Tag Archives: Air Canada

Air Canada to add more flights to Hawaii this winter

Air Canada Boeing 787-8 Dreamliner C-GHPQ (msn 35257) ZRH (Andi Hiltl). Image: 947454.

Air Canada will launch more nonstop options from Canada to Hawaii this winter, including the first MontrealHonolulu and TorontoMaui services. These new flights complement the airline’s long-standing services from Calgary and Vancouver to the Hawaiian Islands and will enable convenient connections across Canada as well as from Europe.

“We are seeing strong demand in the sun markets this winter with people in Canada and around the world looking ahead to holiday travel. As we finalize our schedule to position Air Canada’s leadership in leisure travel this winter, we have added new non-stop flights to Hawaii from Montreal and Toronto in addition to our flights from Calgary and Vancouver, making it more convenient than ever for Canadians across the country to experience the Hawaiian Islands. From Europe, customers will be able to easily connect to our Hawaii flights from our Montreal and Toronto gateways. We know people will be excited to travel this winter, and we look forward to welcoming our customers onboard,” said Mark Galardo, Senior Vice President, Network Planning and Revenue Management at Air Canada.

Air Canada’s new Hawaii flights from Montreal and Toronto feature a choice of three cabins of service, including the airline’s premium travel experiences and Air Canada Signature Class featuring lie-flat Executive Pods.  Seats are available for sale now for next winter.  Air Canada’s new refund policy of offering customers options of refunds, an Air Canada Travel Voucher or equivalent value in Aeroplan Points with a 65% bonus should the airline cancel or reschedule a flight by more than three hours, is applicable to all tickets purchased.

Montreal to Honolulu Schedule:

  • Connects to/from BrusselsFrankfurt, intra-Quebec and Atlantic Canada

 

Flight

Route

Departure Time

Arrival Time

Aircraft

Day of Operation

Begins

AC521

Montreal (YUL) to
Honolulu (HNL)

13:30

19:54

Boeing 787 Dreamliner

Wed, Sun

Dec. 12, 2021

AC520

Honolulu (HNL) to
Montreal (YUL)

21:30

12:02 (+1 day)

Boeing 787 Dreamliner

Wed, Sun

Dec. 12, 2021

Toronto to Hawaii Schedule:

  • Connects to/from London Heathrow, FrankfurtViennaAtlantic Canada, intra-Ontario and Manitoba

 

Flight

Route

Departure Time

Arrival Time

Aircraft

Day of Operation

Begins

AC531

Toronto (YYZ) to
Maui (OGG)

17:10

22:14

Boeing 787 Dreamliner

Sat

Dec. 18, 2021

AC530

Maui (OGG) to
Toronto (YYZ)

23.55

13:27

Boeing 787 Dreamliner

Sat

Dec. 18, 2021

AC589

Toronto (YYZ) to
Honolulu (HNL)

17:05

21:15

Boeing 787 Dreamliner

Mon, Fri, Sun

Dec. 17, 2021

AC590

Honolulu (HNL) to
Toronto (YYZ)

22:55

13:37 (+1 day)

Boeing 787 Dreamliner

Mon, Fri, Sun

Dec. 17, 2021

Calgary to Hawaii schedule

  • Connects to/from AlbertaSaskatchewanManitoba, and other Canadian markets

 

Flight

Route

Departure Time

Arrival Time

Aircraft

Day of Operation

Begins

AC529

Calgary (YYC) to
Honolulu (HNL)

14:50

19:20

Boeing 737

Tue, Thur, Sat

Dec. 18, 2021

AC528

Honolulu (HNL) to
Calgary (YYC)

22:45

08:20 (+1 day)

Boeing 737

Tue, Thur, Sat

Dec. 18, 2021

AC587

Calgary (YYC) to
Maui (OGG)

14:50

19:06

Boeing 737

Mon, Wed, Fri, Sun

Dec. 17, 2021

AC588

Maui (OGG) to
Calgary (YYC)

21:45

08:17 (+1 day)

Boeing 737

Mon, Wed, Fri, Sun

Dec. 17, 2021

Vancouver to Hawaii schedule

  • Connects seamlessly to/from BC and other Canadian markets

 

Flight

Route

Departure Time

Arrival Time

Aircraft

Day of Operation

Begins

AC519

Vancouver (YVR)
to Honolulu (HNL)

14:05 -will vary
in peak winter

17:30 -will vary
in peak winter

Boeing 787 Dreamliner
in peak winter

Up to daily in
peak winter

Sept. 14, 2021

AC518

Honolulu (HNL)
to Vancouver (YVR)

