of 2020 compared to operating income of $422 million in the second quarter of 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. 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. In the face of such an impossible operating environment, I am extremely proud of the outstanding efforts our team is making, doing everything possible to successfully navigate this crisis, leveraging our strong balance sheet and the many other assets we developed or acquired over the last decade,” said Calin Rovinescu, President and Chief Executive Officer of Air Canada.

“Since mid-March, we have raised $5.5 billion in new equity, debt and aircraft financings in the capital markets, providing us with over $9 billion in liquidity as of June 30th to help weather the COVID-19 crisis. 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 our 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. These were some of the painful but necessary steps we have taken to stabilize our airline and preserve cash in these uncertain times. We will now look to the future using this unprecedented challenge as an equally unprecedented opportunity to rebuild a smaller but even more nimble airline, with a simplified and younger fleet and a lower cost structure coming out of the crisis.

“Above all, today’s reported declines in revenue of nearly 90 per cent and in passengers of over 96 per cent, should reinforce the tremendous urgency for governments in Canada to take reasonable steps to safely reopen our country and restore economic activity. Other jurisdictions globally are showing it is possible to safely and responsibly manage the complementary priorities of public health, economic recovery and job preservation and creation. This is why Air Canada recently added its voice to that of many business and union leaders, including more than 140 major Canadian corporations and travel and tourism companies, employing nearly three million Canadians, in calling on the Government of Canada to take prudent steps to replace current blanket travel restrictions and quarantines with targeted evidence-based measures that reflect current circumstances.

“For our part, Air Canada is laser-focused on business continuity and in positioning ourselves to emerge competitively as the pandemic recedes. To promote customer safety and confidence, we introduced Air Canada CleanCare+, a comprehensive, multi-layered approach to biosafety at all phases of the journey. As well, we have slowly begun to rebuild our network, recalling a small number of employees and selectively restoring the award-winning services that have placed Air Canada among the world’s great airlines. For this I thank our employees for all of their incredible efforts and dedication and together we look forward to greeting our returning customers,” said Mr. Rovinescu.

Air Canada has taken or will take the following measures in response to the COVID-19 pandemic:

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 now 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. For more details on preventative measures and policies, please see:https://www.aircanada.com/covid19updates
  • To underscore its commitment to customer and employee safety, Air Canada introduced Air Canada CleanCare+. The new 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.
  • To assist with global requirements of goods and personal protective equipment during the pandemic, Air Canada operated more than 2,000 all-cargo international flights since March 22, 2020, and plans to operate up to 100 all-cargo flights per week in the third quarter using a combination of Boeing 787 and Boeing 777 aircraft as well as four recently converted Boeing 777 and three converted Airbus A330 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

  • 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 by approximately 80 per cent compared to the third quarter of 2019. This compares to a prior estimated reduction of 75 per cent, the larger reduction resulting from the continued extension of blanket travel restrictions in Canada. 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, border closures and passenger demand.
  • 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 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 $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.
  • In June 2020, Air Canada concluded an underwritten marketed public offering of 35,420,000 Class A variable voting shares and/or Class B voting shares of the company at a price to the public 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 (the “2024 Notes”), which were sold at 98 per cent of par. The 2024 Notes are secured obligations of Air Canada, secured on a second lien basis by certain real estate interests, ground service equipment, certain airport slots and gate leaseholds, and certain routes and the airport slots and gate leaseholds utilized in connection with those routes.
  • In June 2020, Air Canada completed a private offering of one tranche of Class C EETCs with a combined aggregate face amount of approximately US$315 million ($426 million), which were sold at 95.002 per cent of par. The Class C tranche ranks junior to the previously issued Series 2015-1, Series 2015-2, and Series 2017-1 EETCs, and is secured by liens on the 27 aircraft financed under the Series 2015-1, Series 2015-2, and Series 2017-1 EETCs. The Class C EETCs have an interest rate of 10.500 per cent per annum, and a final expected distribution date of July 15, 2026.
  • As a result of the above financing activities, unrestricted liquidity amounted to $9.120 billion and excess cash amounted to $6.820 billion as at June 30, 2020. Air Canada updated its definition of excess cash in the second quarter of 2020 to better reflect the current operating environment. Air Canada was previously using 20 per cent of trailing 12 months operating revenue as its estimate of the minimum cash required to support ongoing business operations. The minimum cash estimate has now been updated to a fixed amount of $2.4 billion. This minimum cash estimate considers Air Canada’s various financial covenants, provides adequate coverage for advance ticket sales, and supports Air Canada’s liquidity needs.
  • Air Canada’s unencumbered asset pool (excluding the value of Aeroplan and Air Canada Vacations) amounted to approximately $2.5 billion as at June 30, 2020. As part of Air Canada’s ongoing efforts to increase 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 as a result of COVID-19, which has now reached approximately $1.3 billion, increased from an initial target of $500 million. Excluding depreciation, amortization, and special items, second quarter 2020 operating expenses decreased $2.462 billion or 64 per cent from the same quarter in 2019. Air Canada continues to seek additional opportunities for 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. On July 17, 2020, the Government of Canada announced that the program would be redesigned and extended to December 2020. Air Canada intends to continue its participation in the CEWS program, subject to meeting the eligibility requirements.
  • Air Canada is 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.

