Air Canada takes off from North Bay amid mounting losses

Local politicians were left scrambling this afternoon following news of sweeping Air Canada cuts with a direct impact on North Bay.

Air Canada has announced it is indefinitely suspending service on 30 domestic regional routes and closing eight stations at regional airports in Canada, including the station in North Bay.

Mayor Al McDonald was just learning of the Air Canada cuts when contacted by BayToday. Communications Officer Gord Young indicated McDonald would field questions from the media later this afternoon.

See related story: Airport will remain open despite more Air Canada local flight cancellations

North Bay City Councillor Mike Anthony remarked, "COVID-19 fallout continues — this one hits hard," in a Facebook post. "There was no warning, and our airport management, our senior city staff and Mayor are already scrambling to contact them for more information."

Air Canada says in a release these structural changes to its domestic regional network are being made "as a result of continuing weak demand for both business and leisure travel due to COVID-19 and provincial and federal government-imposed travel restrictions and border closures, which are diminishing prospects for a near-to-mid-term recovery." 

Air Canada expects the industry's recovery will take a minimum of three years, therefore other changes to its 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."

As a result of COVID-19, Air Canada reported a net loss of $1.05 billion in the first quarter of 2020, including a net cash-burn in March of $688 million. The carrier reports it has undertaken a range of structural changes including significant cost savings and liquidity measures, including today's announced service suspensions.

Station Closures

The following are the Regional Airports where Air Canada is closing its stations:

• North Bay (Ontario)
• Bathurst (New Brunswick)
• Wabush (Newfoundland and Labrador)
• Gaspé (Quebec)
• Baie Comeau (Quebec)
• Mont Joli (Quebec)
• Val d'Or (Quebec)
• Kingston (Ontario)

Route Suspensions

The following routes will be suspended indefinitely as per applicable regulatory notice requirements. Affected customers will be contacted by Air Canada and offered options, including alternative routings where available.

Quebec/Ontario:

• North Bay-Toronto
• Baie Comeau-Montreal
• Baie Comeau-Mont Joli
• Gaspé-Iles de la Madeleine
• Gaspé-Quebec City
• Sept-Iles-Quebec City
• Val d'Or-Montreal
• Mont Joli-Montreal
• Rouyn-Noranda-Val d'Or
• Kingston-Toronto
• London-Ottawa
• Windsor-Montreal

Western Canada: 

• Regina-Winnipeg
• Regina-Saskatoon
• Regina-Ottawa
• Saskatoon-Ottawa

Maritimes/Newfoundland and Labrador:

• 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

Air Canada will also take other measures including:

• A workforce reduction of approximately 20,000 employees, representing more than 50 per cent of its staff, achieved through layoffs, severances, early retirements and special leaves;
• A company-wide Cost Reduction and Capital Deferral Program, that has to date identified around $1.1 billion in savings;
• A reduction of its system-wide capacity by approximately 85 per cent in the second quarter compared to last year's second quarter and an expected third quarter capacity reduction of at least 75 per cent from the third quarter of 2019;
• The permanent removal of 79 aircraft from its mainline and Rouge fleets; and,
• Raising approximatively $5.5 billion in liquidity since March 13, 2020, through a series of debt, aircraft and equity financings.

Air Canada adds further initiatives are being considered.