We have seen this trend a lot lately. The impact of a near total reduction in airline travel is prompting carriers to retire planes much earlier than planned. It makes good business sense as older planes are less fuel efficient and require more maintenance. American Airlines just got rid of five fleets and now Air Canada says it will retire 79 aircraft early.
Yesterday’s conference call with Calin Rovinescu, President and Chief Executive Officer of Air Canada was very eyeopening. Air Canada has reduced second quarter 2020 capacity by 85 to 90 per cent when compared to 2019’s second quarter. And the third quarter 2020 capacity is expected to be reduced by approximately 75 per cent when compared to the third quarter of last year. Furthermore, the airline is hunkering down for the long haul (no pun intended).
Rovinescu was frank in explaining that, “while the duration of the pandemic and its fallout remain unknown, it is our current expectation that it will take at least three years to recover to 2019 levels of revenue and capacity. We expect that both the overall industry and our airline will be considerably smaller for some time, which will unfortunately result in significant reductions in both fleet and employee levels.” Sobering words.
The world of travel is changing and Air Canada is trying to keep up with the chaos.
In response to this new reality, he said that Air Canada would accelerate the retirement of 79 older aircraft from its fleet – Boeing 767, Airbus 319 and Embraer 190 aircraft, with the Embraer aircraft exiting the fleet immediately. The retirement of these three aircraft is designed to simplify the airline’s overall fleet, reduce its cost structure, and lower its carbon footprint.
In reality, this also means less routes and less capacity, as Air Canada is also being significantly impacted by the grounding of the Boeing 737Max as they bet heavily on that plane. Cutting the Embraer 190 will probably most impact transborder flights with the US, while getting rid of the B767 will impact their transcontinental routes and some Air Canada Rouge flights. Air Canada recently was operating B767s with lay flat seats in the older pod-style. These were a bit dated but great for Toronto to LA or San Francisco flights.
We can’t say that we will miss the A319 but have nice memories of flights to London, Tokyo and Frankfurt over the years when Air Canada relied on the B767 as their workhorse.