Second Quarter Summary

Air Canada recorded a net loss of $1.752 billion or $6.44 per diluted share, compared to net income of $343 millionor $1.26 per diluted share in the second quarter of 2019.

At June 30, 2020, net debt of $4.564 billion increased $1.723 billion from December 31, 2019, reflecting the impact of net cash used for operating and investing activities in the first six months of 2020.  The unfavourable impact of a weaker Canadian dollar, as at June 30, 2020 compared to December 31, 2019, increased foreign currency denominated debt (mainly U.S. dollars) by $350 million.

In the second quarter of 2020, net cash flows used in operating activities of $1.251 billion deteriorated by $2.341 billion from the same quarter in 2019 on lower operating results and lower cash from working capital as a result of lower advance ticket sales, reflecting the severe impact of the COVID-19 pandemic.  In the second quarter of 2020, net cash inflows from financing activities amounted to $4.089 billion, an increase of $4.470 billion from the second quarter of 2019.

Net proceeds from debt and equity financings of $4.358 billion in the second quarter of 2020 reflected the impact of the financings discussed above.

Outlook and Major Assumptions

As indicated above, Air Canada plans to reduce its third quarter 2020 capacity by approximately 80 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, border closures globally and passenger demand.

Air Canada projects a net cash burn(1) of between $1.35 billion and $1.6 billion (or between $15 million and $17 million per day, on average) in the third 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.  This compares to a net cash burn of $1.724 billion (or approximately $19 million per day, on average) in the second quarter of 2020.  The projected improvement in net cash burn in the third quarter of 2020 reflects the significant measures taken to reduce cash burn (as discussed above) and a modestly improving demand environment, partially offset by higher capital expenditures, including aircraft deliveries.  The projected net cash burn for the third quarter of 2020 assumes that certain international borders will be reopened, that travel restrictions in a number of markets will be lifted and that passenger demand will continue to improve.

(1) Non-GAAP Measures

Below is a description of certain non-GAAP financial measures used by Air Canada to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for, or superior to, GAAP results.  Readers are advised to review the section entitled Non-GAAP Financial Measures in Air Canada’s Second Quarter 2020 MD&A for a further discussion of such non-GAAP measures and a reconciliation of such measures to Canadian GAAP.

  • EBITDA (earnings before interest, taxes, depreciation and amortization) is commonly used in the airline industry and is used by Air Canada as a means to view operating results before interest, taxes, depreciation and amortization as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. Air Canada excludes special items from EBITDA as these items may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
  • Net cash burn is commonly used in the airline industry and is used by Air Canada as a measure of cash used to maintain operations, support capital expenditures, and settle normal debt repayments, all before the net impact of new financing proceeds. Net cash burn is defined as net cash flows from operating, financing, and investing activities, and excludes proceeds from new financings, a lump sum debt maturity made in March 2020 of $255 million and any future lump sum debt maturities where the Corporation has refinanced or replaced the amount. Net cash burn also excludes movements between cash and short and long-term investments.

