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Air Canada T.AC

Alternate Symbol(s):  ACDVF

Air Canada is an airline company. The Company is a provider of scheduled passenger services in the Canadian market, the Canada-United States (U.S.) transborder market and the international market to and from Canada. It provides scheduled service directly to more than 180 airports in Canada, the United States and internationally on six continents. The Company’s Aeroplan program is Canada's premier travel loyalty program, where members can earn or redeem points on the airline partner network of 45 airlines, plus through a range of merchandise, hotel and car rental rewards. Its freight division, Air Canada Cargo, provides air freight lift and connectivity to hundreds of destinations across six continents using its passenger and freighter aircraft. Its Air Canada Vacations is a tour operator, which is engaged in developing, marketing, and distributing vacation travel packages in the outbound/inbound leisure travel market. Air Canada Rouge is Air Canada's leisure carrier.


TSX:AC - Post by User

Post by airlineinvestoron Jan 05, 2021 9:32am
396 Views
Post# 32222688

Possible Sale of Aircraft

Possible Sale of AircraftOn Dec 22nd, the CBC reported that the Canadian Gov’t, as part of a planned bailout, is considering buying five second-hand aircraft from the country’s troubled carriers to replace five Airbus A310s operated by the RCAF.  The A310s were purchased in the late 1980s and are used for VIP transport, strategic airlift and aerial refueling tankers for the CF-18.  These aircraft were formerly owned by Wardair, and were sold to the government following Canadian Airlines’ acquisition of that airline.

“Sources, whom CBC News agreed not to identify in order to discuss confidential elements of the procurement process and talks with the airline industry, said Air Canada is seen as a potential supplier for the fleet, which is used to transport cargo, troops and dignitaries such as the prime minister. Still, the sources said discussions are preliminary. Another official confirmed the government sees a possible window to inject liquidity into the airline industry at the same time as it seeks to replace its fleet of gas guzzling transport aircraft. When the government decided a few weeks ago to help the airline sector, there was a situation where it became possible to address two issues at once, namely helping the airline industry at the same time as replacing an aging and polluting fleet," the official said.  Source: CBC
 
On December 17th, the Canadian Gov’t published an invitation for suppliers to qualify to provide strategic tanker transport aircraft, for its new fleet of fighter jets.  This means that the ideal aircraft will need to have a long-range endurance capability, given that fuel for the fighter aircraft will come from the fuel tanks of the aerial re-fueller.
 
The one aircraft in Air Canada’s fleet that would easily meet this need is the Boeing 777-200 Long Range aircraft.  Air Canada has 25 Boeing 777s, and six of these are the smaller, longer range version, the 200 LRs.  The 200 LR’s range is more than 9000 nautical miles.  These aircraft are mid-life aircraft, acquired in 2007 and 2008.  Four are owned and two are leased.  Under the RCAF banner, these aircraft would fly significantly fewer hours annually, so the aircraft would have an extended life in a military role.

According to the 2019 MD&A, Air Canada’s B777-200 LRs carry 300 passengers, just two more than the Boeing 787-9 aircraft (298 seats).  While the B787-9’s range is somewhat less at 7635 nautical miles, its operating costs are significantly lower.  The removal of the B777-200 LRs would have no impact on Air Canada’s ability to operate within its current network with other fleet types.

On a separate but related subject, the Minister of Transport suggested that new rapid-testing programs for Canadian airports could be announced in the coming days.  This comment was in response to criticisms about the Government’s recent decision to require a negative Covid-19 PCR test within 72 hours of international flight departures inbound to Canada.  The new rule comes into effect on January 7th.

Last month, Delta began trialing Covid-free travel corridors on certain flights.  For example, on flights between Atlanta and Amsterdam, a Covid-19 PCR test must be done within five days of arriving in Amsterdam.  Prior to departure from Atlanta, a Covid-19 rapid test is performed, and a subsequent rapid-test on arrival at Amsterdam (if AMS is the final destination).  Provided the second rapid-test is negative, quarantine requirements are waived.

Is it possible that similar protocols may be introduced in Canada, and the 72-hour PCR test is the first step?  Air Canada introduced its trial airport testing program a few months ago, and has reported very favourable results. That program is on-going.

In the meantime, the soon-to-be imposed 72-hour PCR test requirement for Canadian entry may work to Air Canada’s favour.  International travellers inbound to Canada may prefer to travel Air Canada, given that Air Canada is the ‘national’ airline, and will have protocols in place to assist travellers in getting tested prior to departure.  It’s entirely possible that if this does occur, competitor airlines may see a drop in already sub-standard load factor and decide to temporarily discontinue flights to Canada, thereby pushing more passengers onto Air Canada aircraft.  Just a thought.
 
 
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