21:55 -will vary
in peak winter

06:55 (+1 day) -will vary
in peak winter

Boeing 787 Dreamliner
in peak winter

Up to daily in
peak winter

Sept. 14, 2021

AC537

Vancouver (YVR)
to Maui (OGG)

18:00 -will vary
in peak winter

21:03 -will vary
in peak winter

Boeing 787 Dreamliner
in peak winter

Up to daily in
peak winter

Sept. 10, 2021

AC536

Maui (OGG)
to Vancouver (YVR)

22 :40 -will vary
in peak winter

07:00 (+1 day) – will vary
in peak winter

Boeing 787 Dreamliner
in peak winter

Up to daily in
peak winter

Sept. 10, 2021

AC545

Vancouver (YVR)
to Kona (KOA)

16:50

20:18

Boeing 737

Thur, Fri, Sun

Dec. 19, 2021

AC544

Kona (KOA)
to Vancouver (YVR)

21:35

06:38 (+1 day)

Boeing 737

Thur, Fri, Sun

Dec. 19, 2021

Top Copyright Photo: Air Canada Boeing 787-8 Dreamliner C-GHPQ (msn 35257) ZRH (Andi Hiltl). Image: 947454.

Air Canada aircraft slide show:

Air Canada posts a EBITDA loss of $763 million in the first quarter

Air Canada Airbus A220-300 (CS300 BD-500-1A11) C-GMZY (msn 55102) YYZ (TMK Photography). Image: 952987.

Air Canada today reported first quarter 2021 financial results:

 

  • Operating revenues of $729 million, a decline of $2.993 billion or 80 per cent from the first quarter of 2020.
  • Negative EBITDA (1) (earnings before interest, taxes, depreciation and amortization), excluding special items, of $763 million compared to EBITDA of $71 million in the same quarter of 2020.
  • Operating loss of $1.049 billion compared to an operating loss of $433 million in the first quarter of 2020.
  • Net cash burn of $1.274 billion, or approximately $14 million per day, on average.
  • Unrestricted liquidity amounted to $6.582 billion at March 31, 2021.

“The persistence of COVID-19 and its resurgence in Canada are weighing heavily on the Canadian airline industry, as reflected in Air Canada’s first quarter results. Still, through the hard work and dedication of our employees, we are operating a limited schedule for necessary travel and to ship essential cargo. I thank our employees for their professionalism and assure them, as well as our investors and all stakeholders, that better times lie ahead for our airline,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“During the quarter, Air Canada’s cash burn rate progressively improved, albeit moderately given the ongoing impact of the pandemic on advance ticket sales. Air Canada had almost $6.6 billion in liquidity at the quarter’s end and we subsequently finalized a financial package with the Government of Canada (primarily comprised of repayable loans) to provide access of up to $5.9 billion more in liquidity. Beyond serving as a layer of insurance, this makes available, if required, the resources necessary to rebuild and compete in the post-pandemic world.

“We continue to pursue other revenue opportunities. Air Canada Cargo has now completed more than 7,500 all-cargo flights since March of last year. We are building our transformed Aeroplan program, establishing a well-received partnership with Starbucks in Canada. We also maintained our focus on customers and employees, becoming the first carrier in Canada to be awarded APEX’s Diamond Status for our COVID-19 Air Canada CleanCare+ biosafety program and we were named one of Montreal’s Top Employers for the eighth time and one of Canada’s Best Diversity Employers for the sixth consecutive year. Continuing on our commitment to sustainability, we now aim to achieve net-zero emissions by 2050.  To reach this, we have set absolute midterm GHG net reduction targets by 2030 in our air and ground operations compared to our 2019 baseline, and have committed to investing $50 Million in Sustainable Aviation Fuel, and carbon reductions and removals,” said Mr. Rousseau.

“With these and other measures, Air Canada is poised to emerge strongly from the pandemic. It is now essential that governments communicate and implement a reopening plan for our country; recognizing that a healthy aviation sector is vital to Canada’s economic recovery. Starting with replacing blanket restrictions with science-based testing and limited quarantine measures where appropriate, Canada can reopen and safely ease travel restrictions as vaccination programs roll out. We have seen elsewhere, notably in the U.S., that travel rebounds sharply as COVID-19 recedes and restrictions are lifted, and we fully expect this can be replicated in Canada,” concluded Mr. Rousseau.

