Air Canada (AC) is calling on Ottawa to further loosen travel restrictions as the carrier reported a fourth quarter 2021 loss of nearly $500 million.
Despite the big quarterly loss, Air Canada’s latest earnings topped analyst expectations as it bled less cash and said its recovery remains on course despite a severe blow to December holiday travel due to the Omicron variant of COVID-19.
Air Canada chief executive officer (CEO) Michael Rousseau demanded an end to all pre-departure COVID-19 testing rules, saying “If bars and large public events can reopen at full capacity, and some provinces such as Quebec and Ontario can put an end to the vaccination passport, there is no reason to single out travel.”
Last week, the federal health minister said Canada would lift its blanket travel advisory and the requirement for pre-departure COVID-19 molecular testing as of February 28. Also, unvaccinated children under age 12 no longer need to self-isolate upon returning to Canada.
Air Canada reported a fourth quarter net loss of $493 million or $1.38 per diluted share, compared with a net loss of $1.16 billion or $3.91 per diluted share a year earlier.
The Montreal-based company's operating revenues for the quarter ended December 31 were $2.73 billion, more than triple the $827 million recorded in the same period of 2020.
Analysts polled by Refinitiv data expected Air Canada to record revenue of $2.43 billion and a $539 million loss.
Air Canada said it cancelled 36% of its January flights based on the number scheduled in mid-October. As of late January, more than 43,300 trips had been scrapped in the first two months of this year.
Corporate travel, a key market that yields high profit margins for airlines, also continues to lag as many companies hold off on return-to-work policies.
Cargo revenue helped offset Air Canada's losses, jumping 163% to $490 million in the fourth quarter compared with the same period a year earlier.
However, jet fuel prices are threatening profit margins. The expense rose more than threefold compared to the end of 2020 due to more trips as well as a 67% increase in the global price of jet fuel.
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