Porter, Transat move to suspend all flights as border closes to contain COVID-19

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This article was published 18/03/2020 (2417 days ago), so information in it may no longer be current.

MONTREAL – Porter Airlines has joined Transat AT Inc. in moving to suspend all flights while Air Canada is suspending most of its international and U.S. transborder flights in response to governments closing the border.

Porter said Wednesday it will cancel flights on all 29 of its planes at the close of operations Friday, with plans to resume service June 1.

CEO Michael Deluce said the move will trigger layoffs.

“A temporary suspension of all flights allows the public health crisis to diminish and then time to restart our operations,” Deluce said in a statement. “It is regrettable that this situation requires us to issue temporary layoffs across the business.”

Rebooking fees will be waived, Porter said.

Earlier Wednesday, Transat announced it will gradually suspend flights until April 30, halting sales for departures over the next six weeks for routes to most destinations in Europe and the United States.

The travel company, which owns Air Transat, says repatriation flights will operate during the next two weeks to bring Transat travellers back to Canadian soil.

Julie Roberts, who heads CUPE’s airline division of 15,000 flight attendants as well as its Transat component, said the union has not been informed of layoff numbers yet.

“We just know it’s going to be massive layoffs,” she said, adding that they seemed unavoidable given the widespread groundings.

“Air Transat is saying until April 30, but will the pandemic be under control by then? There’s no way to say.”

The wind-downs at Porter and Transat come as the U.S.-Canada border will be closed to non-essential traffic in both directions “by mutual consent.”

It also follows massive scalebacks by Canadian and global airlines.

Air Canada said the majority of international and transborder flights will be gradually suspended by March 31 while it still intends to serve “a small number” of international and transborder destinations from select Canadian cities after that date.

Its transborder network will be reduced to 13 airports from 53. Continued service will be to New York, Boston, Washington, D.C., Chicago, Houston, Seattle, San Francisco, Los Angeles, Denver, Orlando and Fort Lauderdale.

Air Canada’s international network will be cut to six airports from 101 as it continues to help citizens return home and support the movement of needed goods and cargo. It will operate a limited number of international “air bridges” between one or more of its Canadian hubs and the cities of London, Paris, Frankfurt, Delhi, Tokyo and Hong Kong from April 1 until at least April 30.

Its domestic network will serve all provinces and territories as the number of airports is reduced to 40 from 62 during April.

WestJet Airlines Ltd. has halved its domestic capacity and cancelled all transatlantic and U.S. routes for 30 days starting this Sunday, chopping 155 flights on Wednesday alone. Sunwing Airlines Inc. has scrubbed all southbound flights from its schedule until April 9.

The head economist at the International Air Transport Association said Tuesday that revenue losses around the world are already surpassing the trade group’s worst-case projection of US$113 billion and threatening to send multiple airlines into bankruptcy.

Transat says a date for a full halt to operations will be announced soon.

“This is an unprecedented situation, beyond our control, which is forcing us to briefly suspend all of our flights to contribute to the effort to fight the pandemic, protect our customers and employees and safeguard the company,” Transat CEO Jean-Marc Eustache said in a statement.

“We are doing everything we can so that this has as little impact as possible on our employees and customers, whom we make sure to bring back home.”

Sales are halted immediately between the Caribbean and Mexico with flights to continue for a few more days to allow repatriation.

Sales will temporarily remain open between Montreal and Paris and Lisbon as well as between Toronto and London and Lisbon to allow as many repatriations as possible, Transat said.

Desjardins Securities analyst Benoit Poirier estimates Transat’s cash burn rate at about $60 million per month, “assuming 25 per cent of total operating costs are fixed in the context of the entire fleet being grounded.”

With more than $1 billion in cash on hand, or “in trust or otherwise reserved,” Transat has enough flexibility on its balance sheet to ride out the turbulence, he said.

This report by The Canadian Press was first published March 18, 2020.

Companies in this story: (TSX:TRZ, TSX:AC)