Air Canada's total third-quarter revenue declined 86 percent year over year to $757 million Canadian, as the carrier has seen relatively little demand recovery amid the country's Covid-19 restrictions.
In an earnings call, CEO Calin Rovinescu noted that Air Canada's revenue passenger miles for the quarter, traditionally the carrier's strongest, were down 91 percent year over year. As a comparison, the three largest U.S. carriers had third-quarter traffic declines of about 80 percent year over year, which Rovinescu said showed "the stifling effects the travel restrictions have had in Canada, especially compared with many markets around the world."
"Our traffic decline translates into an additional $520 million Canadian to $600 million Canadian of lost revenue in the third quarter attributable directly to the Canadian travel restrictions, including the blanket ban on foreign nationals, mandatory 14-day quarantine for all arriving passengers and the Atlantic Canada travel bubble," he said.
After Air Canada in June indefinitely suspended service on 30 domestic routes and closed eight stations at regional airports, the carrier's planning team has identified 95 routes—domestic, U.S. transborder and international—that could be suspended as well as nine additional station closures. However, Air Canada said it is deferring any additional route suspensions or station closures due to recent comments by Transport Minister of Canada Marc Garneau indicating aid for the industry could be on the way.
Air Canada has been hopeful that recent Covid-19 testing programs will encourage a lightening of restrictions. EVP and chief commercial officer Lucie Guillemette said she expected a quick rebound of business travel demand should restrictions loosen or a vaccine be widely available.
"We've actually taken a look at what we have observed in other countries, where we've seen the removal of the quarantine restriction, and how it pertains to business traffic," Guillemette said. "If the environment changed, we believe that the new bookings that we would start to see would really be more geared at [small and midsized companies] and business travel."
Air Canada's capacity was down 81.7 percent year over year in the third quarter. For the fourth quarter, it projects capacity will be down 75 percent year over year.
Air Canada reported a loss of $685 million Canadian in the third quarter, compared with a net income of $636 million in the third quarter of 2019.
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