Thursday,  January 27, 2022  9:17 am

“Bleakest year" in history: Air Canada posts $4.6-billion annual loss

“Bleakest year" in history: Air Canada posts $4.6-billion annual loss
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

Air Canada posted its annual 2020 financial results on Friday (Feb. 12), reporting that its total revenues of $5.8 billion in 2020 declined $13.2 billion, or 70 per cent, from 2019.

As such, Canada’s largest airline lost $4.6 billion in 2020 compared to a net income of $1.4 billion in 2019.

"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,” Calin Rovinescu, president and CEO of Air Canada, said in a statement.

Air Canada’s fourth quarter statements for 2020 showed a net loss of $1.1 billion, compared to a Q4 operating income of $145 million and net income of $152 million in 2019.

READ MORE: Air Canada is doing “everything imaginable” to safely restart travel

Rovinescu cited the “catastrophic impact of COVID-19’ and “government-imposed travel restrictions and quarantines” as leading reasons for the losses, saying how it’s “been felt across our entire network, deeply affecting all of our stakeholders.”

The news comes one day after the federal government green lit Air Canada's proposed purchase of Transat A.T

The pandemic and all of its factors resulted in a 73 per cent decline in passengers carried at Air Canada in 2020, and an operating loss of nearly $3.8 billion, Mr. Rovinescu said.

“Yet, despite a year-long onslaught of bad news, uncertainty and challenges posed by constantly changing requirements, our employees valiantly served our remaining customers professionally and transported them safely to their destinations, operated hundreds of repatriation flights and our Cargo team transported essential Personal Protective Equipment to Canada and around the world,” Rovinescu said, commending employees for their “courage” and “tireless efforts.”

Federal aid still up in the air

Uncertainty remains, Rovinescu said, as new variants of COVID-19 continue to infiltrate communities and as federal travel restrictions amp up.

However, the promise of new testing capabilities and vaccines “presents some light at the end of the tunnel,” he said.

“As our success raising significant liquidity throughout 2020 indicates, investors and financial markets share our optimistic long-term outlook for our airline,” said Mr. Rovinescu.

The CEO was also “very encouraged” by the “constructive nature” of the discussions Air Canada has been having with the Canadian government on sector-specific aid assistance, a long overdue promise that Ottawa made last year.

Calin Rovinescu, Air Canada President & CEO, will retire on Feb. 15. (Supplied)

“While there is no assurance at this stage that we will arrive at a definitive agreement on sector support, I am more optimistic on this front for the first time,” Rovinescu said.

“Painful decisions”

Rovinescu noted the “painful decisions” Air Canada has had to make over the past year.

These included reducing staff by more than 20,000, dismantling a global network ten years in the making, suspending service to many communities and aggressively cutting fixed costs, he said.

“At the same time, we have bolstered our liquidity position through several debt and equity financings to allow for additional operational flexibility and to support the implementation of our COVID-19 Mitigation and Recovery Plan,” he said.

The CEO also noted how Air Canada has “rationalized” its fleet, accelerating the permanent removal of older, less efficient aircraft, and restructured new aircraft orders so it can fly more fuel-efficient and greener airplanes.

The revamping of Air Canada’s Aeroplan loyalty program was another highlight last year, Rovinescu said.

Time to retire

As it was announced last fall, Mr. Rovinescu will be retiring from his duties next week on Monday, Feb. 15.

Michael Rousseau, Air Canada’s Deputy Chief Executive and Chief Financial Officer, will step in.

“I have absolute confidence in Mike and the entire leadership team – and know that as a result of our strong culture and discipline, Air Canada has the strength, agility, and resources to overcome the current crisis and to keep adapting to remain a global leader in the post-pandemic world,” said Mr. Rovinescu.

“I am extremely grateful to our customers for their trust and confidence, our employees and partners for their unwavering dedication and loyalty to our airline, and to our Board of Directors for their full support throughout my tenure.”

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