Air Canada is adjusting its fleet and workforce in anticipation of a recovery period lasting at least three years.
The carrier on Monday reported first-quarter operating revenue declined 16.1 percent year over year to C$3.7 billion in the first quarter. Traffic was down 17.8 percent as capacity was down 9.6 percent, and load factor declined 7.4 percentage points year over year to 74.5 percent. Air Canada's loss for the quarter was C$1.05 billion.
Air Canada is cutting its second-quarter capacity between 85 percent and 90 percent year over year, and third-quarter capacity will be down about 75 percent. It has sped up the retirement of 79 older aircraft from its fleet, including Embraer 190 aircraft that will be retired immediately as well as Boeing 767 and Airbus 319 aircraft. It recently brought back furloughed employees via the Canada Emergency Wage Subsidy program, but most of those employees likely will be let go when the program ends, as the carrier has a smaller fleet and operations for the "foreseeable future," according to a Cowen research note.
The carrier, which already had announced mask requirements for passengers, also announced new safety and sanitary measures on Monday, including mandatory pre-flight temperature checks for passengers. Travelers who do not pass the temperature check or related health questionnaire will be rebooked at no additional cost, according to Air Canada.
Other measures include distributing kits with hand sanitizers and other health items to all passengers and a cap on seats sold per flight so that passengers will not sit adjacent to anyone unless they are traveling with someone who needs their assistance, a policy that will be in effect until at least June 30.
RELATED: Air Canada Q4 earnings