In its annual financial report for 2020, Air Canada reported that the carrier’s revenues declined 70 percent from 2019, resulting in an operating loss of nearly $C3.8 billion ($3 billion) for the year.
The company reported revenues totaled C$5.8 billion ($4.6 billion) in 2020 compared to C$13.3 billion ($10.4 billion) in 2019, when it posted an operating income of C$1.6 billion ($1.7 billion).
“With today’s release of 2020 fourth quarter and full year results, we close the book on the bleakest year in the history of commercial aviation, after having reported several years of record results and record growth at Air Canada,” said Calin Rovinescu the airline’s president and CEO.
In the annual financial statement from Air Canada, Rovinescu said that “the catastrophic impact of COVID-19 and government-imposed travel restrictions and quarantines has been felt across our entire network, deeply affecting all of our stakeholders. It has resulted in a 73 percent decline in passengers carried at Air Canada during the year and an operating loss of nearly $3.8 billion.”
According to the airline, capacity in 2020 was reduced by 67 percent compared to 2019 and plans call for first quarter 2021 capacity to be cut approximately 85 percent compared to the first quarter of 2019.
The carrier said that it 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, quarantines, border closures and market and regulatory conditions.”
Air Canada’s CEO went on to cite the reduction of the airline’s staff by over 20,000 and the dismantling of a global network “ten years in the making” as well as suspension of local flights to important communities as necessary but painful cuts that had to be made to bolster liquidity and allow for operational flexibility.
Despite the losses, Air Canada appears set to move ahead with the C$180 million acquisition of rival Air Transat. However although the move has been cleared by Canadian authorities, it still faces hurdles with antitrust regulators in Europe which could potentially scuttle the deal, according to some reports.
Air Canada’s gloomy financial report comes as the Canadian government announces new restrictions for international travelers entering the country. Canada’s borders remain closed to US travelers, with few exceptions for some necessary services and businesses.
Canadians have been told to suspend international and local travel during the pre-vaccine COVID-19 pandemic. “This is not the time to travel,” said the Canadian government in a recent statement.