- Calin Rovinescu, President and CEO of Air Canada, has stated that the Canadian government should provide assistance to the industry to manage the impact of COVID-19
- The company is expecting a 50 per cent reduction in passengers in the second quarter of 2020, due to travel bans and travel fears
- Since the end of February, when the outbreaks impact began, Air Canada’s share price has dropped more than 64 per cent
- The company has withdrawn its previous 2020 and 2021 guidance and has not provided new estimates
- Air Canada (AC) is down 34.33 per cent, with shares trading for C$16.70
The President of Air Canada (TSX:AC) believes government aid will be required to weather COVID-19’s impact on the airline industry.
In a lengthy address to shareholders, Calin Rovinescu, President and CEO of Air Canada, said COVID-19 was an unprecedented challenge for the industry.
Recently, European countries such as Norway and Italy have announced assistance packages for their national airlines. In his shareholder address, Calin believes Canada will need to make the same allowances.
“Under these circumstances, we believe that the Canadian airline industry should also see similar assistance, whether through forbearance of taxes, landing fees and other charges that form part of the aviation burden in Canada.
“Our industry associations have been and will continue to make these representations to governments,” he said.
Despite the request for aid, Calin went on to extol the company’s balance sheet. He believes Air Canada’s low debt levels and high liquidity will see the company through, with or without government aid.
Since the end of February, when the outbreak’s impact began, Air Canada’s share price has dropped more than 64 per cent. Looking forward, the company expects a 50 per cent reduction in passengers in the second quarter of this year.
As a result, Air Canada is implementing new COVID-19 mitigation measures to reduce the cost company-wide. The company has also scrapped its previous 2020 and 2021 outlooks and is yet to announce updated estimates.
Air Canada (AC) is down 34.33 per cent, with shares trading for C$16.70 at 2:00pm EST.