MONTREAL —
As Canada’s airlines suspend flights to Mexico and the Caribbean, U.S. carriers including Delta Air Lines and American Airlines say they have no plans to stop offering service to sun destinations, raising questions about both the business fallout for domestic airlines and the measure’s effectiveness for slowing the spread of COVID-19.
Canadian airlines have already been losing market share over the last several months to foreign carriers, said Mike McNaney, president and CEO of the National Airlines Council of Canada. Now, however, the only routes available to certain destinations will be aboard foreign airlines selling flights with stopovers in U.S. cities.
“We assume the government is also engaging foreign operators on this issue to ensure we are all taking the same concerted approach,” McNaney said. Transport Canada didn’t respond to a request for comment.
Canadians flying out of major cities will still be able to book trips to Mexico and the Caribbean as normal, provided they are willing to stop over at another airport. American and Delta, for example, are selling tickets for flights from Toronto to Cancun, with passengers connecting through U.S. cities such as Atlanta, Charlotte, N.C., and Philadelphia, Pa., an online search shows.
American Airlines said Monday that it had no schedule changes to share. Delta said it would suspend its flight from Minneapolis to Winnipeg as of Feb. 3, in keeping with government restrictions limiting which airports can receive international flights, but planned to continue its scheduled service to Canada.
Prime Minister Justin Trudeau said Friday that Canadian airlines had agreed to suspend flights to Mexico and the Caribbean until April 30, in an effort to combat the spread of COVID-19 in Canada. The prime minister announced the suspensions along with stricter measures aimed at reducing international travel, including a requirement that entrants to Canada quarantine in a hotel at their own expense.
On Monday, Bloc Quebecois Transport critic Xavier Barsalou-Duval highlighted the fact that U.S. airlines were still offering flights from Canada to sun destinations, saying in a statement that the latest round of suspensions put Canadian companies at a disadvantage.
Asked why Canadian airlines suspended routes while American carriers continue to operate flights to the same destinations, WestJet spokeswoman Morgan Bell said Transport Canada would have to clarify.
“Recognizing that air travel represents less than two per cent of the transmission of COVID, the government asked us to stop flying to these destinations out of an abundance of caution, and we agreed,” Bell said.
The new restrictions were announced weeks after Canada implemented a requirement that all air passengers travelling to Canada produce evidence of a negative COVID-19 test taken within 72 hours of departure.
The testing mandate caused an immediate drop in flight bookings, airlines said, leading to additional layoffs. With the latest restrictions, experts say they expect further layoffs, along with potential bankruptcies, if government aid for the sector doesn’t materialize.
The suspensions of flights to sun destinations will cost Air Canada, the country’s largest carrier, around $200 million in lost revenue between now and April 30, industry analyst John Gradek said.
The flights that Canadian airlines continue to offer include trans-Atlantic and trans-Pacific routes along which carriers transport cargo, a business that has become increasingly important to airlines’ bottom lines as revenue from passenger sales dries up.
U.S. airlines such as Delta and American have received tens of billions of dollars in federal aid since the start of the pandemic. The government stimulus passed by the U.S. Congress in March 2020 included US$25 billion in payroll support for the industry, US$25 billion in loans for passenger airlines and more than US$10 billion in grants and loans for cargo airlines and aviation contractors.
Airlines in Canada, meanwhile, have been in negotiations with the government for months about the terms of a sector-specific aid package, with Ottawa saying that any federal funding for airlines would be contingent on their issuing full refunds to passengers who had their flights cancelled during the pandemic.
Canada’s airlines have still received hundreds of millions of dollars in aid from the Canada Emergency Wage Subsidy, a federal spending program that helps cover a portion of companies’ payroll costs during the pandemic.
This report by The Canadian Press was first published Feb. 1, 2021.
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.