In 2020, Air Canada implemented a COVID-19 Mitigation and Recovery Plan in response to the negative impacts of the COVID-19 pandemic on its earnings and cash from operations. The measures taken in 2020 are described in the “Strategy and COVID-19 Mitigation and Recovery Plan” section of Air Canada’s 2020 MD&A. In 2021, to date, Air Canada has taken the following additional measures:

Customer Service and Safety

Since March 2020, Air Canada has refunded more than $1.2 billion to customers holding refundable tickets. In April 2021, Air Canada started offering eligible customers who purchased non-refundable tickets for travel on or after February 1, 2020 but did not fly, the option to obtain a refund to the original form of payment. Such customer refunds will be neutral to Air Canada’s liquidity position and will improve its net working capital with proceeds drawn under the refunds credit facility from the Government of Canada. Additional details on the refunds credit facility are provided in the “Recent Developments” section of Air Canada’s First Quarter 2021 MD&A.

In January 2021, Air Canada received the Diamond Certification from the Airline Passenger Experience Association (APEX) Health Safety powered by SimpliFlying. The Diamond Certification recognized the airline for achieving hospital-grade levels of biosecurity across multiple passenger touchpoints. The certification program aims to create a global standard for health and safety measures focused on airline customers.

In March 2021, Air Canada announced several updates for Aeroplan Elite Status members, ensuring their status remains in effect, to give them flexibility and certainty. The changes include the extension of current Elite Status until the end of 2022, in addition to a previous extension through 2021, as well as the possibility to accelerate their status qualification, which will also help contribute to status qualification for 2022 and beyond.

In March 2021, Aeroplan announced its partnership with Starbucks which allows Aeroplan members to earn Aeroplan points at participating Starbucks locations across Canada. In 2021, Aeroplan intends to introduce additional program features, while expanding its partnership network in various categories, to further grow and engage its membership base.

Capacity and Route Network

In the first quarter of 2021, as a result of the continued impact of the COVID-19 pandemic, Air Canada reduced its ASM capacity by 82 per cent compared to the first quarter of 2020 (or a reduction of 84 per cent when compared to the first quarter of 2019). Air Canada plans to approximately double its second quarter 2021 ASM capacity from the same quarter in 2020.  When compared to the same period in 2019, second quarter 2021 ASM capacity is expected to decrease 84 per cent.

On March 1, 2021, Air Canada consolidated its regional flying with Jazz Aviation LP (Jazz). Through the amended CPA, which is effective on a retroactive basis to January 1, 2021, Jazz has become the sole operator of flights under the Air Canada Express banner. As further explained in the news release dated March 1, 2021, Air Canada transferred the operations of its Embraer 175 aircraft to Jazz and expects to realize $400 million in cost reductions over the term of the 15-year amended capacity purchase agreement.

Since March 2020, Air Canada has operated more than 7,500 all-cargo flights using its wide-body passenger aircraft as well as certain temporarily modified Boeing 777 and Airbus A330 aircraft, which have additional available cargo space due to the removal of seats from the passenger cabin. In the first quarter of 2021, a total of 2,362 all-cargo flights were operated.

Financing and Liquidity

Since the start of 2021, Air Canada concluded the following transactions:

  • On April 12, 2021, Air Canada entered into a series of debt and equity financing agreements with the Government of Canada (acting through its subsidiary, Canada Enterprise Emergency Funding Corporation) which allows Air Canada to access up to $5.879 billion in liquidity through the Large Employer Emergency Financing Facility (LEEFF) program. The financial package provides for fully repayable loans that Air Canada would draw down if and as required. The package also includes an equity investment for gross proceeds of $500 million for Air Canada shares at a price of $23.1793 per share, as well as an aggregate of 14,576,564 warrants exercisable for the purchase of an equal number of Air Canada shares, subject to customary adjustments, at a price of $27.2698 per share during a 10-year term; 50 per cent of the warrants vested concurrently with the implementation of the credit facilities and the remaining 50 per cent of the warrants will vest on a proportional basis to the amounts that Air Canada may draw under the unsecured credit facilities (excluding the refunds credit facility). Additional details on the agreements are provided in the “Recent Developments” section of Air Canada’s First Quarter 2021 MD&A.
  • In March 2021, Air Canada concluded a committed secured facility totaling US$475 million to finance the purchase of the next 15 Airbus A220 aircraft scheduled for delivery in 2021 and 2022.
  • In connection with Air Canada’s December 2020 share offering, in January 2021, the underwriters partially exercised their over-allotment option to purchase an additional 2,587,000 Air Canada shares for net proceeds of $60 million.
  • In the first quarter of 2021, Air Canada extended its US$600 million and $200 million revolving credit facilities by one year, to April 2024 and to December 2023, respectively.

As part of Air Canada’s ongoing efforts to maintain adequate liquidity levels, additional financing arrangements continue to be assessed and may be pursued.

First Quarter Summary

Air Canada recorded a net loss of $1.304 billion or $3.90 per diluted share in the first quarter of 2021 compared to a net loss of $1.049 billion or $4.00 per diluted share in the first quarter of 2020.

