Air Canada threatens to cancel Airbus A220 order if government doesn't ease restrictions
Air Canada is fed up with the Canadian government's travel restrictions and is threatening to cancel its order for the made-in-Canada Airbus A220 to get them eased.
A combination of international arrival restrictions, including the closure of the U.S.-Canada border, plus internal restrictions and quarantines has hit the Montreal-based carrier hard, said Air Canada CEO Calin Rovinescu during a second quarter earnings call Friday. On top of this, the Canadian government has provided minimal financial support beyond an employee wage subsidy program.
“Without government industry support and as travel restrictions are extended, we will look at other opportunities to reduce costs and capital, including further route suspensions and possible cancellations of Boeing and Airbus aircraft on order," he said.
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Key to Rovinescu's threat is Air Canada's order for 38 A220-300s -- it already flies seven of the jets. The jets were designed by Montreal-based Bombardier and acquired by Airbus in 2018, and are assembled at Montreal Mirabel (YMX) airport. A plant that employs hundreds of Canadians.
Air Canada has already dropped eight smaller Canadian cities from its map and ended service on 30 routes due to COVID-19. Many believe the map paring is part of the airline's ongoing campaign to get the government to ease restrictions and provide some form of aid.
The airline reported a net loss of Canadian dollar 1.75 billion ($1.28 billion) in the second quarter. Passenger traffic fell by nearly 97% compared to the same three-month period in 2019.
Related: Air Canada drops 8 cities from route map amid coronavirus adjustments
Air Canada does not envision a market where all travel restrictions are lifted. Citing the continuing pandemic, Rovinescu called for lesser "science-based measures" based on the European Union model. This could allow some travel to resume while presumably keeping the virus at bay.
Despite threatening its order, Air Canada still envisions the A220 as central to its future fleet and map. The airline's chief commercial officer Lucie Guillemette said Thursday July 30 the jet will be a "cornerstone of some of our longer term recovery."
Both the plane's capabilities, which includes added range and improved efficiency compared to older aircraft its size, and positive customer feedback have exceeded Air Canada's expectations, she added.
Related: First look onboard Air Canada’s first Airbus A220
The carrier introduced the A220 in January, debuting it on flights between Montreal Trudeau (YUL) and Calgary (YYC). TPG's Zach Griff called the jet a "joy to fly" after riding on the inaugural sortie.
Air Canada has moved forward with plans to retire 79 jets from its fleet. It removed all 30 of its Boeing 767s -- including the 25 at its budget arm Rouge -- as well as its remaining 14 Embraer E190s and six Airbus A319s, between April and June, a quarterly financial filing shows. Another 29 of its A319s are slated for retirement in the next few months.
“Although we will emerge smaller with fewer aircraft, fewer people and fewer cities served… we will be nimbler and more competitive," said Rovinescu.
Related: Global air travel unlikely to recover until 2024 as COVID remains ‘issue’ in US, elsewhere
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.