Air Canada cancels orders for some of its Airbus A220s, Boeing 737 MAXes
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Air Canada will be a smaller airline for the foreseeable future because of the coronavirus pandemic, executives said Monday.
The Montreal-based carrier has cancelled orders for nearly two dozen combined Airbus A220s and Boeing 737 MAX jets — the backbones of its future narrow-body fleet. The move, announced during Air Canada’s third quarter earnings call on Monday, follows a dramatic decline in the airline’s business with passenger numbers at just 12% of what it carried a year ago during the same three-month period.
The cancellations make good on a threat Air Canada CEO Calin Rovinescu made in July. Without either government relief or the easing of travel restrictions, the airline would be forced to look at “possible cancellations of Boeing and Airbus aircraft on order,” he said at the time.
The Canadian government has provided neither relief to airlines nor eased travel restrictions during the past three months. It was only on Sunday, Nov. 8, that transport minister Marc Garneau said the government was ready to discuss broad financial relief for the country’s airlines.
Canadian airlines are struggling. Both Air Canada and WestJet have indefinitely suspended service to a number of destinations, and all Porter Airlines flights remain “temporarily” cancelled until at least next February.
Air Canada’s A220 cancellations carry an extra bite. The jets were developed by Canadian manufacturer Bombardier before the program was bought by Airbus and most are assembled at Montreal’s Mirabel airport.
With the orderbook changes, Air Canada has orders for 23 more A220-300s after cancelling 12. It had 10 of the jets in its fleet at the end of September with another five due by year-end.
The airline has orders for 16 more 737 MAX 8s after cutting 10 from its commitments. Air Canada has 24 grounded MAXes that it hopes to resume flying in early 2021 following an expected re-certification of the jet by the end of 2020.
“The steps we have taken… are positioning Air Canada to not only sustain itself during the pandemic but also emerge as a strong and competitive, albeit smaller, carrier,” Rovinescu said Monday.
Air Canada 3Q20 earnings drop. Revenues ⬇️ 83% to C$757mn, and a net loss of C$685mn.
Net cash burn averaged C$9mn/day, better than C$15-17mn forecast. https://t.co/U4mEUoCP3C
— Edward Russell (@ByERussell) November 9, 2020
Air Canada has already retired 79 jets. This includes its entire Airbus A319, Boeing 767 and Embraer E190 fleets.
The airline reported a $685 million Canadian (US$528 million) loss during the third quarter. Its critical cash burn, or daily loss, dropped to an average of $9 million Canadian dollars a day.
Featured image courtesy of Airbus.
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