Guest Posted November 9, 2020 Share Posted November 9, 2020 The complete release can be read at: https://www.newswire.ca/news-releases/air-canada-reports-third-quarter-2020-results-823700314.html Air Canada Reports Third Quarter 2020 Results Français NEWS PROVIDED BY Air Canada Nov 09, 2020, 06:00 ET COVID-19 Mitigation and Recovery Plan nearly complete Total passengers carried declined 88 per cent due to COVID-19 and travel restrictions Deferral and/or cancellation of Boeing 737-8 and Airbus A220 deliveries Reduction of capital expenditures by about $3.0 billion over 2020-2023 period MONTREAL, Nov. 9, 2020 /CNW Telbec/ - Total revenues of $757 million in the third quarter of 2020 declined $4.773 billion or 86 per cent from the third quarter of 2019. The airline reported third quarter 2020 negative EBITDA(1) or (earnings before interest, taxes, depreciation and amortization), excluding special items, of $554 million compared to third quarter 2019 EBITDA of $1.472 billion. Air Canada reported an operating loss of $785 million in the third quarter of 2020 compared to operating income of $956 million in the third quarter of 2019. Total revenue passengers carried declined 88 per cent in the quarter compared to last year's third quarter. Unrestricted liquidity amounted to $8.189 billion at September 30, 2020. "Today's results reflect COVID-19's unprecedented impact on our industry globally and on Air Canada in what has historically been our most productive and profitable quarter. From the outset, we have made the health and safety of our customers and employees our chief concern. Our airline has been a leader in introducing progressive layers of protection, such as our comprehensive suite of biosafety measures, Air Canada CleanCare+, and we continue to explore new technologies and processes to further assure travellers and regulators. Amongst the various science-based measures we have been advocating, testing at airports is by far the most significant, as demonstrated by the McMaster HealthLabs' study of international travellers arriving at Toronto-Pearson. It was reported to be the largest-ever study of its kind and preliminary results clearly confirm safe alternatives exist to a mandatory 14-day quarantine, which is both stifling demand and frustrating travellers who are willing to be tested," said Calin Rovinescu, President and Chief Executive Officer of Air Canada. "In parallel, we acted decisively to implement our COVID-19 Mitigation and Recovery Plan. Since March, we have raised almost $6 billion in additional liquidity, leveraging what was one of the industry's strongest balance sheets as we entered the pandemic. We took the painful steps of eliminating 20,000 jobs, after having created 10,000 over the previous five years, and of reversing 10 years of profitable network expansion by reducing capacity by more than 80 per cent in the third quarter. "At the end of June, we made the difficult decision to indefinitely suspend 30 domestic routes and close eight regional stations and our Network Planning team has identified up to a further 95 domestic, U.S. transborder and international route suspensions and nine Canadian station closures required to preserve liquidity, cut costs and reduce capital expenditures as we prepare for a smaller footprint expected to last several years. Given the public statements made by the Honourable Marc Garneau, Canada's Minister of Transport, on November 8, 2020 regarding commencing immediate discussions with major airlines on aviation industry sector-specific support, we are deferring the additional route suspensions and station closures pending the progress of those discussions. "According to IATA's Chief Economist, governments have already provided more than US$160 billion of aid to airlines globally, recognizing the critical role they play in a country's economy. Beyond sustaining tens of thousands of direct and indirect jobs, a healthy Canadian airline industry is essential for Canada's infrastructure on which its economic recovery from COVID-19 depends and vital to securing the country's place in a reordered, post-pandemic world. The impact on the industry and on the economy of how we as a country handle this crisis in air transportation will be felt for years to come. "We have also continued our discussions with the Government of Canada on a more measured, science-based approach to travel restrictions and quarantines, which remain amongst the most onerous in the world. Preliminary results from several international studies and our McMaster HealthLabs study indicate testing can provide an effective responsible alternative to facilitate the safe relaxation of quarantines. "We have taken several measures to carefully rationalize our existing fleet: We are accelerating the retirement of 79 mainline and Rouge aircraft. We are deferring delivery of new Boeing 737-8 and Airbus A220 aircraft scheduled for delivery in 2021 and 2022 and cancelling 10 Boeing 737-8s and 12 Airbus A220s, representing about 40 per cent of the remaining scheduled deliveries. Despite modifications made to our orders, these two aircraft remain the