Air Canada has reported first quarter 2021 operating revenues of $729 million, a decline of $2.993 billion or 80% compared to the first quarter of 2020, and an operating loss of $1.049 billion compared to an operating loss of $433 million in the first quarter of 2020.
Air Canada’s net cash burn is $1.274 billion, or approximately $14 million per day, on average. The airline’s unrestricted liquidity amounted to $6.582 billion at March 31, 2021.
"During the quarter, Air Canada's cash burn rate progressively improved, albeit moderately given the ongoing impact of the pandemic on advance ticket sales,” said Michael Rousseau, President and Chief Executive Officer of Air Canada. “Air Canada had almost $6.6 billion in liquidity at the quarter's end and we subsequently finalized a financial package with the Government of Canada (primarily comprised of repayable loans) to provide access of up to $5.9 billion more in liquidity. Beyond serving as a layer of insurance, this makes available, if required, the resources necessary to rebuild and compete in the post-pandemic world.”
Rousseau continued that the airline is pursuing other revenue opportunities, not least cargo, since Air Canada Cargo has now completed more than 7,500 all-cargo flights since March of last year using its wide-body passenger aircraft as well as certain temporarily modified Boeing 777 and Airbus A330 aircraft, which have additional available cargo space due to the removal of seats from the passenger cabin. In the first quarter of 2021, a total of 2,362 all-cargo flights were operated.
Air Canada is also building up its transformed Aeroplan program, establishing a partnership with Starbucks in Canada. The airline is also committed to achieving net-zero emissions by 2050, which includes a $50 million investment in Sustainable Aviation Fuel, and carbon reductions and removals.
"With these and other measures, Air Canada is poised to emerge strongly from the pandemic,” said Rousseau. “It is now essential that governments communicate and implement a reopening plan for our country; recognizing that a healthy aviation sector is vital to Canada's economic recovery. Starting with replacing blanket restrictions with science-based testing and limited quarantine measures where appropriate, Canada can reopen and safely ease travel restrictions as vaccination programs roll out. We have seen elsewhere, notably in the U.S., that travel rebounds sharply as COVID-19 recedes and restrictions are lifted, and we fully expect this can be replicated in Canada.”
In the first quarter of 2021, Air Canada reduced its ASM capacity by 82% compared to the first quarter of 2020 (or a reduction of 84% when compared to the first quarter of 2019). Air Canada plans to approximately double its second quarter 2021 ASM capacity from the same quarter in 2020. When compared to the same period in 2019, second quarter 2021 ASM capacity is expected to decrease 84%.
Air Canada projects a net cash burn of between $1.180 billion and $1.370 billion (or between $13 million and $15 million per day, on average) in the second quarter of 2021.