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Strong airline industry is critical to Canada’s recovery: NACC

Strong airline industry is critical to Canada’s recovery: NACC

Wednesday, April 29, 2020

OTTAWA — The National Airlines Council of Canada (NACC), which represents Canada’s largest national and international passenger air carriers including Air Canada, Air Transat and WestJet, is urging the federal government to address airline sector challenges in the wake of COVID-19.

Noting how the strength and role of the Canadian airline industry is now under significant threat, NACC fears that Canada will fall behind other major industrialized countries in this unprecedented crisis.

It references the United States and countries across Europe, Asia and South America for having moved quickly to stabilize their respective airlines, thereby ensuring the industry can eventually return to operations and play a vital role in driving the economic recovery post-pandemic.

In an official statement, the council says: “While the National Airlines Council of Canada welcomes indications from the Government of Canada that some form of support is forthcoming, time is of the essence as the economic situation facing Canada’s airlines is deteriorating rapidly. The greater the economic damage to the industry, the less competitive and poised for recovery it will be as other countries provide significant direct financial aid to their own carriers.

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“The preservation of a viable, domestic Canadian airline sector is critical to the strength of the Canadian economy. NACC member airlines are the central component of the overall air transport and tourism sector, which collectively supports more than 630,000 jobs and is responsible for generating 3.2% of Canada’s GDP.”

The pandemic has led some carriers to suspend service to at least 35 regional communities whose local economies depend on a strong domestic airline industry.

The following are additional examples of how the Canadian aviation sector has been devasted:

  • There has been an approximate 90% drop in capacity, and the remaining flights are virtually empty.
  • With the vast majority of the fleet grounded, NACC carriers have $10 billion worth of aircraft now sitting idle.
  • Capital projects and work with suppliers across the aviation and aerospace supply chain have been stopped.
  • Revenue has all but disappeared, along with forward bookings for the rest of the year with little, if any, clarity as to when travel restrictions may be lifted or reduced. The economic impact of the pandemic is expected to continue materially for the remainder of the year and into 2021.
  • The International Air Transport Association estimates that global airline industry losses this year will be US$314 billion and disruptions to air travel from COVID-19 could result in a 39.8 million reduction in passenger volumes in Canada.
  • More broadly, the disruptions could also put at risk about 245,500 jobs in Canada and US$18.3 billion in GDP supported by the air transport industry and foreign tourists travelling to Canada by air.
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As a G7 country, says NACC’s President and CEO Mike McNaney, Canada needs a strong airline industry to help facilitate international trade and economic growth.

“Our members and their employees continue to look forward to the government acting quickly to introduce liquidity measures for the industry,” he says. “This will provide the stability needed for the aviation sector to begin planning with government the policy initiatives needed to drive Canada’s eventual economic recovery, in communities and businesses large and small across the nation, across all segments of the economy and internationally.”

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