Air Canada cancels 30 domestic routes, closes 8 stations at regional airports

Air Canada is indefinitely suspending30 domestic regional routes and closing eight stations at regional airports across Canada because of an unprecedented drop in demand for air travel as a result ofCOVID-19.

The Montreal-based airline said Tuesdaythe cuts are being made becauseof continuing weak demand for both business and leisure travel because ofCOVID-19 travel restrictions and border closures.

The routes being cancelled are:

• In Atlantic Canada: Deer Lake-Goose Bay, Deer Lake-St. John's, Fredericton-Halifax, Fredericton-Ottawa, Moncton-Halifax, Saint John-Halifax, Charlottetown-Halifax, Moncton-Ottawa, Gander-Goose Bay, Gander-St. John's, Bathurst-Montreal, Wabush-Goose Bay, Wabush-Sept-Iles, Goose Bay-St. John's.
• In Quebec: Baie Comeau-Montreal, Baie Comeau-Mont Joli, Gasp-Iles de la Madeleine, Gasp-Quebec City, Sept-Iles-Quebec City, Val d'Or-Montreal, Mont Joli-Montreal, Rouyn-Noranda-Val d'Or.
• In Ontario: Kingston-Toronto, London-Ottawa, North Bay-Toronto, Windsor-Montreal.
• In Western Canada: Regina-Winnipeg, Regina-Saskatoon, Regina-Ottawa, Saskatoon-Ottawa.

The regional airports where Air Canada is closing its stations include:

• Bathurst, N.B.
• Wabush, N.L.
• Gasp, Que.
• Baie Comeau, Que.
• Mont Joli, Que.
• Val d'Or, Que.
• Kingston, Ont.
• North Bay, Ont.

More than two-thirds of the routes being cancelled and all eight of the regional stations are operated by Jazz Aviation, a partner ofAir Canada.

"I am saddened by the impact today's announcement will have on our employees, suppliers and the affected communities, but respect and understand the difficult choice our partner, Air Canada, has had to make," said Joe Randell, CEO ofChorus Aviation, which owns and operates Jazz.

Other changes possible

Air Canada saidit expects the airline industry will not recover from the damage incurred by the coronavirus pandemicfor three years at least, and makes it clear that Tuesday's route cancellations may not be the end of any drastic steps that may have to be taken.

"Other changes to ... network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate," the airline said.

The airline announced earlier this year that it would lay off about 20,000 workers, or more than half of its staff, as part of its plan to cut costs.

Business professor Ian Lee, of the Sprott School of Business at Carleton University inOttawa, says the move shows just how bad the outlook is for airlines right now.

"It's a recognition that they're in dire straits," he said in an interview. "The borders are still closed to the United States which, of course, is an enormous market. And their secondary market, which is Europe, is also closed."

A major blow to Atlantic Canada

"This announcement today is going to be devastating to those smaller communities across Canada, and I think there's more cuts to come," Lee said.

Monette Pasher, executive director of theAtlantic Canada Airports Association, agrees with that assessment. "It's a real step backwards in terms of connecting our region to the world, and we're disappointed about thatbut certainly understand the position," she said in an interview.

WATCH | Air Canada cancels 30 domestic routes after pandemic losses:

Air Canada cancels 30 domestic routes after pandemic losses

4 years ago

Duration 1:54

With losses approaching $2 billion, Air Canada is scrapping 30 local routes across the country, saying it simply cannot afford to keep those planes in the air. But those cuts are bad news for many on the ground, especially in Atlantic Canada. An interviewee in this story is misidentified as Sheri Somerville of the Atlantic Chamber of Commerce. It is, in fact, Monette Pasher of the Atlantic Airports Assn. We regret the error.

Air Canada saidsystem-wide capacity was down about 85 per cent in the second quarter compared with the same quarter last year, and the airline expects capacity in the third quarter to be down 75 per cent compared with the third quarter of 2019.

The airline lost more than $1 billion in the first quarter, and burned through $688 million in cash in March alone.

"You don't need to be a strategist in a business school or an accountant to understand if you're burning $22 million a day and you've a very negligible revenue flowing in, you are a prime candidate for bankruptcy," Lee said.