Canadian aviation amid the COVID-19 pandemic: Part 1. Impact on Canadian airlines

Introduction

The COVID-19 pandemic has caused an unprecedented disruption to aviation. Air transportation is all about connecting the world through the movement of people and goods. At the start of the pandemic, the movement of people by air was essentially stopped by public health measures and travel restrictions implemented around the world to combat the spread of the virus. In response, airlines grounded their fleets and laid off employees. While passenger numbers and revenues both dwindled, high fixed costs remained, resulting in financial losses. A number of airlines around the world had to file bankruptcy,¹ while others have been kept on financial life support from governments.²

Beyond the airlines, the pandemic touched every aspect of aviation. For instance, airports and air navigation service providers lost revenue as the number of passengers and flights decreased. Flight training units in many countries, including Canada, were closed for a period of time as “non-essential” businesses. General aviation activity declined as people were asked to stay home.

This is the first in a series of articles looking at the impact of COVID-19 on aviation in Canada and examining whether there are signs of recovery up to the end of 2021. This first article focuses on Canada’s large and medium airlines and finds that passenger airlines bore the brunt of the impact. It also examines the change in airline operations, such as the shift from passengers to cargo during the pandemic. For example, the volume of cargo transported did not decline nearly as much as passenger numbers, and the proportion of total revenue that is generated from cargo operations increased significantly.

Continue reading