core of our narrowbody fleet and enable us to efficiently serve transcontinental domestic and transborder routes through improved economics and range, while providing an excellent customer experience. Through this fleet restructuring and other capital reduction initiatives, we have successfully lowered total projected capital expenditures by about $3.0 billion over the 2020 to 2023 period compared to our total projected capital expenditures at the end of 2019. "In addition to the mitigation steps we have taken, Air Canada is also preparing for the post-COVID recovery. Along with other ongoing initiatives, this month we launched the new Aeroplan, expected to be one of the best travel loyalty programs available. Our simplified and restructured aircraft fleet will be highly fuel efficient and well-configured for our key routes. Our proposed acquisition of Transat A.T. Inc. will enable us to better compete with global competitors in a drastically altered global airline market. Our nimble Cargo team has pivoted to dedicated all-cargo flights during the pandemic and Cargo will become an increasingly important segment of our business going forward. Most importantly, our culture remains strong - we have employees who remain highly motivated and intensely focused on safely transporting our customers and I thank them for their commitment and hard work," concluded Mr. Rovinescu. Air Canada has taken or will be taking the following measures as part of its COVID-19 Mitigation and Recovery Plan: Link to comment Share on other sites More sharing options...
moeman Posted November 9, 2020 Share Posted November 9, 2020 Markets are happy. Shares up 25% this morning. Link to comment Share on other sites More sharing options...
Turbofan Posted November 9, 2020 Share Posted November 9, 2020 I know. But what is in these results that warrants a 25% stock surge? What am I missing? Link to comment Share on other sites More sharing options...
rudder Posted November 9, 2020 Share Posted November 9, 2020 22 minutes ago, moeman said: Markets are happy. Shares up 25% this morning. Yup. That’s the reason Garneau waited until weekend to make announcement. That combined with AC’s actions to adjust CapEx (2021 was unsustainable at current cash burn rates) is convincing investors that CCAA is less and less likely. Link to comment Share on other sites More sharing options...
Don Hudson Posted November 9, 2020 Share Posted November 9, 2020 13 minutes ago, Turbofan said: I know. But what is in these results that warrants a 25% stock surge? What am I missing? Possibly the news this morning from Pfizer pulling all markets upwards? Link to comment Share on other sites More sharing options...
Flightlevels Posted November 9, 2020 Share Posted November 9, 2020 32 minutes ago, Don Hudson said: Possibly the news this morning from Pfizer pulling all markets upwards? Agreed, the business news is reporting the lift in markets due to Pfizer’s news as well - in particular those hit by covid the most - transportation, cruise lines etc. Link to comment Share on other sites More sharing options...
rudder Posted November 9, 2020 Share Posted November 9, 2020 From the AC press release: “Our nimble Cargo team has pivoted to dedicated all-cargo flights during the pandemic and Cargo will become an increasingly important segment of our business going forward. Watch for further announcements shortly...... Link to comment Share on other sites More sharing options...
conehead Posted November 9, 2020 Share Posted November 9, 2020 21 minutes ago, rudder said: Watch for further announcements shortly...... Hmmmmm.... Link to comment Share on other sites More sharing options...
Canoehead Posted November 9, 2020 Share Posted November 9, 2020 Link to comment Share on other sites More sharing options...
conehead Posted November 9, 2020 Share Posted November 9, 2020 Ah, yes... the 767 freighter operation. How many aircraft in this fleet? Link to comment Share on other sites More sharing options...
moeman Posted November 9, 2020 Share Posted November 9, 2020 Cargojet down $32 this morning... Link to comment Share on other sites More sharing options...
dagger Posted November 9, 2020 Share Posted November 9, 2020 2 hours ago, conehead said: Hmmmmm.... It's certainly a good quarter for cargo rates. This is always the strongest, but with so much passenger lift out of the market, cargo rates are especially strong across the Pacific. AC is running a daily to near daily 777 on Shanghai-Toronto, got one on final approach to YYZ as I type this. Also, more Southpac capacity. Link to comment Share on other sites More sharing options...
rudder Posted November 9, 2020 Share Posted November 9, 2020 37 minutes ago, moeman said: Cargojet down $32 this morning... Combination of positive Pfizer announcement (the start back towards normalization) and a potential new competitor Even in the US, passenger airline stocks were way up today and cargo operators were down. Of greater interest is the price run up in CJT last week. Gave it all back today, and then some. Perhaps AJ will comment? Link to comment Share on other sites More sharing options...
