Air Canada reports wider loss

COVID-19 restrictions limit travel demand

Air Canada on Friday reported its fifth straight quarterly loss as tough government restrictions aimed at curbing the spread of COVID-19 weighed on air travel and drove the company to secure a C$5.9-billion government aid package.

Speaking on an investor call, Air Canada executives said they assume the country's travel restrictions, which have been more strict than those implemented in the neighbouring United States, will ease somewhat by the fourth quarter.

Once that happens, they said travel patterns should be similar to those in the United States, where a fast vaccine rollout and falling numbers of COVID19 cases have driven a surge in travel demand.

Meanwhile, the Montreal-based airline is focusing on cargo and domestic flights while slashing capacity for international travel and cutting costs.

Air Canada projects a net cash burn of between $13 million and $15 million per day in the second quarter of 2021.

Operating revenue fell to $729 million in the first quarter from $3.72 billion a year earlier.

Canada's largest carrier reported a loss of C$1.30 billion, compared with C$1.05 billion. Its shares rose 1.3 per cent in early trading.

Hopes that travel restrictions would loosen in time for the peak summer travel season are fading as Canada grapples with a third wave of coronavirus infections.

Only Canadian citizens, residents and essential workers can enter the country. Those entering must complete a 14day quarantine, and people entering by air must spend up to three days of the quarantine in a hotel, a measure chief executive Michael Rousseau called on the government to remove.

"The current mandatory hotel quarantine for arrivals has proven ineffective. It should be eliminated," he told investors.