Air Canada aircraft photo gallery:

Air Canada aircraft slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=D9nVfQ&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

Air Canada proposes science-based approach to easing Quarantine Act restrictions

Air Canada has made this announcement:

Air Canada’s Chief Medical Officer has issued a letter urging the Canadian government to consider a science-based approach to easing the Quarantine Act restrictions, which have been essentially unchanged since March, to strike a better balance for travelers and for the Canadian economy without adversely impacting public health.

Air Canada is not proposing relaxing the U.S. border restrictions at this time – only to replace the quarantine requirements for those countries with a low COVID-19 risk from a public health perspective with more proportionate, evidence-based measures and experiences from other countries.

Air Canada notes that other G20 countries have implemented practical, evidence-based approaches to travel by minimizing the risk of COVID-19 exposure through a range of measures endorsed by medical professionals worldwide including:

  • Determination of safe corridors or travel between approved jurisdictions with fewer cases on the basis of low risk from a public health perspective (an approach adopted in the UK, France, Germany, Switzerland, Spain, Portugal among others)
  • Requirement for a pre-departure, medically certified negative COVID-19 test in order to enter the country (Caribbeanislands)
  • Waiver of quarantine requirements following a negative test on arrival (Iceland, Austria, Luxembourg)
  • Mandatory testing on arrival (South Korea, Hong Kong, Macao, United Arab Emirates)

A full copy of Air Canada’s letter signed by its Chief Medical Officer and providing a robust science-based approach for easing the 14-day quarantine is here.

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. In May it introduced a comprehensive program, Air Canada CleanCare+, to apply industry leading biosafety measures at each stage of the journey.

Air Canada has recently undertaken several medical collaborations to further advance biosafety across its business, including with Cleveland Clinic Canada for medical advisory services, 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.

US border closures with Canada and Mexico to be extended another month, officials say

COVID-19 cases North American map (John Hopkins University).

Air Canada aircraft photo gallery:

Air Canada aircraft slide show (new livery):

https://airlinersgallery.smugmug.com/frame/slideshow?key=D9nVfQ&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

Air Canada partners with Cleveland Clinic Canada

Air Canada has announced that Cleveland Clinic, a global healthcare leader, will provide medical advisory services as the airline further develops biosafety measures across its operations. Air Canada will have access to the local expertise of Cleveland Clinic Canada as well as clinical expertise from Cleveland Clinic’s worldwide enterprise system.

“As airline travel adapts to a new normal, we are taking another leadership role via our partnership with renowned Cleveland Clinic which enables Air Canada to leverage the strategic insight, advice, resources and recommendations of the world’s leading medical community to further develop protocols, guidelines and standards validated with science-based evidence in our ongoing COVID-19 response. We are committed in our ongoing strategy of continually developing multiple layers of measures for our customers and employees alike,” said Samuel Elfassy, Vice President, Safety at Air Canada.

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 face coverings onboard and the first airline in the Americas to take customers’ temperatures prior to boarding. In May it introduced a comprehensive program, Air Canada CleanCare+, to apply industry leading biosafety measures at each stage of the journey.

The Clinic’s Medical Director Program was initiated in Canada for domestic and global companies and is supported by management and clinical experts across the enterprise to provide strategic guidance on health and safety matters for customer safety.  As the Medical Advisor to Air Canada, Cleveland Clinic will provide access to leading expertise including guidance on:

  • Infectious exposure and toxicology
  • Pandemic and infrastructure response planning and prevention
  • Medical contingency plans and process development
  • Crisis and organizational risk management

“As the public begins to adjust to a world that’s been altered by the COVID-19 pandemic, health and safety is of the utmost importance,” said Michael Kessel, Cleveland Clinic Canada, CEO and President. “It is an honour to use our 99 years of clinical expertise to support Canadian organizations in a way that helps protect our communities.”

Air Canada’s partnership with Cleveland Clinic Canada is the latest of several medical collaborations it has undertaken in advancing biosafety across its business.

