Air Canada lost over half a billion dollars in the last quarter, and despite lowering cash burn to around $7 million a day, it is expecting a tough winter ahead. As part of its efforts to improve its position, it has deferred some new narrowbody aircraft deliveries. More significantly, it has also canceled orders for 10 Boeing 737 MAX and 12 Airbus A220s entirely.
Financial Difficulties and Cancellations
Air Canada’s third-quarter results are in and are as gloomy as is to be expected. Overall, the airline reported a net loss of CA$685 million ($526 million) for the quarter. It was an 86% drop from its performance last year and has led the airline to take some significant steps to improve its liquidity position.
The airline’s President and Chief Executive Officer, Calin Rovinescu, noted that both Air Canada and its subsidiary Rouge will come back from the crisis with much smaller fleets. Overall, 79 aircraft across the two fleets will be taking early retirement. Additionally, orders with both Airbus and Boeing have been canceled or deferred.
In a statement, he said:
“We are deferring delivery of new Boeing 737-8 and Airbus A220 aircraft scheduled for delivery in 2021 and 2022 and cancelling 10 Boeing 737-8s and 12 Airbus A220s, representing about 40 per cent of the remaining scheduled deliveries.”
Going on to conclude by saying:
“Through this fleet restructuring and other capital reduction initiatives, we have successfully lowered total projected capital expenditures by about $3.0 billion over the 2020 to 2023 period compared to our total projected capital expenditures at the end of 2019.”