Air Canada lays off more than 5,000 but experts say companies will survive despite flight cancellations
Experts say Canadian airlines are relatively well-positioned to enter the financial storm that has been unleashed by the COVID-19 pandemic.
Air Canada, which is laying off more than 5,100 flight attendants and suspending most of its flights abroad by the end of the month, has a $7.3-billion cushion to fall back on - more than the most profitable U.S. carrier, Delta Air Lines.
WestJet Airlines Ltd. has halved its domestic capacity and cancelled all overseas and U.S. routes for 30 days. The carrier is shielded from stock marker judgment after Onex Corp. acquired it in December and the company was delisted from the Toronto Stock Exchange.
The National Airlines Council of Canada is asking for federal relief from taxes and airport fees, akin to planned government measures for carriers in Norway and New Zealand.
Jacques Roy, a professor of transport management at HEC Montreal business school, says the bankruptcy that threatens airlines around the world is extremely unlikely at Canada's two network carriers, despite “a very bad year” ahead and Air Canada's plummeting stock price.
National Bank analyst Cameron Doerksen says travel numbers had returned to normal within two years of the September 11 attacks in 2001, the SARS outbreak in 2003 and the 2008 financial crisis, though it remains unclear how long the novel coronavirus crisis will extend before the recovery period can begin.
The Canadian Press