In the first quarter of 2021, on a capacity reduction of 82 per cent, operating expenses of $1.778 billion decreased $2.377 billion or 57 per cent from the same quarter in 2020.

In the first quarter of 2021, net cash flows used in operating activities of $888 million deteriorated by $868 million from the same quarter in 2020 on lower operating results, reflecting the continued impacts of the COVID-19 pandemic and related travel restrictions.

In the first quarter of 2021, net cash burn of $1.274 billion, or approximately $14 million per day, on average, was lower than management’s expectations of between $15 to $17 million per day, on average, discussed in Air Canada’s February 12, 2021 news release. Air Canada’s net cash burn in the first quarter of 2021 included $2 million per day in net capital expenditures and $4 million per day in lease and debt service costs. The lower net cash burn versus what was previously anticipated was attributable to a combination of higher than anticipated operating earnings, favourable timing on working capital, and deferred settlement of aircraft lease returns.

Outlook

As indicated above, Air Canada plans to approximately double its second quarter 2021 ASM capacity from the same quarter in 2020.  In the second quarter of 2021, when compared to the same period in 2019, ASM capacity is expected to decrease 84 per cent. 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 of between $1.180 billion and $1.370 billion (or between $13 million and $15 million per day, on average) in the second quarter of 2021. This net cash burn projection includes $2 million per day in capital expenditures, net of financing, and $5 million per day in lease and debt service costs. When compared to the first quarter of 2021, the second quarter of 2021 includes approximately $1 million per day in higher scheduled debt principal repayments, an increase in end-of-lease payments due to more aircraft being returned to lessors and reflects the continuing impact of the pandemic on travel demand. The net cash burn projection excludes the amount of expected eligible refunds of non-refundable fares being processed pursuant to the change in refund policy announced on April 12, 2021 for flights impacted by the COVID-19 pandemic. Such refunds will be eligible for draws under the Government of Canada $1.404 billion refunds credit facility. As such, these refunds will generally be cash neutral to Air Canada’s liquidity position, up to the $1.404 billion limit of the facility. Air Canada estimates that the maximum exposure to cash refunds for all eligible customers holding non-refundable tickets is approximately $2 billion. It is difficult to predict the number of customers who will request a cash refund for non-refundable tickets but based on past experience and current observations since the change in refund policy on April 12, 2021, Air Canada expects cash refunds relating to the change in policy on April 12, 2021 to be substantially less than $2 billion as certain customers will choose to retain their travel voucher.

(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 First Quarter 2021 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. Refer to the Non-GAAP Financial Measures section in Air Canada’s First Quarter 2021 MD&A for a discussion of special items relating to the first quarter of 2021.

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 for aircraft deliveries, and investing activities. Excluded are proceeds from non-aircraft financings, lump sum debt maturities made where Air Canada has refinanced or replaced the amount, and proceeds from sale and leaseback transactions. Net cash burn also excludes movements between cash and short and long-term investments.

Top Copyright Photo: Air Canada Airbus A220-300 (CS300 BD-500-1A11) C-GMZY (msn 55102) YYZ (TMK Photography). Image: 952987.

Air Canada aircraft slide show:

Air Canada highlights its pandemic health and safety initiatives for employees

Air Canada is marking North American Occupational Safety and Health Week (NAOSH) by highlighting the range of health and safety initiatives it has implemented to protect employees during the COVID-19 pandemic.

The airline’s leadership position in using technology has enabled it to share its experience and knowledge to mentor other Canadian companies in scaling up similar initiatives.  This includes the use of rapid antigen testing in the workplace, developed via Canada’s Creative Destructive Lab (CDL), as an important tool in applying a layered approach to employee health and safety.

“The safety of our employees is paramount at Air Canada, and working with our Chief Medical Officer Dr. Jim Chung, Air Canada has been able to pull together workplace screening initiatives with our partner Creative Destruction Lab which has enabled Air Canada to be in a leadership position. With the unpredictable trajectory of COVID-19, it was critical over the past year to develop and use science-based tools as part of a multi-layered approach to keeping our people safe at work. Employees told us they found the voluntary rapid antigen employee screening we developed through CDL gave them additional confidence knowing there was another protective layer in the workplace. What we learned in the process has been shared with other organizations looking to adopt similar approaches for their own workplaces,” said Samuel Elfassy, Vice President, Safety at Air Canada.

Janice Stein, a professor at the University of Toronto and a Member of the CDL Steering Committee, stated, “Air Canada has played a leading role in the CDL Rapid Screening Consortium in Canada. It was among the first to join. It led critical work teams, it pioneered one advance after another in the application of rapid screening.”

