EASE TRAVEL RESTRICTIONS, URGES AIR CANADA CEO.

AIR CANADA CEO

TORONTO • The chief executive of Canada’s largest air carrier says it’s time for the federal government to either relax pandemic-related restrictions on travel or provide more aid to a beleaguered airline industry that has been left “basically … in shutdown mode” due to measures to contain COVID-19.

“This is catastrophic territory,” Air Canada CEO Calin Rovinescu told the FP in an exclusive interview Tuesday.

“This is hundreds of times worse than 9/11, SARS, or the global financial crisis — quite frankly combined…. We never got to the level when we were only operating at five per cent in any of those circumstances, you know, other than the three days of shut-down post 9/11.”

Rovinescu said “broad brush” blanket travel advisories were appropriate in March and April when little was understood about the virus and how COVID-19 was transmitted, but that jurisdictions such as the European Union have since moved to create “safe corridors” or “travel bubbles” based on science and virus tracking, with “bio-safety” measures put in place in airports and on flights.

“In my opinion, that’s the way to go,” he said, adding that there has been “dialogue” with government officials, but no significant movement to ease global or domestic restrictions for Canadian airlines. Those include mandatory 14-day quarantines that Rovinescu described as putting “the cold shower” on business travel. He said the blanket approach has persisted even as Canada’s virus reproduction rate has been contained below a key threshold that was understood to be the key to easing some restrictions.

“Right now, we’re closed to business by government decree,” he said.

Meanwhile, while Canadian air carriers such as Air Canada have had to raise funds to offset their high fixed costs and cash burn, their global counterparts including American Airlines, United, Southwest, Singapore Airlines, Air France and KLM in the Netherlands are receiving billions of dollars and euros in government aid and rescue packages, he said.

That aid “is something of a recognition that airlines are a key driver of economic activity,” Rovinescu said, adding that while Air Canada generated nearly $20 billion in revenue last year, it is estimated to have enabled spin-off revenue at other companies — from food service to aircraft maintenance — of around $50 billion.

Since the pandemic began to take a toll on its business in the first quarter, Air Canada has raised about $5.5 billion to offset fixed costs and cash burn. Nevertheless, in mid-May the company announced it would have to lay off 20,000 workers.

“We’ve gone from a health crisis to a very serious economic crisis,” Rovinescu said, adding that the business sector and governments should be working collaboratively to reopen the economy in a safe way.

For the airline industry, which competes internationally, there has to be movement soon, either in the form of government aid or eased travel restrictions, he said.

“Either one or the other or both. But it can’t be neither.”

By the third quarter, Air Canada had hoped to be operating at about 25 per cent of capacity, Rovinescu said, adding that he believes public safety and a sustainable airline industry should not be viewed as a “zero sum game” or mutually exclusive.

“We can absolutely achieve both,” he said.

Such efforts have not been entirely smooth so far. A recent relaxation by the airline industry enabling carriers to fill seats on planes rather than leave empty seats between passengers has prompted some blowback on social media, particularly in the United States where mask-wearing has not been universal.

But Rovinescu said there is a “chicken and egg” argument to be made, suggesting that allowing customers to travel to geographies that have had the virus under control for a period of time would increase confidence levels, in part because increased sanitation measures, mask-wearing and temperature checks have already been put in place.

RIGHT NOW, WE’RE CLOSED TO BUSINESS

BY GOVERNMENT

DECREE.