Air Canada cancels 30 domestic routes, closes 8 stations at regional airports
Airline blames 'weak demand for both business and leisure travel due to COVID-19'
Air Canada is indefinitely suspending 30 domestic regional routes and closing eight stations at regional airports across Canada because of an unprecedented drop in demand for air travel as a result of COVID-19.
The Montreal-based airline said Tuesday the cuts are being made because of continuing weak demand for both business and leisure travel because of COVID-19 travel restrictions and border closures.
The routes being cancelled are:
- In Atlantic Canada: Deer Lake-Goose Bay, Deer Lake-St. John's, Fredericton-Halifax, Fredericton-Ottawa, Moncton-Halifax, Saint John-Halifax, Charlottetown-Halifax, Moncton-Ottawa, Gander-Goose Bay, Gander-St. John's, Bathurst-Montreal, Wabush-Goose Bay, Wabush-Sept-Iles, Goose Bay-St. John's.
- In Quebec: Baie Comeau-Montreal, Baie Comeau-Mont Joli, Gaspé-Iles de la Madeleine, Gaspé-Quebec City, Sept-Iles-Quebec City, Val d'Or-Montreal, Mont Joli-Montreal, Rouyn-Noranda-Val d'Or.
- In Ontario: Kingston-Toronto, London-Ottawa, North Bay-Toronto, Windsor-Montreal.
- In Western Canada: Regina-Winnipeg, Regina-Saskatoon, Regina-Ottawa, Saskatoon-Ottawa.
The regional airports where Air Canada is closing its stations include:
- Bathurst, N.B.
- Wabush, N.L.
- Gaspé, Que.
- Baie Comeau, Que.
- Mont Joli, Que.
- Val d'Or, Que.
- Kingston, Ont.
- North Bay, Ont.
More than two-thirds of the routes being cancelled and all eight of the regional stations are operated by Jazz Aviation, a partner of Air Canada.
"I am saddened by the impact today's announcement will have on our employees, suppliers and the affected communities, but respect and understand the difficult choice our partner, Air Canada, has had to make," said Joe Randell, CEO of Chorus Aviation, which owns and operates Jazz.
Other changes possible
Air Canada said it expects the airline industry will not recover from the damage incurred by the coronavirus pandemic for three years at least, and makes it clear that Tuesday's route cancellations may not be the end of any drastic steps that may have to be taken.
"Other changes to ... network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate," the airline said.
The airline announced earlier this year that it would lay off about 20,000 workers, or more than half of its staff, as part of its plan to cut costs.
Business professor Ian Lee, of the Sprott School of Business at Carleton University in Ottawa, says the move shows just how bad the outlook is for airlines right now.
"It's a recognition that they're in dire straits," he said in an interview. "The borders are still closed to the United States — which, of course, is an enormous market. And their secondary market, which is Europe, is also closed."
A major blow to Atlantic Canada
"This announcement today is going to be devastating to those smaller communities across Canada, and I think there's more cuts to come," Lee said.
Monette Pasher, executive director of the Atlantic Canada Airports Association, agrees with that assessment. "It's a real step backwards in terms of connecting our region to the world, and we're disappointed about that but certainly understand the position," she said in an interview.
WATCH | Air Canada cancels 30 domestic routes after pandemic losses:
Air Canada said system-wide capacity was down about 85 per cent in the second quarter compared with the same quarter last year, and the airline expects capacity in the third quarter to be down 75 per cent compared with the third quarter of 2019.
The airline lost more than $1 billion in the first quarter, and burned through $688 million in cash in March alone.
"You don't need to be a strategist in a business school or an accountant to understand if you're burning $22 million a day and you've a very negligible revenue flowing in, you are a prime candidate for bankruptcy," Lee said.