(Reuters) - Air Canada (TO:AC) on Monday posted a bigger-than-expected quarterly loss and warned of an about 75% drop in third-quarter capacity, as the COVID-19 pandemic-triggered lockdowns kept people at home.
Canada's largest carrier has suspended financial forecasts through 2021 and adopted a government wage subsidy in a bid to keep its employees on payroll as it wrestles with economic fallout from the health crisis.
Chief Executive Calin Rovinescu said Air Canada is working on a restart plan, although the carrier expects it will take at least three years to recover to 2019 levels of revenue and capacity.
"We're now living through the darkest period ever in the history of commercial aviation," Rovinescu told analysts.
Rovinescu said earlier in a statement the COVID-19 impact was exacerbated in March with mandated social distancing, travel restrictions in Canada and around the world, and the shutting down of economies.
Montreal-based Air Canada is also accelerating the retirement of 79 older aircraft from its fleet.
"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."
Air Canada Chief Commercial Officer Lucie Guillemette announced additional steps to prevent the spread of coronavirus: passengers will be subject to an infrared temperature check ahead of boarding, and the carrier would block sale of adjacent economy seats until June 30.
Global airlines - among the sectors hardest-hit by the pandemic - have grounded jets, canceled flights and suspended dividends and share buybacks among measures to shore up cash. U.S. carriers United Airlines (O:UAL) and American Airlines (O:AAL) both reported quarterly losses last week.
On Saturday, Berkshire Hathaway Inc (N:BRKa) said it its stakes in the four largest U.S. airlines in April, saying “the world has changed” for the aviation industry.
Air Canada has forecast an 85%-90% decline in second-quarter capacity.
The company reported an adjusted net loss of C$392 million ($277.97 million), or C$1.49 per share, in the first quarter ended March 31, compared with a profit of C$17 million, or 6 Canadian cents per share, a year earlier.
Analysts on average had expected a quarterly loss of C$1.22 per share, according to IBES data from Refinitiv.
Operating revenue fell 16.1% to C$3.72 billion.