Canadian Blood Services is one of the companies that Air Canada helped in scaling its workplace rapid screening for employees across the country. Laura Todd, Manager, Strategic Planning and Business Integration said, “The team at Air Canada shared technology that made it easier for us to implement in our environment. The program provides an extra layer of safety that will help ensure we can continue to provide life-saving products and services to Canadian patients.”

Air Canada has implemented workplace COVID-19 safety protocols during the pandemic using a phased approach that begins prior to employees leaving home for work. These initiatives include:

Prior to going to the workplace. Since the beginning of the pandemic, Air Canada has required all employees to conduct a self-wellness assessment from home prior to leaving for the workplace. An online-tool has been developed for the self-wellness assessment which has now been deployed to various work teams, with further roll-out planned.

Upon entering the workplace. As a member of the CDL’s Rapid Screening Consortium, Air Canada has implemented voluntary rapid antigen screening in 12 locations across 16 work groups and is scaling this testing across other locations as provincial health authorities approve their use.

In the workplace. Air Canada has piloted Tracescan Wearables at its 24-hour system operations control centre, which vibrate when employees are less than six feet apart for more than ten minutes and utilize Bluetooth technology to facilitate objective contact tracing if required. Tracescan Wearables are planned to be further deployed to other work locations.

Vaccination clinics in Montreal for employees.  Air Canada is working with partners Bombardier, Aéroports de Montréal (ADM) and Biron Groupe Santé to host upcoming Montreal vaccination clinics for eligible employees and their immediate family members. Clinics opening on May 6 and May 13.

Vaccination clinics in Toronto for employees to open soon.  Air Canada is partnering with the Ontario government and Region of Peel to open a clinic facilitating vaccinations later this month for eligible employees and Peel Region residents including immediate family members.

The airline is recalling some furloughed employees for non-medical employment opportunities at the Montreal and Toronto vaccination clinics. Air Canada continues to approach other provincial governments for similar opportunities.

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, proactively provision its crew with PPE, and the first airline in the Americas to check passengers’ temperatures prior to boarding.  The airline has provisions for sick leave.

The airline partnered with McMaster HealthLabs (MHL), the Greater Toronto Airports Authority and the Government of Canada for a study which has demonstrated the feasibility of airport-based testing to help reduce the length of the required quarantine period.

Air Canada also undertook several medical collaborations to further advance biosafety across its business, including with Cleveland Clinic Canada for medical advisory services and, since 2019, with Toronto-based BlueDot for real-time infectious disease global monitoring. It continues to explore other potential partnerships with technology and medical companies to further strengthen its biosafety protocols.

Video:


<p><a href=”https://vimeo.com/543778735″>Employee COVID Screening: Air Canada Leading The Way</a> from <a href=”https://vimeo.com/aircanadamedia”>Air Canada</a> on <a href=”https://vimeo.com”>Vimeo</a&gt;.</p>

Air Canada to extend its sun destinations ban until the end of May

Air Canada Boeing 737-8 MAX 8 C-FSNQ (msn 61222) YYZ (TMK Photography). Image: 953407.

Air Canada has extended the ban on sun destination passenger flights to the Caribbean and Mexico from April 30 to May 31 due to COVID-19.

The carrier is operating some critical cargo-only flights to the region.

This announcement follows WestJet which is suspending similar flights until June 4.

Top Copyright Photo: Air Canada Boeing 737-8 MAX 8 C-FSNQ (msn 61222) YYZ (TMK Photography). Image: 953407.

Air Canada aircraft slide show:

Air Canada and Government of Canada conclude agreements on liquidity program

Air Canada has announced that it has entered into a series of debt and equity financing agreements with the Government of Canada, which will allow Air Canada to access up to $5.879 billion in liquidity through the Large Employer Emergency Financing Facility (LEEFF) program.

“Air Canada entered the pandemic more than a year ago with one of the global airline industry’s strongest balance sheets relative to its size. We have since raised an additional $6.8 billion in liquidity from our own resources to sustain us through the pandemic, as air traffic ground to a virtual halt in Canada and internationally,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

“The additional liquidity program we are announcing today achieves several aligned objectives as it provides a significant layer of insurance for Air Canada, it enables us to better resolve customer refunds of non-refundable tickets, maintain our workforce and re-enter regional markets. Most importantly, this program provides additional liquidity, if required, to rebuild our business to the benefit of all stakeholders and to remain a significant contributor to the Canadian economy through its recovery and for the long term.

“As vaccine deployments ramp up, we continue to work with the Government of Canada on the evolution of safe and science-based test and quarantine relief measures with a view to safely restarting our sector. We know that Canadians are looking forward to re-connecting with friends and family and taking those long-awaited vacations and business trips and we will be ready to safely connect Canadians within Canada and Canada to the world,” said Mr. Rousseau.

