Canada's largest airline Air Canada is seeing some "sectors performing out west from a corporate point of view" company chief commercial officer Lucie Guillemette acknowledged to analysts and investors. After a two week period in Jun-2020 when booking velocity was rather flat, Air Canada is now seeing a little bit of a rebound in its domestic network, said Ms Guillemette, but like other airlines this is almost exclusively led by the leisure sector.
The return of corporate travel is "also influenced somewhat by the practices and policies of when banks and other organisations are returning to work," said Air Canada CEO Calin Rovinescu. "And as you see, some organisations are now planning not to return to work until early 2021. And so that has a bit of a moving target in terms of the return of corporate travel," he explained.
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Air Canada, meanwhile, continues to be challenged by Canada's tight travel restrictions that have largely been in place in since Mar-2020. Those restrictions include a blanket restriction on all foreign travellers, the closure of the Canada-US border, blanket quarantine rules and interprovincial travel barriers. All travellers entering Canada, including Canadians, must quarantine for 14 days.
It remains to be seen when those restrictions will ease, but Air Canada continues to urge the government to adopt a science based approach in its evaluation of travel boundaries going forward. "Canada needs to find a responsible way to coexist with Covid-19 until there is a vaccine", Mr Rovinescu stated. He added the airline has entered into partnerships with private testing firms, and have made specific science-based proposals to government to ease some of these restrictions.
Air Canada reduced capacity by 92% year-on-year in 2Q2020 and Mr Rovinescu acknowledges that the declines in revenue of nearly -90% and in passengers of over -96%, "should reinforce the tremendous urgency for governments in Canada to take reasonable steps to safely reopen our country and restore economic activity". He says: "other jurisdictions globally are showing it is possible to safely and responsibly manage the complementary priorities of public health, economic recovery and job preservation and creation".
The carrier expects capacity to fall by approximately 80% in 3Q2020, compared to previous estimations of 75%. Air Canada attributes this change in capacity estimations to the continued extension of blanket travel restrictions in Canada.
Until such time that conditions improve, Ms Guillemette said the carrier has the opportunity to "bolster some of the interline agreements" that it currently has and "also develop new ones as the Covid [19] environment continues". She warned the carrier does not expect to return to international markets "for several years", although these markets are "still available to us".
This would be achieved by simply "connecting over another trans-Atlantic gateway" and as such Air Canada is "pursuing opportunities with other interlines that can give us feed on some of the markets that we operate," says Ms Guillemette. She adds that a similar also "holds true for Asia" and there opportunities "for example, in Japan, to expand some of our interline agreements".
Whatever the outcome on returning demand, this will not impact Air Canada's plans for its Aeroplan loyalty programme. Mr Rovinescu confirms Aeroplan is "not going to be influenced at all by what we're seeing in terms of short term corporate travel demand". He notes that Aeroplan is a "long term investment", and the carrier will still continue with plans to roll out features. He observed: "Even in the height of the pandemic, we had some of our loyal Aeroplan members purchasing points on a discounted basis for future travel and so on and so forth".