Turbulence: Canadian Airlines in the Wake of COVID

The airline industry has evolved into a hierarchy of integrated networks seamlessly connecting local and regional with national and international services. Indeed, this very interconnectivity was instrumental in the rapidity by which the COVID-19 contagion spread across the world. In the wake of the pandemic however, the industry was crippled by border closures, travel restrictions and public health measures. The paper examines trends in the Canadian airline industry to quantify this impact. After a brief context, the paper presents selected operating and financial metrics and then compares the industry downturn to other events that affected passenger airlines as well as to other countries in order to gauge the impacts. The impact of the COVID-19 pandemic on the Canadian airline industry has been catastrophic with the dramatic decline in air travel forcing airlines to cut capacity drastically, or even to suspend operations in some cases. Even so, load factors remain at historic lows and well below break-even levels. The loss of revenue and inability to cut expenses by the same proportion due to high fixed or terminal costs have resulted in enormous financial losses, while tens of thousands of employees have been left without jobs. The impact stemming from the pandemic is unprecedented and far worse than what was experienced during previous crises, including from the events of September 11, 2001 and during the SARS outbreak in 2003. With a heavier reliance on international connectivity, Canadian airlines have also fared worse than some other countries with larger domestic markets. At the time this paper was prepared, the federal government was in discussions with the Canadian airline industry on the matter of financial compensation.

• Order URL:
  • https://ctrf.ca
• Authors:
  • Mordvinova, Valeriya
  • Snoddon, Cory
  • McKeown, Lawrence
• Conference:
  • CTRF 56th Annual Conference - Ensuring Resilience in Transportation Systems: Anticipating and Responding to Pandemic, Climate, Demographic and Economic Changes
• Publication Date: 2021-5

Language

• English

Media Info

• Media Type: Digital/other
• Features: Figures; References;
• Pagination: 7p

Subject/Index Terms

• ITRD Terms: 1126: Air transport; 8018: Canada; 8525: Conference; 285: Demand (econ); 263: Economics of transport; 204: External effect; 2134: Illness; 9034: International
• Subject Areas: I10: Economics and Administration;

Filing Info

• Accession Number: 01888493
• Record Type: Publication
• Source Agency: Transportation Association of Canada (TAC)
• Files: ITRD, TAC
• Created Date: Jul 21 2023 5:21PM