The financial package provides for fully repayable loans that Air Canada would only draw down as required, as well as an equity investment, and is comprised of:

  • Gross proceeds of $500 million for Air Canada shares at a price of $23.1793 per share;
  • $1.5 billion in the form of a secured revolving credit facility at a 1.5% premium to the Canadian Dollar Offered Rate (CDOR); the facility is secured on a first lien basis by the assets of Aeroplan Inc., Air Canada’s shares in Aeroplan as well as certain assets of Air Canada, including certain intellectual property relating to the Aeroplan loyalty program;
  • $2.475 billion in the form of three unsecured non-revolving credit facilities of $825 million each with: the first, five-year tranche at a 1.75% premium to CDOR per annum; the second, six-year tranche at 6.5% per annum (increasing to 7.5% after 5 years); and the third, seven-year tranche at 8.5% per annum (increasing to 9.5% after 5 years);
  • As part of the financial package, Air Canada issued an aggregate of 14,576,564 warrants exercisable for the purchase of an equal number of Air Canada shares, subject to customary adjustments, at a price of $27.2698 per share during a 10-year term, representing 10% of the total commitment available under the above secured and unsecured credit facilities; 50% of the warrants vested concurrently with the implementation of the credit facilities and the remaining 50% of the warrants will vest on a proportional basis to the amounts that Air Canada may draw under the above unsecured credit facilities;
  • Up to approximately $1.4 billion in the form of an unsecured credit facility tranche to support customer refunds of non-refundable tickets. The facility will have a seven-year term and carry an annual interest rate of 1.211%.

As part of the financial package, Air Canada has agreed to a number of commitments related to customer refunds, service to regional communities, restrictions on the use of the funds provided, employment and capital expenditures. These include:

  • Beginning April 13, 2021, offering eligible customers who purchased non-refundable fares but did not travel due to COVID-19 since February 2020, the option of a refund to the original form of payment. In support of its travel agency partners, Air Canada will not retract agency sales commissions on refunded fares;
  • The resumption of service or access to Air Canada’s network for nearly all regional communities where service was suspended because of COVID-19’s impact on travel, through direct services or new interline agreements with third party regional carriers;
  • Restricting certain expenditures, and restricting dividends, share buybacks and senior executive compensation;
  • Obligations to maintain employment at levels which are no lower than those at April 1, 2021; and
  • The completion of the airline’s acquisition of 33 Airbus A220 aircraft, manufactured at Airbus’ Mirabel, Quebec facility. Air Canada has also agreed to complete its existing firm order of 40 Boeing 737 Max aircraft. Completion of these orders remains subject to the terms and conditions of the applicable purchase agreements.

In connection with the Government’s equity investment, Air Canada has agreed to provide customary registration rights. The Air Canada shares and warrants issued to the Government are subject to certain transfer restrictions as well as an exercise cap which limits the Government’s aggregate voting rights from the shares acquired pursuant to this investment (including upon any exercise of the warrants) to 19.99%.

Air Canada puts its new Airbus A220 in TCA colors into service

Air Canada took delivery of the latest Airbus A220-300 (the pictured C-GNBN, msn 55112) on April 3, 2021.

The airliner is painted in the historic and retro Trans-Canada Air Lines livery.

On April 5, 2021 the new addition flew its first revenue flight as flight AC 404 from Toronto (Pearson) to Montreal (Trudeau).

Copyright Photo: TMK Photography.

Air Canada and Transat A.T. Inc. agree to terminate arrangement agreement

Air Canada and Transat A.T. Inc. (Air Transat) announced today that they have mutually agreed to terminate the Arrangement Agreement for the proposed acquisition of Transat by Air Canada.

Air Canada and Transat had originally agreed in June 2019 on the acquisition, the terms of which were subsequently amended in August 2019 and then revised in October 2020 as a result of the severe economic impact of the COVID-19 pandemic.

As previously disclosed, the acquisition was conditional on the approval of various regulatory authorities, including the European Commission (“EC”). In order to meet that key condition, Air Canada offered and enhanced a significant package of remedies, which went beyond the commercially reasonable efforts required of Air Canada under the Arrangement Agreement and what has been traditionally accepted by the EC in previous airline merger cases. Following recent discussions with the EC, it has become evident, however, that the EC will not approve the acquisition based on the currently offered remedy package.

