Air Canada posts third straight quarterly loss

Air Canada shares soared as much as 29 per cent on Monday following news of progress on a COVID-19 vaccine and Canadian governmentled financial aid talks, even as the carrier reported its third straight quarterly loss due to the pandemic.

International air travel remains severely affected around the globe because of border restrictions by many countries, leading carriers to slash routes and ground aircraft.

Shares in global airlines, however, surged on Monday after drugmaker Pfizer Inc.’s experimental vaccine was more than 90 per cent effective in preventing COVID-19 based on initial data.

Air Canada Chief Executive Calin Rovinescu, who is retiring in February, said he is “cautiously optimistic” about a vaccine while acknowledging distribution challenges. The stock was up 20 per cent at C$18.82, while the benchmark Canadian share index was two per cent higher.

With the pandemic forcing Canada’s biggest airline to cut the majority of flights, Rovinescu said the carrier is looking at converting several Boeing 767 aircraft to freighters as cargo transport becomes an “increasingly important part of our business.”

Air Canada also said it would hold off on additional route suspensions and Canadian station closures “pending the progress” of talks over financial assistance to the hardhit airline sector.

Air Canada said it would retire 79 aircraft from its fleet and announced cancellations of 10 Boeing Co. 737 MAX and 12 Airbus A220 jets.

Rovinescu said he expects the MAX to return to service in Canada in early 2021.

The airline forecast cash burn of between C$12 million and C$14 million per day on average for the current quarter.

Air Canada reported a loss of C$685 million, or C$2.31 per share, for the third quarter, compared with a profit of C$636 million, or C$2.35 per share, a year earlier.

Operating revenue plunged about 86 per cent to C$757 million, but the decline slowed from 89 per cent in the second quarter. Analysts on average had expected Air Canada to lose C$2.60 per share in the third quarter on revenue of $1.06 billion.