AIP Posted November 9, 2020 Share Posted November 9, 2020 1 hour ago, rudder said: and a potential new competitor Care to elaborate ???? Link to comment Share on other sites More sharing options...
moeman Posted November 10, 2020 Share Posted November 10, 2020 4 hours ago, rudder said: From the AC press release: “Our nimble Cargo team has pivoted to dedicated all-cargo flights during the pandemic and Cargo will become an increasingly important segment of our business going forward. Watch for further announcements shortly...... I take this that you mean that we may soon be a new competitor for Cargojet? Link to comment Share on other sites More sharing options...
Turbofan Posted November 10, 2020 Share Posted November 10, 2020 Yeah. ACPA has advised of a vote coming to approve a cargo operation with Rouges 767’s Link to comment Share on other sites More sharing options...
boestar Posted November 10, 2020 Share Posted November 10, 2020 Get in line for someone to cut the big hole in the side. There is a waiting list....still... Link to comment Share on other sites More sharing options...
conehead Posted November 10, 2020 Share Posted November 10, 2020 35 minutes ago, boestar said: Get in line for someone to cut the big hole in the side. There is a waiting list....still... KF Aerospace can do it. And they’re not very busy right now. Link to comment Share on other sites More sharing options...
boestar Posted November 10, 2020 Share Posted November 10, 2020 are they all caught up? they had a backlog but it has been a while since I looked. Link to comment Share on other sites More sharing options...
Guest Posted November 10, 2020 Share Posted November 10, 2020 23 hours ago, rudder said: From the AC press release: “Our nimble Cargo team has pivoted to dedicated all-cargo flights during the pandemic and Cargo will become an increasingly important segment of our business going forward. Watch for further announcements shortly...... A lot of buzz on AVCanada re a cargo TA http://www.avcanada.ca/forums2/viewtopic.php?f=31&t=141786 Link to comment Share on other sites More sharing options...
dagger Posted November 10, 2020 Share Posted November 10, 2020 Some are speculating about a theoretical conversion of the AC 777-200s in the desert but I know of NO conversion program for that fleet type, and given that there are so few of them in the world to begin with, it ain't going to happen. There is a just-launched conversion program for the 777-300ER, in Israel, but the first plane won't come off the line until 2022. The 777-300 conversion creates the kind of main deck weight/density suitable for a parcel operator, not for a true freighter. So unless AC sees itself as capable of making money in that realm - and perhaps it does with more shifting to e-commerce - it's more likely to try to sell passenger 777-300ERs into that program than convert them for its own operations. Link to comment Share on other sites More sharing options...
Specs Posted November 11, 2020 Share Posted November 11, 2020 Shouldn't somebody answer the question why Air Canada Cargo stopped the All Cargo operation back in the 70s or 80s. I would think we stand a better chance of competing with LCCs than we do with other cargo operators. Link to comment Share on other sites More sharing options...
dagger Posted November 11, 2020 Share Posted November 11, 2020 28 minutes ago, Specs said: Shouldn't somebody answer the question why Air Canada Cargo stopped the All Cargo operation back in the 70s or 80s. I would think we stand a better chance of competing with LCCs than we do with other cargo operators. I'd say the cargo world has evolved a great deal, and any analysis dating back that far has fewer lessons to teach us today. Back then, even in the 1990s when I was more acquainted with global cargo, you had FedEx, and you had the heavies (Nippon Cargo, JAL Cargo, Northwest Cargo, etc., Cargolux) who.wanted the heavy high density stuff above all. A lot of consumer goods still moved by sea freight because what was the rush? Today, there is more in-between freight, that all air cargo operators want, more just-in-time sourcing. Those DC-8s AC flew back in the 70s and 80s certainly weren't capable of handling much heavy freight, so they were basically trying to compete in the express market with last mile delivery from the airport. Link to comment Share on other sites More sharing options...
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