Air Canada aircraft photo gallery:

Air Canada aircraft slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=D9nVfQ&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

Air Canada to explore rapid COVID-19 testing with Spartan Bioscience

Air Canada is pleased to announce it has engaged Spartan Bioscience Inc., an Ottawa-based biotechnology leader in portable DNA testing technology, to assess how best to deploy Spartan’s portable COVID-19 testing technology in the aviation sector.

“Air Canada’s strategy for managing COVID-19 has been to develop and apply multiple layers of biosafety measures for customers and employees. We believe the availability of a rapid, accurate, portable molecular test for COVID-19 will add yet another effective layer. We are excited by the potential and point of care use cases for the Spartan Cube, and look forward to working with the Spartan team in the weeks and months ahead,” said Samuel Elfassy, Vice President, Safety at Air Canada.

Air Canada has been at the forefront of the airline industry in responding to COVID-19, for example being among the first carriers globally to require face coverings onboard and the first airline in the Americas to take customers’ temperatures prior to boarding. In May it introduced a comprehensive program, Air Canada CleanCare+, to apply biosafety measures at each stage of the journey. Air Canada has committed to adding other processes and technologies as they become available, which is why it is pleased to be working with Spartan Bioscience.

Spartan is developing a proprietary swab for the collection of DNA samples for its COVID-19 test. Spartan’s test cartridge (reagents) and the Spartan Cube (portable DNA analyzer device) remain subject to Health Canada approval.

“Spartan is excited to explore how our fast, portable testing technology can help keep Air Canada employees and the traveling public safe as Canada’s economy re-opens,” said Nick Noreau, Spartan Bioscience’s Chief Revenue Officer.

Video:

Air Canada aircraft photo gallery:

Air Canada aircraft slide show:

https://airlinersgallery.smugmug.com/frame/slideshow?key=D9nVfQ&speed=3&transition=fade&autoStart=1&captions=0&navigation=0&playButton=0&randomize=0&transitionSpeed=2

Air Canada discontinues service on 30 domestic regional routes and closes eight stations in Canada

Air Canada said today that it is indefinitely suspending service on 30 domestic regional routes and closing eight stations at regional airports in Canada. 

These structural changes to Air Canada’s domestic regional network are being made as a result of continuing weak demand for both business and leisure travel due to COVID-19 and provincial and federal government-imposed travel restrictions and border closures, which are diminishing prospects for a near-to-mid-term recovery.

As the company has previously reported, Air Canada expects the industry’s recovery will take a minimum of three years. As a consequence, other changes to its network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate.

A full list of route suspensions and station closures is below.

As a result of COVID-19, Air Canada reported a net loss of $1.05 billion in the first quarter of 2020, including a net cash-burn in March of $688 million. The carrier has undertaken a range of structural changes including significant cost savings and liquidity measures, of which today’s announced service suspensions form part. Other measures include:

  • A workforce reduction of approximately 20,000 employees, representing more than 50 per cent of its staff, achieved through layoffs, severances, early retirements and special leaves;
  • A company-wide Cost Reduction and Capital Deferral Program, that has to date identified around $1.1 billion in savings;
  • A reduction of its system-wide capacity by approximately 85 per cent in the second quarter compared to last year’s second quarter and an expected third quarter capacity reduction of at least 75% from the third quarter of 2019;
  • The permanent removal of 79 aircraft from its mainline and Rouge fleets;
  • And raising approximatively $5.5 billion in liquidity since March 13, 2020, through a series of debt, aircraft and equity financings.

Further initiatives are being considered.

Route Suspensions

The following routes will be suspended indefinitely as per applicable regulatory notice requirements. Affected customers will be contacted by Air Canada and offered options, including alternative routings where available.

Maritimes/Newfoundland and Labrador:

  • Deer Lake-Goose Bay;
  • Deer LakeSt. John’s;
  • FrederictonHalifax;
  • FrederictonOttawa;
  • MonctonHalifax;
  • Saint JohnHalifax;
  • CharlottetownHalifax;
  • MonctonOttawa;
  • Gander-Goose Bay;
  • GanderSt. John’s;
  • BathurstMontreal;
  • Wabush-Goose Bay;
  • WabushSept-Iles;
  • Goose Bay-St. John’s.

