Trudeau has resisted changes in the name of safety, the latest sign of a strikingly distant relationship between Air Canada and the government
“We need to start being able to earn some revenue,” Air Canada Chief Executive Officer Calin Rovinescu said in a video call this month with the Canadian Chamber of Commerce. “Right now it is the government that’s preventing us from doing that.” Analysts expect a 91 per cent revenue drop when the carrier reports second-quarter earnings Friday, according to data compiled by Bloomberg.
Air Canada’s fate is tied to the recovery of international travel, a key part of its growth strategy in recent years as it added overseas routes, banking on flying foreign customers through Canada on their way to other destinations. Yet the uptick in global passenger demand in June was driven almost entirely by domestic flights, according to data from the International Air Transport Association.Strict isolation rules like Canada’s remain a concern for airlines worldwide.
“I understand how difficult it is to see these travel restrictions in place but Canadians understand that keeping our cities, our municipalities, our elders, our front-line workers safe by preventing international travel is a continued thing we need to do,” Trudeau told reporters when asked about the letter.While airlines are now focused on getting Canada to crank the door open, they may pivot back to their initial request of seeking financial support, according to an industry group.
Ottawa has created a wage subsidy and a loan program that large companies can use. But the latter comes at a high cost — an interest rate on unsecured debt that rises from 5 per cent to 8 per cent after the first year, plus warrants.Peter J. Thompson/National Post files
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