Thank you very much, Mr. Chair and honourable members of the committee.
My name is Howard Liebman. I am the senior director of government and community affairs at Transat, and I represent Air Transat.
With me today to help in answering your questions is Captain Dave Bourdages, vice-president of in-flight service and customer experience at Air Transat. Captain Bourdages is our airline operational lead in dealing with the COVID-19 emergency and recovery efforts.
Transat is a leading integrated international tourism company specializing in holiday travel, founded in 1987. It offers vacation packages, hotel stays and air travel under the Transat and Air Transat brands to some 60 destinations in the Americas and Europe. Transat is firmly committed to sustainable tourism development, as reflected in its multiple corporate responsibility initiatives over the past 12 years, and was the first tour operator to be awarded Travelife certification, in 2018.
Based in Montreal, the company has approximately 5,000 employees, of which a high point of 85% were forced to be laid off as a result of the crisis. Air Transat is the second-largest operator of international passenger airline services in Canada, with a fleet of 40 large commercial airliners. Our core market and business strategy are based on a point-to-point international flight network, primarily in the leisure travel segment, and that has been decimated by the crisis.
I respectfully remind the honourable members of this committee that air transport is a vital component of our national transportation infrastructure and a locomotive for the Canadian economy. Aviation-enabled travel and tourism facilitate and support over one million jobs in every region of our country, far more than any other industry in the private sector. This critical part of our national economy has suffered the brunt of the economic harm brought on by the pandemic, and without robust government support and a focused strategy for reopening borders, it will suffer irreparable harm. In short, there is no national economic recovery without aviation and tourism actively helping to propel it forward.
I would now like to briefly share with you the details of our company's operational response to COVID-19 and the severe financial stress that the pandemic is placing on our business. I will also outline our plans going forward as we prepare for a safe, smart and measured restart.
With the onset of the pandemic in Canada in mid-March and the swift government pronouncement of international travel restrictions on non-essential travel, travel bans and quarantine measures, complemented by provincial orders closing businesses, Transat moved quickly into a repatriation operation. Air Transat flights operated during the last two weeks of March were mainly intended for the repatriation of Transat customers back to Canada or their country of origin.
While sales and revenues completely collapsed, we operated hundreds of previously scheduled and special flight segments at a cost of tens of millions of dollars, most of them departing Canada empty, ultimately repatriating some 65,000 clients home in a period of just two weeks. We also partnered with Global Affairs to operate six dedicated repatriation charter flights. Additionally, Transat donated supplies of PPE—namely, 44,000 masks and 300,000 pairs of gloves—to the Quebec government on April 2 to assist with the urgent supply needs in our communities at the time.
Unique among today's panel, Transat suspended all of our flights and operations completely as of April 1 in the face of Canadian and worldwide travel restrictions and border closures to non-essential travel, and the resulting unprecedented revenue collapse and ongoing market uncertainty, to preserve our liquidities and protect the long-term viability of our business. Ours is a highly capital- and labour-intensive industry, and our commercial planning and strategy were never intended to deal with such extreme market conditions. We were certainly not alone in this respect.
As a resilient 33-year-old company that has successfully weathered many challenges and storms in the past, we took action. In March, we drew down on a $50-million revolving credit facility. Senior executives and the board have voluntarily reduced compensation ranging from 10% to 20%. The retirement of all of our Airbus A310 aircraft from our fleet occurred in March.
As mentioned earlier, 85% of our staff had been laid off. However, on April 16, Air Transat took advantage of the emergency wage subsidy, which was extended to all of our laid-off staff. We are actively renegotiating contracts with suppliers and aircraft lessors.
As noted, the travel and tourism industry are most directly and severely impacted by the pandemic. Consequently, the UN World Tourism Organization has issued a call on governments and international organizations to include travel and tourism as a priority in recovery plans. In Canada, leading travel and tourism organizations formed the Canadian travel and tourism round table, now joined by business leaders beyond our industry, which has called on the federal and provincial governments to remove travel restrictions as soon as possible based on established safe restart and recovery protocols.
Indeed, the International Civil Aviation Organization recently published the recommendations of a special state working group, which includes Canada, that would serve as a road map for its 200 member states for the safe restart of air transportation operations worldwide. These include protocols that seek to maximize biosecurity during all aspects of the airport and air travel experience and minimize the risk of further contagion. Captain Bourdages can provide further details, as necessary.
The federal government thereafter established an interdepartmental working group of experts, led by Transport Canada, which is working with industry experts, including Canada's major airlines and airports, to incorporate these recommendations into a national plan. It's imperative that this plan be approved for implementation and that it form the basis of properly risk-managed decisions to be taken regarding the loosening of non-essential travel restrictions and quarantine requirements.
Furthermore, we are fully mindful that numerous regions of the world remain problematic in terms of their infection rate trends, and the restart must not be a facilitator for the import of this contagion into our country. This is why many countries are now actively considering the implementation of safe-to-safe air corridors based on mutually recognized and robust national restart strategies, ideally based on the ICAO harmonized principles.
We strongly urge the federal government to actively pursue a similar strategy and to immediately initiate bilateral discussions to this end with Canada's key travel country partners that have shown sustained improvement in negative infection trends, including the European Union, the U.K., Mexico and other countries of the Caribbean and Latin America that have demonstrated minimal infection rates.
Third, it is essential that consideration by cabinet regarding the removal of non-essential travel restrictions be fully integrated with the lessening of quarantine requirements, especially with safe travel corridor partner countries. Indeed, in the context of restarting and promoting visitor and tourist travel to Canada, it rapidly becomes a moot point if we continue to require self-isolation for discretionary travel. This is a particularly important point for Air Transat, as mentioned at the outset, as a leisure travel operator.
Fourth, leisure travellers will stay home if they do not have access to insurance that could cover COVID-related illness and treatment. Insurance companies in Canada are currently denying such coverage to travellers. Fortunately, it is our understanding from the insurance industry that this can be remedied by reducing or eliminating Canada's level 3 global travel advisory to avoid all non-essential travel, especially with safe corridor countries. We therefore request Global Affairs Canada to actively undertake to review and adjust its advisories accordingly, in conjunction with the above-mentioned safe restart and travel corridor strategies.
Transat is doing its part corporately as well for the health and safety concerns of our customers by creating Traveller Care, a comprehensive end-to-end program featuring enhanced health and safety measures at all points of contact.
On the basis of the above, we have cautiously proceeded to announce the gradual resumption of a small percentage of flight and tour operating activities on July 23, including service to 18 destinations in Europe and the Caribbean as well as domestic services between Montreal, Toronto, Vancouver and Calgary. The success of these operations will be directly dependent on expeditious government action as requested herein, which in turn will allow for even more robust services as we move through the summer and into autumn.
Thank you again for inviting me here today. Captain Bourdages and I look forward to the discussion.