With losses topping $1 billion last quarter, Air Canada says it will be at least three years before flights and earnings return to 2019 levels as the B次元官网网址漜ataclysmicB次元官网网址� effects wrought by the COVID-19 pandemic continue to mount.

B次元官网网址淲eB次元官网网址檙e now living through the darkest period ever in the history of commercial aviation, significantly worse than 9/11, SARS and the 2008 financial crisis,B次元官网网址� CEO Calin Rovinescu said on a conference call with analysts Monday.

B次元官网网址淭here is no doubt that we are not yet out of the trough.B次元官网网址�

Since mid-March, the countryB次元官网网址檚 largest airline has slashed its flight schedule by more than 90 per cent and grounded more than 200 aircraft, cutting service internationally to just five airports from more than 150.

Passenger revenue dropped by $604 million or 16 per cent in the first quarter compared with a year earlier as the company burned through $22 million in cash per day in March.

And the crisis wonB次元官网网址檛 be over quickly.

In the second quarter, flight capacity will be down as much as 90 per cent, Air Canada said. Cash burn should actually ease up slightly due to the dramatic cost reductions, even as it expects virtually B次元官网网址渘o revenue coming in other than cargo.B次元官网网址�

The carrier predicted third-quarter capacity will still be reduced by 75 per cent compared with a year earlier, though uncertainty around travel restrictions, passenger demand and proliferation of the virus itself make some predictions akin to B次元官网网址渃rystal ball gazing,B次元官网网址� Rovinescu said.

When travellers do start venturing back onto airplanes, the airline expects they will edge toward domestic flights and trips to the U.S., B次元官网网址漹isiting friends and relatives, visiting their vacation homes,B次元官网网址� he said.

The CEO was less confident about business traffic. B次元官网网址淲e know that people are getting comfortable with alternative facilities such as these video conferences, the Zooms of this world.B次元官网网址�

Amid border shutdowns and record-low travel demand across the globe, Berkshire Hathaway CEO Warren Buffet said over the weekend that he had divested his companyB次元官网网址檚 entire stake in the top four U.S. airlines last month. The announcement prompted shares of American, Delta and United and Southwest to fall between five and eight per cent Monday.

Air CanadaB次元官网网址檚 shares dropped by $1.67 or nearly nine per cent to close at $17.63 on the Toronto Stock Exchange, a 62 per cent plunge from Feb. 4.

To B次元官网网址減rovide greater peace of mindB次元官网网址� to travellers, the company plans to check the temperatures of all passengers. Mandatory temperature screenings with infrared thermometers at all airports are part of a suite of measures to be introduced by May 15, Air Canada said.

Rovinescu declined to discuss the viability of his plan to buy travel company Transat AT for $720 million B次元官网网址� $18 per share for a company whose stock closed at $8.50 on Monday B次元官网网址� which received a thumbs-up from shareholders in August but awaits regulatory approval in Canada and the European Union.

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The acquisition agreement specifically excludes B次元官网网址渙utbreaks of diseaseB次元官网网址� or B次元官网网址渁ny changeB次元官网网址�affecting generally the airline industryB次元官网网址� as provisions allowing either side to call off the deal.

B次元官网网址淚 think theyB次元官网网址檙e getting a ton of pressure from shareholders, but their counselB次元官网网址檚 basically said, B次元官网网址楪uys, if you read the contract, weB次元官网网址檙e committed to it,B次元官网网址橞次元官网网址� AltaCorp Capital analyst Chris Murray said in a phone interview.

Air Canada said it has achieved $1.05 billion in cost savings through reductions or deferrals in its capital spending plan as well as 20,000 furloughed employees and hundreds of parked planes.

It had $6.52 billion in cash at the end of March B次元官网网址� some $860 million less than three months earlier B次元官网网址� after drawing down two revolving lines of credit that yielded $1.03 billion.

Cash liquidity may increase from that B次元官网网址渇ormidable bufferB次元官网网址� in the second quarter as the company draws down new debtB次元官网网址� last month it was granted a pair of loans amounting to $1.62 billion B次元官网网址� secured in part by aircraft and spare engines, Canaccord Genuity analyst Doug Taylor said in a research note.

Air Canada has converted four Boeing 777s B次元官网网址� its largest wide-body aircraft B次元官网网址� and several Airbus 330s into cargo planes as the need for medical supplies rises, but B次元官网网址渢he volumeB次元官网网址檚 not incredibly high,B次元官网网址� Rousseau said.

The Montreal-based company is also accelerating the retirement of 79 older planes, including the less efficient Boeing 767s, Airbus 319s and Embraer 190s.

Air Canada said it lost $1.05 billion in its first quarter compared with a profit of $345 million in the same quarter last year as governments imposed travel restrictions around the world due to the novel coronavirus.

The loss amounted to $4.00 per diluted share for the quarter compared with a profit of $1.26 per diluted share in the first quarter of 2019.

Operating revenue fell to $3.72 billion in the quarter ended March 31, compared with $4.43 billion a year earlier, the company said.

On an adjusted basis, Air Canada lost $392 million or $1.49 per diluted share in the first quarter compared with an adjusted profit of $17 million or six cents per diluted share in first three months of 2019. The results fell 22 per cent short of analyst expectations, which had predicted adjusted earnings of $1.22 per diluted share, according to financial markets data firm Refinitiv.

Christopher Reynolds, The Canadian Press

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