Air Canada CEO urges Ottawa to relax ‘stifling’ travel restrictions

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Air Canada’s chief executive officer says the Trudeau government should loosen travel restrictions because they are excessive and “stifling” the recovery of both the airline sector and the economy.

Measures undertaken by Canada, as well as certain other governments to limit the movement of people in the face of the coronavirus pandemic, are too broad and represent “the most challenging impediment” to getting planes flying again and stoking growth, Calin Rovinescu said.

“It strikes me as being a combination of disproportionate steps, things that are really stifling the return to a more normalized aviation environment,” Mr. Rovinescu said Thursday in a webcast organized by trade publication Aviation Week. “And quite frankly, stifling an economic recovery.”

The comments mark the latest pushback from Corporate Canada against the federal government’s response to the COVID-19 health crisis. On Thursday, several travel and tourism industry leaders, including Mr. Rovinescu, published an open letter in newspapers calling for the federal governments and the provinces to ease travel restrictions.

The leaders, grappling with a loss of revenue that has crippled their businesses and prompted them to lay off thousands of workers, said Canada needs a more targeted approach to international travel like Germany, France and other countries have taken. And they said limits on interprovincial travel should be removed.

Nearly 100,000 Canadians have tested positive for COVID-19 and almost 8,000 people have died. The number of new cases has been in decline but health officials are still recommending against any non-essential travel. Meanwhile, provinces are in different stages of reopening their economies and public-health guidance varies, but most are still urging their residents to stick close to home.

Prime Minister Justin Trudeau’s government has put in place a series of measures since March in a bid to halt the spread of COVID-19. Anyone returning to Canada is subject to a mandatory 14-day quarantine. The border with the United States has been closed except for essential travel and trade.

The Air Canada CEO acknowledged Canada is not the only place where such policies are in place. But he singled out his home country for what he called “clumsy” border restrictions, quarantines, travel advisories and “all sorts of spanners” preventing a more solid restart of air travel.

“We cannot put our heads in the sand and think that the virus is going to miraculously go away next month or in September or in December or next June. We know we have to work alongside it,” Mr. Rovinescu said. A “more thoughtful approach” is needed by Canada and certain other countries if the industry is to recover, he said.

Air Canada has laid off about 20,000 employees and halted all but about 10 per cent of its flights. WestJet Airlines has slashed its schedule while Air Transat, Porter Airlines and Sunwing Airlines have halted operations amid government-imposed border closings and stay-at-home orders aimed at slowing the deadly virus.

Amy Butcher, spokesperson for federal Transport Minister Marc Garneau, defended the government’s handling of the COVID-19 crisis and said its absolute priority is the health and safety of Canadians. “We know that airlines are facing significant challenges, and we will continue to engage with them and closely monitor the situation in the hard-hit aviation sector. As different regions across Canada begin to reopen, we will take a safe, prudent and collaborative approach, guided by science and public-health experts,” Ms. Butcher said.

Deputy Prime Minister Chrystia Freeland told reporters on Wednesday there was no rush to lift the ban on non-essential travel to and from the United States. Coronavirus cases are rising south of the border, with some of the increase likely tied to the reopening of businesses and the lifting of stay-at-home orders. Cases are climbing in nearly half the states, according to an Associated Press analysis, a worrying trend that could intensify as people return to work and venture out during the summer.

“We believe in acting out of an abundance of caution,” Ms. Freeland said. “It’s very important not to squander the gains that Canadians have made. We’re going to be taking that careful and prudent approach when it comes to reopening our border again with the United States.“

Mr. Rovinescu said there are five specific policies in Canada hampering an air travel recovery. First, a nearly blanket ban on foreign citizens coming into the country regardless of whether they’re coming from a country with a better record in limiting COVID-19 cases. Second, the mandatory 14-day quarantine for everyone entering Canada, which he called “a total cold shower on building any kind of aviation business."

Third, the continued shutdown of the Canada-U.S. border. A source with the federal government told The Globe and Mail this week that Ottawa is expecting that the current arrangement with the United States will be extended past the current June 21 expiry date. The Globe has agreed not to reveal the identity of the source because they weren’t authorized to speak publicly on the matter.

Mr. Rovinescu said the move by some provinces to restrict people from crossing into their territory from other places in Canada is also hurting. To take one example, New Brunswick is not allowing Quebeckers to enter its jurisdiction, and in Prince Edward Island, seasonal visitors must apply for admission and then quarantine for two weeks. Finally, the Air Canada CEO took issue with federal travel advisories urging people to avoid travelling. That interferes with people’s ability to buy insurance when they travel in some cases, he said.

People have made it clear that they want to travel, Mr. Rovinescu said. He said Air Canada is working to build confidence among its customers, establishing protocols such as masks for crew and passengers and body temperature checks at departure gates.

Dozens of airlines across the world have received loans and other state aid to help them weather the coronavirus crisis. Others have been forced into bankruptcy. In Canada, carriers have received no industry-specific financial assistance.

Executives with carriers such as Montreal-based Air Transat continue to call for such aid. But Mr. Rovinescu was more nuanced, saying that while Air Canada is “somewhat envious” of the large amounts of state aid being offered to rivals, its own approach has been to try to battle the crisis on its own to the best of its ability.

The airline has raised $4-billion by selling equity and debt to withstand the crisis and it has also expanded cargo operations. Bookings are growing from a trough in April and May but it will take about three years for passenger volumes to return to 2019 levels, the CEO said.

“Our philosophy has been to keep our head down. We can control what we can control,” Mr. Rovinescu said, adding history has shown that direct government involvement with airlines has largely yielded “catastrophic” results.

“Some of the strings that are attached to some of these bailouts in other parts of the world are not necessarily things that would be particularly appealing from my vantage point,” Mr. Rovinescu said. “There’s no question that the best strength is to do it on your own. Now, the best thing that governments could do for companies like ours is to enable us to do some reasonable amount of business. And this comes squarely back to the issue of quarantines and border closures.”

It was not immediately clear whether Air Canada is asking for any specific financial aid from Ottawa. Peter Fitzpatrick, spokesman for the airline, declined to elaborate further on that point beyond Mr. Rovinescu’s remarks to Aviation Week.

Transat CEO Jean-Marc Eustache said Thursday that a lack of government financial help tailored for the airline industry makes it hard to meet customer demands for refunds on flights cancelled because of the pandemic.

Transat suspended its commercial flights on April 1, and on Thursday said it plans to resume a small number in July. The airline has not given a refund since mid-March, and like most domestic carriers is instead giving customers credits. The approach has angered customers who say they need their money back in hard financial times, and have no plans to travel in the foreseeable future.

“We fully understand that some of them have no intention or ability to travel and would like a refund,” Mr. Eustache said. “We also would like to be able to offer it to them provided the burden is not excessive.”

Airlines in the United States and Europe have been ordered to give customer refunds, and have been given government loans and grants worth billions.

Canadian aid to employers in all sectors has included loans and 75-per-cent wage subsidies, measures Mr. Eustache said are worth far less than other countries’ bailouts and were not designed to meet the needs of the airline industry, without elaborating.

“Canada has yet to come up with any specific support plan for the airline industry,” Mr. Eustache said. “So I say clearly to the various levels of government, help us find a solution that is acceptable to all stakeholders.”

With files from the Marieke Walsh in Ottawa and Associated Press