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Air Canada posts $1.7-billion quarterly loss as revenues plunge 89% – The Globe and Mail

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An Air Canada plane sits parked at the gate at San Francisco International Airport on June 30, 2020 in San Francisco, California.

Justin Sullivan/Getty Images

Air Canada lost $1.7-billion in the second quarter, as the pandemic and related travel bans forced Canada’s largest airline to ground planes, lay off thousands and slash passenger capacity by 92 per cent.

Revenue fell by 89 per cent to $527-million in the three months ending June 30, from $4.7-billion in the year-ago period, Air Canada said on Friday morning.

Lucie Guillemette, Air Canada’s chief commercial officer, said the airline is monitoring global travel restrictions and is slowly adding routes. The airline will fly to 91 destinations this summer, twice May’s number but half of that a year ago, Ms. Guillemette said on a conference call with analysts on Friday morning. “For the first time ever, our cargo revenue exceeded passenger revenue in the quarter,” Ms. Guillemette said.

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The carrier said it will burn through $15-million to $17-million in cash every day in the third quarter, eroding its liquidity that totaled $9-billion on June 30. Seat capacity will be reduced by 80 per cent, compared with the same period in 2019. Air Canada has raised $5.5-billion amid the pandemic, which has brought the global airline industry to the brink of failure.

Air Canada lost $1.7-billion, or $6.44 a share, compared with a profit of $343-million ($1.26) in the second quarter of 2019.

“As with many other major airlines worldwide, Air Canada’s second quarter results confirm the devastating and unprecedented effects of the COVID-19 pandemic and government-imposed travel and border restrictions and quarantine requirements,” said Calin Rovinescu, chief executive officer of Air Canada. “Canada’s federal and inter-provincial restrictions have been among the most severe in the world, effectively shutting down most commercial aviation in our country, which, together with otherwise fragile demand, resulted in Air Canada carrying less than four per cent of the passengers carried during last year’s second quarter.”

Air Canada said it increased its cost-cutting target by $500-million to $1.3-billion, by retiring 79 planes, closing regional airport operations and reducing its workforce by 20,000 people – more than half its staff – through layoffs, retirement and leaves. The company has tapped the federal government’s 75-per-cent wage subsidy for idled workers, and will use it through December, 2020.

Mr. Rovinescu told analysts the airline will make more cuts as needed, including route deletions and suspensions, and the possible cancellation of orders for Boeing and Airbus planes.

“With operations virtually shut to a stand-still, the focus for [the second quarter] was on minimizing the cash burn and preserving cash,” said Walter Spracklin, a stock analyst at Royal Bank of Canada.

The cuts have reduced the airline’s cash burn to a range of $1.3-billion to $1.6-billion in the third quarter from $1.7-billion in the second quarter, or $19-million a day. “The projected net cash burn for the third quarter of 2020 assumes that certain international borders will be reopened, that travel restrictions in a number of markets will be lifted and that passenger demand will continue to improve,” Air Canada said.

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Mr. Spracklin said Air Canada is using up more cash than he expected, and this will continue unless the airline’s calls for governments to lift travel restrictions are heeded. “The company continues to beseech the government to reopen air travel and it is our sense from the outlook that this reopening from a Canadian perspective is not occurring to the extent expected by management,” Mr. Spracklin said in a note to clients on Friday.

Air Canada, WestJet Airlines and Air Transat have added a small number of summer flights to their reduced schedules, but it is not clear people want to travel. The pandemic has caused mass unemployment in much of the world, and it is not known when a vaccine or treatment for the virus will be found.

The federal government says Canadians should avoid non-essential travel to avoid catching or spreading COVID-19, a serious health threat. Canada has closed its borders to most foreign travellers and requires anyone entering Canada to quarantine for 14 days, with a few exceptions. Some provinces have also imposed restrictions on visitors.

The International Air Transport Association, an industry lobby group, this week said failures by the United States and emerging economies to control their outbreaks, coupled with travel bans, will delay the recovery in demand for air travel to pre-pandemic levels until 2024.

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Canadian company urges human trials after COVID-19 vaccine in mice blocked virus – Global News

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A Canadian company is telling the government on Wednesday that its trials of a potential COVID-19 vaccine on animals completely blocked the virus, but it must conduct human trials to know whether it has found a possible cure for the pandemic.

And a leading health-care expert says the findings are promising even though they haven’t been peer-reviewed.

Providence Therapeutics says it needs federal funding to move forward, but it has not heard back from the Trudeau government since May, the month after submitting a $35-million proposal to conduct first-stage human trials.

Read more:
How close are we to a coronavirus vaccine?

Providence has told the government it could deliver five million doses of its new vaccine by mid-2021 for use in Canada if it were able to successfully complete human testing, but it has heard nothing.

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Eric Marcusson, the San Francisco-based co-founder of Providence and its chief science officer, says the company has concluded testing on mice that showed its vaccine was able to block the entry of the novel coronavirus into their cells.

Successful tests in animals can provide proof of the concept behind a potential new medicine or vaccine before trials in ever-larger groups of human subjects determine how well the drug works in the body and whether it has harmful side-effects.

Trials in humans are expensive and usually time-consuming.






1:38
Coronavirus: Tam agrees with Fauci, warns vaccine will not be a ‘silver bullet’ but there is reason for ‘cautious optimism’


Coronavirus: Tam agrees with Fauci, warns vaccine will not be a ‘silver bullet’ but there is reason for ‘cautious optimism’

Mario Ostrowski, the University of Toronto professor of medicine and immunology whose laboratory performed the animal trials, said he supports the results and says they are on par with tests of vaccine candidates from the American pharmaceutical firm Moderna and Germany’s BioNTech.

All three companies use the same new mRNA vaccine technology and last week, Moderna began a 30,000-person human trial after receiving hundreds of millions of dollars from the U.S. government.

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The U.S. has also committed to pay Germany’s BioNTech and its American partner Pfizer $1.95 billion to produce 100 million doses if their vaccine candidate proves safe and effective in humans.

[ Sign up for our Health IQ newsletter for the latest coronavirus updates ]

The mRNA vaccine technology involves using a key fragment of genetic material instead of working with an inactive sample of live virus.

“We have been testing the prototype vaccine in animal studies,” Ostrowski told The Canadian Press. “When we give the vaccine to mice, it is safe and makes a very strong immune response and very potent antibodies.”

READ MORE: Canada’s coronavirus restrictions could last years even with vaccine, top doctors

Ostrowski said that the strength of the antibodies found in the mice appeared to neutralize the virus better than other similar vaccine candidates have at the same testing stage.

“Another point is that the Providence vaccine is very similar to the Moderna vaccine in the U.S. and the German (BioNTech) vaccines, both showing excellent results,” added Ostrowski, who practices at St. Michael’s Hospital in Toronto.

Brad Wouters, the executive vice-president of the Toronto-based University Health Network, said he has seen the new Providence data and it looks promising, but it needs to be peer-reviewed.

“The fact that the vaccine has created neutralizing antibodies means that the mouse immune system is reacting to the vaccine and producing antibodies that block the ability of the virus to infect cells,” Wouters said in an emailed response to questions.

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“This suggests the results are better than even they were expecting.”






2:29
Tam: Pandemic may last for years, even with COVID-19 vaccine


Tam: Pandemic may last for years, even with COVID-19 vaccine

But Wouters added that the Providence data needs a full peer review, and that under normal circumstances he wouldn’t even be commenting publicly on research at this stage unless it were accompanied by a published peer review.

“This is the normal and correct way for this to happen. But as you have seen, COVID-19 is breaking traditions and they (Providence) are certainly not the first to release information from experimental research in advance of publication,” said Wouters, who is also the senior scientist at the Princess Margaret Cancer Centre.

Alberta Sen. Doug Black has urged Ottawa to fund Providence so it can develop a domestic COVID-19 vaccine to lessen the risk Canadians will have wait in line for a foreign-made pandemic cure.

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Several health-care professionals have also written to Innovation Minister Navdeep Bains to urge him to make up his mind on the Providence proposal.

The company plans to release the results publicly on Wednesday at the same time it delivers them to several relevant government departments.

Read more:
Debate begins on who gets the coronavirus vaccine first

“We’re still blocking the virus 100 per cent. Nothing gets in,” Marcusson said in a telephone interview from San Francisco, where he has been living in lockdown since March as the pandemic exploded in California.

“There’s no doubt this vaccine needs to be tested in humans because the results in mice are really that exceptional. This has the chance to be an extremely effective vaccine, but we won’t know for sure until we get into humans,” he said.

Marcusson is a 20-year veteran of the American biotechnology sector and had founded his own consultant business before meeting Providence chief executive Brad Sorenson in 2014. The two founded Providence in 2015 to develop cancer vaccines but it has pivoted to COVID-19. Marcusson said 20 per cent of his work remains outside the company as a consultant.

Black and several health experts say the government must move forward with a made-in-Canada vaccine because there have been troubling signs that a vaccine produced abroad likely wouldn’t be available to Canadians until much later.

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2:17
Coronavirus: Anti-mask and anti-vaccine theories


Coronavirus: Anti-mask and anti-vaccine theories

Canada has already funded a the partnership between China’s CanSino Biologics and Dalhousie University in Nova Scotia but China has held up shipments of the vaccine that it was supposed to send to Dalhousie researchers by the end of May to start human trials.

“They’ve already been burned a couple of times with masks not getting across the border from the U.S. and a vaccine that they helped fund not getting into the country because it was held up at customs in China,” said Marcusson.

“So, this is a vaccine that can be made in Canada for Canadians,” he added. “It would be nice if that wasn’t important, but it is important, and they need to realize this and fund a Canadian solution to this problem.”

© 2020 The Canadian Press

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Pfizer announces deal to supply Canada with coronavirus vaccine candidate – Global News

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Pfizer says it has signed an agreement with the Canadian government to supply its coronavirus vaccine.

The announcement came in the form of a tweet an hour before markets opened and two hours before a scheduled announcement from the Canadian government about vaccine procurement that is set to take place at 10 a.m.

READ MORE: U.S. inks coronavirus trial vaccine deal with Pfizer for first 100M doses

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Pfizer also last month inked a deal with the U.S. government to supply the first 100 million doses of the vaccine it is developing in December, in a partnership with BioNTech SE.

The Canadian deal also appears to be a collaboration with the biotechnology firm.

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More to come.

© 2020 Global News, a division of Corus Entertainment Inc.

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Gold price pushes well above $2000, much more upside possible – Kitco NEWS

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Editor’s Note: Get caught up in minutes with our speedy summary of today’s must-read news stories and expert opinions that moved the precious metals and financial markets. Sign up here!

(Kitco News) Gold prices are sharply higher and hit a record high of $2,048.00, basis October Comex futures, in early U.S. trading Wednesday. Silver prices are also sharply higher and hit a seven-year high of $27.195, basis September Comex futures. October gold futures were last up $35.00 an ounce at $2,043.50. September Comex silver prices were last up $0.987 at $27.03 an ounce. 

Gold and silver are continuing on a bullish rampage. Both metals continue to see support from safe-haven demand amid the worrisome rise in Covid-19 infections, geopolitical developments and concerns about problematic price inflation in the coming months. As the U.S. Congress appears to be getting closer to a new round of government stimulus payments to Americans, such would only add to the massive influx of liquidity into the world financial system, which has created the inflation concerns.

Global stock markets were mostly up in overnight trading. The U.S. stock indexes are pointed toward higher openings when the New York day session begins, including a new record high in the Nasdaq stock index. Hopes of a new U.S. government stimulus package for Americans coming soon are rising at mid-week on reports Democrats and Republicans are coming closer to agreement on a package. Rising crude oil prices that hit a five-month high overnight are also giving traders and investors a boost.

On tap Wednesday is the ADP national employment report for July, which is expected to show U.S. jobs growth of around 1 million. This report could move the markets when it’s released at 8:30 a.m. EDT.

The key U.S. data point of the week will be Friday’s jobs report for July from the Labor Department. The non-farm payrolls number is forecast to be up by around 1.25 million after rising by 4.8 million in June. However, don’t be surprised to see a miss from the forecasts, to likely move the markets.

The important outside markets today see Nymex crude oil prices higher, hitting a five-month high and trading around $42.75 a barrel. The U.S. dollar index is solidly lower today. The yield on the benchmark 10-year U.S. Treasury note is presently around 0.52% and near a record low.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the ADP jobs report, the international trade report, the U.S. services PMI, the global services PMI, the ISM report on business services, and the weekly DOE liquid energy stocks report.

Technically, the gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,100.00. Bears’ next near-term downside price objective is pushing futures prices below solid technical support at $1,950.00. First resistance is seen at the overnight high of $2,048.00 and then at $2,075.00. First support is seen at the overnight low of $2,015.50 and then at $2,000.00. Wyckoff’s Market Rating: 10.0

September silver futures bulls have the strong overall near-term technical advantage. Silver bulls’ next upside price objective is closing prices above solid technical resistance at $28.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at this week’s low of $24.16. First resistance is seen at the overnight high of $27.195 and then at $27.50. Next support is seen at $26.00 and then at the overnight low of $25.64. Wyckoff’s Market Rating: 9.5. 

Live 24 hours silver chart [ Kitco Inc. ]

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