Quebec/Ontario:

  • Baie ComeauMontreal;
  • Baie Comeau-Mont Joli;
  • Gaspé-Iles de la Madeleine;
  • Gaspé-Quebec City;
  • Sept-Iles-Quebec City;
  • Val d’OrMontreal;
  • Mont JoliMontreal;
  • Rouyn-NorandaVal d’Or;
  • KingstonToronto;
  • LondonOttawa;
  • North BayToronto
  • WindsorMontreal

Western Canada:

  • ReginaWinnipeg;
  • ReginaSaskatoon;
  • ReginaOttawa;
  • SaskatoonOttawa.

Station Closures

The following are the Regional Airports where Air Canada is closing its stations:

  • Bathurst (New Brunswick)
  • Wabush (Newfoundland and Labrador)
  • Gaspé (Quebec)
  • Baie Comeau (Quebec)
  • Mont Joli (Quebec)
  • Val d’Or (Quebec)
  • Kingston (Ontario)
  • North Bay (Ontario)

Air Canada further refines industry-leading bio-safety measures, Re-introduces select services onboard flights

Air Canada has made this announcement:

Air Canada today announced it is advancing its industry-leading bio-safety measures by offering flexible rebooking options to Economy Class customers on flights that are close to capacity, introducing additional touchless processes at airports, and enhancing inflight service and amenities.

“As we rebuild our schedule, we are continually increasing the range of products and services available to safely and efficiently enhance our customers’ travel experience. As of July 1, we will be transparent about flights booked close to capacity in Economy Class and will provide rebooking options for customers booked on such flights.  In addition, we are introducing industry-leading, streamlined, touchless airport processes such as TouchFree Bag Check and virtual queuing, and will be resuming meals designed by our Canadian chef culinary panel. We continue to assess new bio-safety initiatives to further build on the multi-layered, bio-safety approach our best-in-class Air Canada CleanCare+ Program features to give customers confidence in a safe, secure, and enhanced travel experience with Air Canada,” said Andrew Yiu, Vice-President – Product at Air Canada.

Options for customers when Economy Class is booked close to capacity

Starting July 1, Air Canada will replace its policy of guaranteeing adjacent seats in Economy Class are empty with a new transparent process offering flexible rebooking options for customers. On flights where Economy Class is booked close to capacity, notification emails will be sent to Economy Class customers in advance of check-in and announcements will be made at the departure gate. Customers will have the option to change to another flight operating within three days or to the next available flight without additional fees.

Airports: Touchless services

Air Canada has implemented TouchFree Bag Check, an industry-leading process for all domestic flights from Toronto, Montreal, Vancouver and Calgary airports, and is now expanding this process to other select Canadian airports, as well as for customers departing on international flights. Watch a demonstration here.

Later in July, virtual queuing will also be introduced at primary Canadian airports to more efficiently manage wait times at select counters. Customers requiring service from an airport agent can simply scan their boarding card to enter a virtual queue and they will be notified via their smartphone to proceed to the counter for assistance.

Maple Leaf Lounges are expected to begin re-opening later this summer.

Air Canada is continuing to evaluate and assess additional touchless and new bio-safety initiatives in airports to further advance efficient, safe and secure travel.

On-board: Meals developed by Canadian panel of culinary talent to resume

Beginning late July, Air Canada will resume meal service planned by its panel of celebrated Canadian chefs in Air Canada Signature Class, and for the first time, will introduce chef-designed meals in Business Class – North America. Customers travelling on international flights in Economy Class will enjoy an enhanced meal service.

Limited inflight food options in Economy Class onboard North American flights greater than two hours will be re-introduced on a pre-order basis.

Customers will also be offered an expanded selection of alcoholic and non-alcoholic drinks adapted by cabin and route.

