AirbusCanada
Topic Author
Posts: 646
Joined: Mon Nov 15, 2004 5:14 am

Which Canadian Airline will not survive the COVID-19 Crisis

Tue Mar 17, 2020 7:03 pm

I want to start discussion on the Financial impact of Covid-19 on the Canadian Airline industry.
If we take China as a reference point, their aviation industry has been shut for about two months with no sign of relief as of mid-march.

Under similar circumstances, the Candian airline industry may see a 50%-70% reduction in passenger numbers for a full quarter if not more. In addition, there is a very high probability that both business and leisure passengers will significantly cut back their travel plans during the peak summer season even the virus situation is under control.

Now the question is who may not survive this situation :

These are my educated guesses:

1. AirCanada - Should be fine but may occur some long term debt. May come out stronger on the cost side due to lower oil prices and reduce lease rates on aircraft.
2. Westjet - similar to Air Canada.
3. Swoop - may not survive without support from the parent airline WestJet.
4. Flair airline - Most venerable.
5. AirTransat - Got Luckey with the Merger timing with Air Canada.
6. Porter - Second most venerable after Flair due to focus on a single hub. If Q400s are paid off already, they might survive by significantly reduceing capacity.
7. Sunwing: better than Porter or Flair but below Swoop in my opinion.

At the end of all this...we may lose one of our smaller airlines, which would be bad for consumers as well as employees and suppliers, but might be good for the Big 2 airlines, Air-Canada and Westjet.

Discuss away....
Last edited by AirbusCanada on Tue Mar 17, 2020 7:05 pm, edited 1 time in total.
 
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KLMatSJC
Posts: 614
Joined: Sat Oct 02, 2010 1:16 am

Re: Which Canadian Airline will not survive the COVID-19 Crisis

Tue Mar 17, 2020 7:03 pm

7. Sunwing. I already heard a rumor that they laid off their pilots and cabin crew.
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PatrickZ80
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Joined: Tue Jul 13, 2010 5:33 am

Re: Which Canadian Airline will not survive the COVID-19 Crisis

Tue Mar 17, 2020 7:34 pm

KLMatSJC wrote:
7. Sunwing. I already heard a rumor that they laid off their pilots and cabin crew.


As did many other smaller airlines around the world. Doesn't mean anything, it's probably cheaper to lay off their staff and park their aircraft than to keep flying empty planes around. Even larger airlines have reduced their staffing. And of course in all cases once everything is over the staff has the opportunity to get their jobs back.

Of course it depends how long this situation will continue. Airlines can last a while without any source of income, certainly if they cut the costs like Sunwing does. But not for too long, some costs just keep continuing. Government aid might help them through.
 
Insertnamehere
Posts: 179
Joined: Tue Jul 24, 2018 3:44 am

Re: Which Canadian Airline will not survive the COVID-19 Crisis

Tue Mar 17, 2020 7:42 pm

Porter to me seems the most vulnerable, they have a large exposure to the U.S. market with upscale leisure and business travel especially to New York that demand must have melted away.

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