Air Canada has reported an 86% fall in total revenues of $757 million in the third quarter of 2020, with an operating loss of $785 million compared to operating income of $956 million in the third quarter of 2019. Air Canada has $8.189bn in unrestricted liquidity at September 30, 2020.
Calin Rovinescu, President and Chief Executive Officer of Air Canada, said that the airline’s COVID-19 Mitigation and Recovery Plan is advancing and since March, the company has raised almost $6 billion in additional liquidity, eliminated 20,000 jobs and reduced capacity by more than 80% in the third quarter. The airline has indefinitely suspended 30 domestic routes and close eight regional stations but the decision on a further 95 domestic, US transborder and international route suspensions has been deferred pending the progress of the discussions with Marc Garneau, Canada's Minister of Transport, on aviation industry sector-specific support.
Air Canada is accelerating the retirement of 79 mainline and Rouge aircraft, and is deferring delivery of new Boeing 737-8 and Airbus A220 aircraft scheduled for delivery in 2021 and 2022. The airline has also cancelled orders for 10 737-8s and 12 A220s, representing about 40 per cent of the remaining scheduled deliveries.
This fleet restructuring and other capital reduction initiatives, has enabled the airline to lower total projected capital expenditures by about $3.0 billion over the 2020 to 2023 period.
Like other passenger airlines, Air Canada is hoping its cargo arm will provide much-needed financial support going forward. Air Canada operated more than 3,000 all-cargo international flights since March 22, 2020, and plans to operate up to 100 all-cargo flights per week in the fourth quarter of 2020 using a combination of 787 and 777 aircraft as well as four converted 777 and three converted A330s where it has doubled available cargo space by removing seats from the passenger cabin.
In early October 2020, Air Canada announced that it had completed sale and leaseback transactions for nine Boeing 737-8 aircraft for total proceeds of US$365 million. The nine aircraft were delivered to Air Canada in the past three years.
Air Canada says that it continues to assess additional financing options and has an unencumbered asset pool (excluding the value of Aeroplan, Air Canada Vacations and Air Canada Cargo) of approximately $1.8bn.
Air Canada plans to reduce its fourth quarter 2020 capacity by approximately 75% from the same quarter in 2019. Air Canada projects net cash burn of between $1.1 billion and $1.3 billion (or between $12 million and $14 million per day, on average) in the fourth quarter of 2020.