May 4 - Air Canada has reported first quarter 2020 EBITDA(1) (earnings before interest, taxes, depreciation and amortization) of $71 million compared to first quarter 2019 EBITDA of $583 million.

The airline reported an operating loss of $433 million compared to operating income of $127 million in the first quarter of 2019. At March 31, 2020, unrestricted liquidity amounted to $6.523 billion compared to unrestricted liquidity of $7.380 billion at December 31, 2019.

 

“No adjectives can adequately describe the pandemic’s cataclysmic effects upon our industry. Nor can numbers fully quantify the extent of financial devastation,” Air Canada chief executive Calin Rovinescu said on a conference call with analysts on Monday.

“We’re now living through the darkest period ever in the history of commercial aviation, significantly worse than the aftermath of 9/11, SARS, and the 2008 financial crisis.”

 

 

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

• Air Canada has reduced second quarter 2020 capacity by 85 to 90 per cent when compared to 2019’s second quarter. Third quarter 2020 capacity is expected to be reduced by approximately 75 per cent when compared to the third quarter of 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

• 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. As at March 31, 2020, Air Canada’s unrestricted liquidity amounted to $6.523 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. After giving effect to this facility and estimated declines in asset valuations as a result of COVID-19, Air Canada’s unencumbered asset pool (excluding the value of Aeroplan and Air Canada Vacations) amounts to approximately $2.6 billion. As part of Air Canada’s ongoing efforts to increase liquidity levels, additional financing arrangements continue to be pursued

• In late April 2020, Air Canada concluded a bridge financing of $788 million for 18 Airbus A220 aircraft which may be used for general corporate purposes and which Air Canada expects to replace with longer-term secured financing arrangements later in 2020 with the same lender

• In addition to cost savings associated with the significant capacity reductions, workforce reductions and other mitigation programs, Air Canada has initiated a company-wide cost reduction and capital reduction and deferral program which has now reached approximately $1.050 billion, increased from an initial target of $500 million, and continues to seek additional opportunities for cash preservation

• Air Canada is accelerating the retirement of 79 older aircraft from its fleet – Boeing 767, Airbus 319 and Embraer 190 aircraft, with the Embraer aircraft exiting the fleet immediately. Their retirement will simplify the airline’s overall fleet, reduce its cost structure, and lower its carbon footprint

• Air Canada suspended share purchases under its Normal Course Issuer Bid in early March
2020 and does not intend to renew it upon its expiry

• To assist with global requirements of goods and personal protective equipment during the pandemic, Air Canada has operated more than 500 all-cargo international flights since March 22, 2020, and plans to operate up to 150 all-cargo flights per week in the second quarter using a combination of Boeing 787 and Boeing 777 aircraft as well as four newly converted Boeing 777 and four converted Airbus 330 aircraft where it has doubled available cargo space by removing seats from the passenger cabin

• Air Canada has adopted the Canada Emergency Wage Subsidy (CEWS) for most of its workforce which allowed it to return previously furloughed Canadian-based employees to its payroll for the March 15 to June 6, 2020 period

• 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

• Air Canada makes safety its first consideration in all that it does and has been continually incorporating new information about COVID-19 into its health and safety policies and procedures for travelers and employees in all workplaces, airports and onboard aircraft. This includes a requirement for customers to wear a protective face covering and measures to implement social distancing, as well as enhanced protective personal equipment for airport agents and crews, the encouragement of safe practices such as frequent hand washing and collaborating with the Canadian federal government to screen passengers to determine fitness for flying of all customers. For more details on preventative measures and policies please see: aircanada.com

• To underscore its commitment to customer and employee safety, Air Canada will soon be introducing Air Canada CleanCare+. This program sets out all the health and safety measures being implemented at every touch point of the flight journey.

For more information, please visit aircanada.com

 

 

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