After careful consideration, Air Canada has concluded that providing additional, onerous remedies, which may still not secure an EC approval, would significantly compromise Air Canada’s ability to compete internationally, negatively impacting customers, other stakeholders and future prospects as it recovers and rebuilds from the impact of the COVID-19 pandemic. Especially in this challenging environment, it is essential that Air Canada focus on creating the optimal conditions for its full recovery by preserving and leveraging all of its key strengths and assets including its strong employee culture.

Both Air Canada and Transat have agreed to terminate the Arrangement Agreement with Air Canada paying Transat a termination fee of $12.5 million, and with Transat no longer under any obligation to pay Air Canada any fee should Transat be involved in another acquisition or similar transaction in the future.

Air Canada commits to ambitious net zero emissions goal by 2050

Air Canada has made this announcement:

  • 2030 absolute targets of 20 per cent GHG net reductions from flights plus 30 per cent GHG net reductions from ground operations compared to 2019 baseline
  • Investment of $50 Million in SAF and carbon reductions and removals
  • 2050 goal of net zero GHG emissions from all operations globally

Air Canada today announced its long-term commitment to advancing climate change sustainability throughout its business. The airline has set ambitious climate targets to realize a goal of net-zero greenhouse gas emissions (GHG) throughout its global operations by 2050.  To reach this, Air Canada has set absolute midterm GHG net reduction targets by 2030 in its air and ground operations compared to its 2019 baseline, and has committed to investing $50 Million in Sustainable Aviation Fuel (SAF), and carbon reductions and removals.


<p><a href=”https://vimeo.com/522041298″>Air Canada Commits to Ambitious Net Zero Emissions Goal by 2050</a> from <a href=”https://vimeo.com/aircanadamedia”>Air Canada</a> on <a href=”https://vimeo.com”>Vimeo</a&gt;.</p>

“Economic growth and sustainability are equally important, and we have a strong track record for both. Despite the severe impact of the COVID-19 pandemic, we remain deeply committed to long-term sustainability. Climate change is critical, and we believe we can and must do more to address this for the future of our environment. This is why we are further embedding climate considerations into our strategic decision-making, and undertaking a very ambitious plan that is meaningful, will support Canada’s leadership position on climate change, advance de-carbonization in the airline industry while keeping fares affordable for customers,” said Michael Rousseau, President and Chief Executive Officer at Air Canada.

Air Canada is very focused on investing in innovative, long term, sustainable emission reduction solutions. Absolute 2030 midterm GHG reduction targets have been set to ensure meaningful progress towards Air Canada’s ambitions net zero goal while the airline, technology and energy sectors are transitioning to low carbon alternatives.

Air Canada has identified the following key carbon reduction pillars:

Fleet and operations.  Air Canada will continue deploying its newly modernized and energy efficient Airbus A220 and Boeing 737 MAX narrow-body fleets that are more efficient and expected to average approximately 20 per cent less fuel consumption per seat and emit approximately 20 per cent less CO2 and 50 per cent less nitrogen oxides than aircraft they replace, continue to integrate climate factors in route and fleet planning, phase out carbon-intensive ground equipment, further advance electric vehicles and seek other electrification opportunities.

Innovation.  Further evaluate the viability, safety and performance of new electric, hydrogen or hybrid operational technologies, and other innovations such as short-haul transportation opportunities and electric drones to complement and support Air Canada’s global business network.

Sustainable Aviation Fuels and clean energy.  To further its work on sustainable aviation fuels, Air Canada will invest $50 Million in SAF and other low carbon aviation fuel (LCAF) development, evaluate the practical applications of renewable energy sources such as biogas and renewable electricity, and energy transition measures.

Carbon Reductions and Removals.  Air Canada will explore carbon negative emission technologies and other direct emission reduction and removal strategies in addition to further developing its carbon offset strategy for CORSIA compliance, customer offerings and more.

Air Canada currently reports its carbon footprint, targets and climate protection strategy through the CDP and will also be reporting through the Task Force on Climate-related Financial Disclosures (“TCFD”) framework as of 2022.

Air Canada has built a solid foundation in energy sustainability through numerous comprehensive initiatives to reduce its environment footprint.  Since 1990, Air Canada has improved fuel efficiency by 43 per cent.  From 2016 to 2019, the airline reduced more than 135,000 tonnes of GHG from its air operations through fuel efficiency initiatives, and its work in fuel sustainability includes:

  • Participating in eight biofuel flights with ongoing, active support for the development of SAF in Canada including working with the Government of Canada on policy development to support a Canadian-based sustainable aviation fuel industry.
  • Lead airline on Canada’s Biojet Supply Chain Initiative (CBSCI), a project to identify and solve supply logistic barriers that arise when aviation biofuels are introduced at major Canadian airports.
  • Contributing to the Civil Aviation Alternate Fuel Contrail and Emissions Research project (CAAFCER) to test the environmental benefits of biofuel use on contrail formation, benefiting all aviation stakeholders and climate science researchers.
  • Implementing a technologically advanced livery paint and painting process resulting in significant weight and fuel savings, with no chrome, lead or other heavy metals and is expected to last longer when compared to standard paint.
  • Operational improvements realized through more than 100 projects to optimize fuel consumption,  including  profile departure, RNPAR (a type of performance-based navigation), single engine taxiing to aircraft weight reduction such as the use of lightweight crew luggage, iPads for pilots replacing paper manuals and lighter weight composite onboard carts.

In 2020 and 2019, Air Canada was recognized by Vancouver Airport Authority as the YVR Green Excellence winner for green initiatives on Sea Island including water and energy conservation, waste minimization and the Richmond Ocean Shoreline Cleanup.

In 2018, Air Canada was named Eco-Airline of the Year by Air Transport World for Air Canada’s leadership in fuel efficiency and innovative sustainability, initiatives through a $10 Billion fleet modernization, sustainable aviation fuel development and support in Canada, and fuel efficiency program and route improvements.

Since 2007, a long-standing program offering customer carbon neutral purchase options has resulted in more than 60,000 tC02e of emissions offset.

 

Jazz to become the sole Express operator for Air Canada

Air Canada today announced an agreement to amend the Capacity Purchase Agreement (CPA) with Jazz Aviation LP, a wholly-owned subsidiary of Chorus Aviation Inc., under which Jazz currently operates certain regional Air Canada Express flights.

Through the revised agreement, Air Canada will transfer operation of its Embraer E175 fleet to Jazz from Sky Regional and Jazz will become the sole operator of Air Canada Express services. The revisions to the CPA are subject to Jazz reaching an agreement with the Air Line Pilots Association, International. If this condition is satisfied, the CPA will be amended on a retroactive basis to January 1, 2021.

“Air Canada is consolidating its regional flying with Jazz in response to the ongoing devastating impact of COVID-19 upon the airline industry. This necessary realignment of our regional services will help Air Canada achieve efficiencies and reduce operating costs and cash burn by consolidating its regional operations with one provider. Moreover, by streamlining the regional fleet, this agreement will also position Air Canada to operate more competitively with a single provider as traffic returns following the pandemic,” said Richard Steer, Senior Vice President, Operations and Express Carriers.

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“Sky Regional has provided excellent service to Air Canada and its passengers over the past decade with an impeccable safety record and excellent on time performance and cost management. We thank Sky and all of its employees for their effort, dedication and valued partnership,” said Michael Rousseau, President and Chief Executive Officer of Air Canada.

Sky Regional Fleet is currently comprised of 25 Embraer 175 aircraft.

Sky Regional Airlines Inc. is a Canadian company that operates regional routes on behalf of Air Canada under the Air Canada Express banner. On May 1st in 2011, Sky Regional operated its first commercial flight and went on to service markets such as Toronto City Centre, Montreal, Ottawa, Moncton and Quebec City with a fleet of Bombardier Q400.

In 2013, the airline expanded, adding 15 Embraer E175 series aircraft serving the Northeastern United States, flying in excess of 100 flights per day into cities including Boston, New York, Newark, Philadelphia, Washington, Dallas, and Chicago. In 2016, Sky Regional Airlines expanded its fleet with an additional five E175 aircraft serving such markets as Jacksonville, Houston, Denver and Atlanta.

While early in 2017 the airline saw the departure of the Q400’s, an additional five E175 were added to the fleet. Sky Regional’s entire fleet is now comprised of twenty-five Embraer E175 series aircraft.

Sky Regional routes:

As a result of the CPA revisions and consolidation of regional flying, Air Canada expects to realize $400 million in cost reductions over the 15-year term of the agreement ($43 million per year until 2026 and $18 million per year thereafter). This includes:

  • Increasing near term-cost certainty as a result of the combined fleet under a single operator;
  • Reducing Air Canada’s overall regional flying compensation;
  • Creating related operational costs savings;

In addition, the revised CPA will lower future contractual capital expenditure and leasing costs through a restructured CPA fleet, avoiding an estimated $193 million in future capital expenditures.

Sky Regional Airlines aircraft photo gallery:

Sky Regional Airlines aircraft slide show:

Air Canada paints a new Airbus A220-300 in the TCA retro livery

Air Canada made this announcement on social media with photos:

Fresh from the Airbus paint shop in Montreal Mirabel, our brand new Airbus A220-300 (C-GNBN) proudly recognizes our heritage with a special Trans-Canada Air Lines (TCA) livery. It will soon join our fleet in the sky, stay tuned!