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Air Canada halves capacity, withdraws guidance amid 'severe drop in traffic'

Last Updated Mar 16, 2020 at 12:04 pm PDT

An Air Canada Boeing 737 Max aircraft arriving from Toronto prepares to land at Vancouver International Airport in Richmond, B.C., on Tuesday, March 12, 2019. Air Canada is cancelling an order for 11 Boeing 737 Max aircraft amid ongoing questions about the safety of the grounded jet. THE CANADIAN PRESS/Darryl Dyck
Summary

Chief executive Calin Rovinescu says COVID-19 is presenting the global airline industry with 'unprecedented challenges'

Air Canada says capacity reduction in Pacific markets for the month of April will likely hit 75 per cent

MONTREAL — Air Canada says it is halving its flight capacity in the second quarter and withdrawing its earnings forecast for 2020 and 2021 amid a “severe drop in traffic” due to the novel coronavirus.

Chief executive Calin Rovinescu says COVID-19 is presenting the global airline industry with “unprecedented challenges.”

The Star Alliance Group, which includes Air Canada, on Monday called on governments and stakeholders offer assistance to the airline sector.

Air Canada says capacity reduction in Pacific markets for the month of April will likely hit 75 per cent.

The Montreal-based company says lower jet fuel prices along with cost-saving measures such as layoffs will offset up to 60 per cent of its total revenue loss for the second quarter.

Last month, Air Canada said it expected a “small increase” in adjusted earnings for 2020, based largely on the assumption that its cancelled routes to China and Hong Kong would be fully recovered by the third quarter.