In addition to Air Canada CleanCare+ customer care kits containing hand sanitizer, a mask, antibacterial wipes, hand sanitizer, gloves, water bottle, headphones and a snack, additional antibacterial wipes will be available as part of each meal service and in lavatories.  Pillows and blankets will be offered again on all international flights and presented to customers wrapped and sealed.

Air Canada shows off its first refurbished Airbus A330 cabin

Air Canada made this announcement on social media:

We’re celebrating new firsts! Like AC311 from Montreal to Vancouver, the first flight operated with our newly retrofitted Airbus A330 now featuring our newly reconfigured cabin design.

Air Canada completes financing transactions raising additional $1.23 billion

Air Canada made this announcement:

Air Canada has announced that it recently closed two additional financing transactions for net proceeds of $1.23 billion. Since the start of the COVID-19 pandemic in the first quarter of 2020, Air Canada has raised $5.5 billion of liquidity. 

On June 22, 2020, Air Canada completed a private offering of $840 million aggregate principal amount of 9.00% Second Lien Secured Notes due 2024 (the “2024 Notes”), which were sold at 98% of par. The 2024 Notes are secured obligations of Air Canada, secured on a second lien basis by certain real estate interests, ground service equipment, certain airport slots and gate leaseholds, and certain routes and the airport slots and gate leaseholds utilized in connection with those routes.

Earlier in June, Air Canada completed a private offering of one tranche of Class C EETCs with a combined aggregate face amount of approximately US$315 million, which were sold at 95.002% of par. The Class C tranche ranks junior to the previously issued Series 2015-1, Series 2015-2, and Series 2017-1 EETCs, and is secured by liens on the 27 aircraft financed under the Series 2015-1, Series 2015-2, and Series 2017-1 EETCs. The Class C EETCs have an interest rate of 10.500% per annum, and a final expected distribution date of July 15, 2026.

“The fact Air Canada was able to add $1.23 billion to its liquidity with these last two transactions without utilizing any of its previously disclosed unencumbered assets leaves the airline in an excellent position to access additional funds should the need arise. Complementing these efforts have been ongoing initiatives to reduce cash burn through such measures as workforce reductions, a $1.1 billion Cost Transformation Program and capacity and network rationalization,” said Pierre Houle, Managing Director and Treasurer of Air Canada.

In addition to these more recent financings, Air Canada also concluded the following financing transactions in 2020:

  • In March 2020, Air Canada drew down its US$600 million and $200 million revolving credit facilities for aggregate proceeds of $1.03 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 proceeds of $829 million.
  • In late 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.
  • In June 2020, Air Canada concluded an underwritten marketed public offering of 35,420,000 Class A Variable Voting Shares and/or Class B Voting Shares of the Company at a price to the public of $16.25 per share, for aggregate proceeds of $575.6 million, and a concurrent marketed private placement of convertible senior unsecured notes due 2025 for aggregate proceeds of US$747.5 million($1.01 billion).

“We entered 2020 on the doorstep of investment grade with a very strong balance sheet, low net leverage and significant liquidity, before the COVID-19 pandemic and government-imposed quarantines and border restrictions destroyed demand and depleted cash. Air Canada’s strong relative position has allowed us to navigate through this crisis and we have full confidence that we will be successful in maintaining liquidity at levels more than sufficient to meet the challenges and take advantage of the opportunities ahead. With these latest transactions Air Canada has now raised approximately $5.5 billion in 2020 and expects to end the second quarter of 2020 with at least $9 billion in liquidity,” concluded Mr. Houle.

Air Canada is utilizing the net proceeds from these transactions to supplement its working capital and for other general corporate purposes. The net proceeds from the financings will serve to increase Air Canada’s cash position, thereby allowing for additional flexibility both from an operational standpoint and in the implementation of its planned mitigation and recovery measures in response to the COVID-19 pandemic.

Air Canada’s unencumbered asset pool (excluding the value of Aeroplan and Air Canada Vacations) amounts to approximately $2.5 billion at current exchange rates. Air Canada will continue to explore financing arrangements should additional liquidity be required or to refinance existing debt to push out maturities.

Air Canada aircraft photo gallery: