Air Canada has suspended more than 800 employees for not being fully vaccinated against COVID-19 in line with federal rules.
The vast majority of Air Canada’s 27,000 cabin crew, customer service agents and others have received both shots, chief executive Michael Rousseau said Tuesday.
“Our employees have done their part, with now over 96 per cent fully vaccinated,” he said on a conference call with investors. “The employees who are not vaccinated or do not have a medical or other permitted exemption have been put on unpaid leave.”
The layoffs are “across the company” rather than concentrated in any particular job, spokesperson Peter Fitzpatrick said in an email.
The proportions align with those at WestJet Airlines, where fewer than four per cent of workers — fewer than 300 out of 7,300 — are unvaccinated, the company said in an email.
Prime Minister Justin Trudeau announced last month that as of Oct. 30, Ottawa would require federally regulated air, rail and shipping companies to establish mandatory vaccination policies for employees.
Leisure bookings have recovered, but not business travel
Air Canada said it sees hope on the horizon as revenues soared over 2020 levels last quarter amid stronger sales for winter, despite continuing to operate far below pre-pandemic capacity and at a loss of hundreds of millions of dollars.
Domestic leisure bookings have bounced back, prompting a recall of more than 10,000 laid-off employees since the start of the year — 6,500 of them since July. But business travel remains down across the board due in part to the persistence of remote work, executives said Tuesday.
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“We’re witnessing a strong rebound in VFR (visiting friends and relatives), and leisure traffic remains strong, specifically within North America, across the Atlantic and to sun destinations,” chief commercial officer Lucie Guillemette said on the conference call.
“We were pretty confident that come 2022 corporate Canada returns to their offices and business travel should return. But no doubt that for us, business has lagged a little bit.”
Revenue nearly tripled year over year to more than $2.1 billion in the quarter ended Sept. 30, beating expectations by more than 15 per cent, according to financial markets data firm Refinitiv. Capacity also increased by 87 per cent.
But revenue fell more than 60 per cent short of Air Canada’s third-quarter figures in 2019 while capacity remained two-thirds below, as COVID-19 fallout continues to dent carriers’ bottom lines.
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‘No textbook on this type of recovery’
“There’s no textbook on this type of recovery, or any in the history,” said Rousseau, who took over as CEO in February.
“There’s no doubt we’re very encouraged by what we see. And there’s no doubt that the length of the recovery has moved in from the consensus of 2025 to at least 2024 and maybe 2023.”
In its outlook, the Montreal-based airline said it plans to expand its fourth-quarter capacity by about 135 per cent compared with the same period in 2020. However, that capacity — calculated using an industry metric called available seat miles — will barely reach half the amount of its pre-pandemic level.
Net cash flow of $153 million was well above analyst expectations of cash burn of up to $460 million. It marked the first quarter Air Canada has enjoyed cash flow in the black since the onset of the pandemic.
Rousseau also stressed a record cargo performance of more than $1 billion so far this year. The carrier began to shift toward air freight last spring, converting several of its retired Boeing 767 jetliners to cargo aircraft.
With fewer flights and less freight being transported in the luggage compartments of passenger planes, the price of shipping cargo by air has increased. Other airlines such as American Airlines and United Airlines also began operating cargo-only last year, hoping to use the opportunity to stem their losses.
Rising fuel prices will impact recovery
Robert Kokonis, president of Toronto-based consulting firm AirTrav Inc., called Air Canada’s results “a tremendous source of optimism.”
However, rising fuel prices and the pace of business travel’s revival remain areas of anxiety.
“Many employees have not returned to the office, companies are continuing to make use of virtual conferencing tools, and air travel for inter-office business and international trips continues to be restricted,” Kokonis said in an email.
“At least in the short-term, these factors will suppress demand for corporate travel, which is traditionally the highest contributor to airline top lines.”
Air Canada’s share price closed up $1.01 or 4.4 per cent at $24.02 on Tuesday.
Air Canada reported a loss of $640 million in its third quarter compared. The loss amounted to $1.79 per diluted share last quarter compared with a loss of $685 million or $2.31 per diluted share a year earlier.
Analysts had expected a loss of $554.7 million, or $1.44 per diluted share, according to Refinitiv.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
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