Good afternoon, Chair and members of the standing committee. Thanks for allowing us the opportunity to be here this afternoon with you. Given this is the Standing Committee on Health, I trust everyone is well and safe.
My name is Ferio Pugliese. I am the senior vice-president of government relations and Air Canada Express at Air Canada. I am pleased to join you here to discuss the Canadian response to the COVID-19 pandemic. I am joined by my colleague, Dr. Jim Chung, who is Air Canada’s chief medical officer. He and I will try to divide our time with opening remarks and then be available to answer your questions.
As we all know, the impact of the pandemic has been unprecedented. Not only has this novel disease negatively affected the health of individuals, cities and countries, it has also ground economies to a halt, undermined trade relationships, closed borders and reduced passenger travel between countries in a way that many of us never thought possible. At this stage, Air Canada has had a front row seat in all of this.
As Air Canada followed the disease in China in late 2019 and early 2020, we began to see travel demand between the two countries drop significantly. This forced us to cut back service to China at a significant cost. In fact, we were one of the first North American airlines to do so. Continued monitoring of the World Health Organization’s daily reports and those of our health partner BlueDot made us realize that the situation was more dire than many cared to admit.
As cases of COVID-19 began to appear outside China and with little information about the nature of the disease, Air Canada’s executive team made the decision to cease all operations to China, following a travel advisory issued by the Government of Canada. This took place on January 29, 2020, one full day before the World Health Organization declared a public health emergency of international concern, and well before the WHO declared a pandemic on March 11, 2020. It's important to note that Chinese carriers continued to operate to Canada during this period.
Over the course of February, we saw air travel demand drop by even larger numbers, with cancellations of existing bookings increasing in lockstep. Our sector was unique in that we were witnessing and feeling the economic impact ahead of almost any other industry or sector, except for maybe hotels and tour operators, and well before the pandemic declaration.
In addition to this fear-induced drop in demand, governments around the world began to impose travel restrictions and border closures that would physically limit travel options. By mid-March, easily one of the busiest air travel periods of the year, our operations were a fraction of what they had been the year prior, and worse, domestic and international advance bookings were almost zero.
Sadly, after 10 years of growth and recognition as one of the best airlines in the world, Air Canada was reduced to 5% of operations year over year, essentially a 95% reduction. As a result, we made the difficult but necessary choice to lay off over 20,000 employees, more than 50% of our workforce, and reduce our global network from 220 destinations to 46.
Given that Canadian border restrictions and quarantine policies remain in place, there is little hope of a near-term recovery, although we are taking steps to rebuild our network and continue to lobby to lift these restrictions.
Even as our day-to-day operations were being scaled back, we took steps to assist in the national effort to combat the crisis by doing what we do best: fly people and cargo. In March and April, in collaboration with Global Affairs Canada, we repatriated more than 300,000 Canadians through our regularly scheduled flights and specially arranged repatriation flights. In total, we operated 21 dedicated repatriation flights. Our crews deserve our thanks.
To quote Minister Champagne, “Air Canada played a vital role in bringing thousands of our fellow Canadians home." I want to thank them on the public record for their tireless effort, compassion, dedication and professionalism during these demanding missions.
In addition to repatriating Canadians, Air Canada took steps to scale our cargo operations and assist in strengthening the supply chain to secure equipment for the health network.
Since the end of March, we have operated more than 1,500 of these cargo-only flights and transported hundreds of tonnes of medical equipment. It is important to note that cargo also plays a critical role in the global economy and our own national economy.
At this stage, Air Canada is in recovery mode. We're learning how to deal with this disease. We are not only taking steps to address COVID-19 concerns, but also working with domestic and international partners to ensure that air travel continues to be a safe alternative for travel. In conjunction with world health organizations and authorities, many countries like France, Germany, Portugal, Japan and Australia are now implementing plans to reopen borders to bring back trade and tourism to their economies.
Air Canada alone contributes $50 billion to the Canadian economy through these activities, to say nothing of the entities in the supply chain. Canada, we believe, now needs to work with stakeholders to urgently take steps to reopen its borders, ease travel restrictions and quarantine requirements, both domestically and internationally, in a very measured and prudent fashion. Otherwise, our sector and the Canadian economy would suffer far longer than they need to.
I will stop my remarks there and turn the floor over to my colleague, Dr. Jim Chung.