Air Canada rips Trudeau over rules, may cancel plane orders

Bloomberg

Air Canada escalated a fight with the government of Prime Minister Justin Trudeau over the country’s stringent travel rules, threatening to suspend more routes and cancel orders of locally made planes.
Chief Executive Officer Calin Rovinescu lambasted the government during the airline’s second-quarter earnings call, saying that current restrictions — especially a mandatory 14-day quarantine for all travellers coming into Canada, regardless of origin — are preventing a recovery.
Among top global competitors, Air Canada is at an additional disadvantage because the government opted against airline-specific financial aid, he said.
“Without government industry support and as travel restrictions are extended, we’ll look at other opportunities to further reduce costs and capital, including further route suspensions and possible cancellations of Boeing and Airbus aircraft on order,” Rovinescu said.
That includes the A220, the former Bombardier Inc jetliner taken over by Airbus SE that is manufactured in Quebec, he added.
The salvo is the latest display of growing tensions as airlines ask to loosen travel restrictions that have changed little since March, even as the Covid-19 outbreak eases in Canada. Trudeau has retorted that he’s putting safety first.
Transport Minister Marc Garneau “recognises the impact Covid19 is having on the air sector and understands that airlines are facing significant challenges,” his spokeswoman, Livia Belcea, said in a statement to BNN Bloomberg.
Canada doesn’t allow foreign tourists, even from places with few virus cases. Most business travel is banned and everyone coming in must stay isolated for two weeks, including returning Canadian residents with no symptoms, under threat of potential jail time if they break quarantine. An official advisory recommends against non-essential travel.
“Canada needs to find a responsible way to coexist with Covid-19 until there is a vaccine,” Rovinescu said.
The company said revenue dropped 89% in the second quarter and expects capacity to be down 80% in the third quarter from a year ago.
Previously it had anticipated a 75% capacity drop. The industry will take at least three years to recover and will shrink, the airline predicted.
The company said it cut C$1.3 billion ($970 million) worth of costs by laying off 20,000 people, suspending 30 routes and retiring 79 aircraft.