Air Canada confident business travel will come back in the fall

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Air Canada is confident business travel will resume as large companies get back to normal office hours and allow employees weary of online meetings to gather face to face. Leisure travellers, however, will drive the first wave of the recovery in air travel, which is already showing signs of rising demand, said Michael Rousseau, finance chief of Montreal-based Air Canada.

"As companies get back into their offices, hopefully postsummer, we see business travel start to come back,“ Mr. Rousseau said. "It’ll be slower than leisure, but we do see it coming back.”

Air Canada – which along with Air Transat and WestJet Airlines Ltd. has announced a small number of summer routes after halting most flights due to the pandemic – said it has seen increasing demand for domestic travel. However, interprovincial travel bans and 14-day travel quarantines in most countries remain a barrier to air travel. A return to 2019 passenger levels is three years away, Mr. Rousseau said.

Prime Minister Justin Trudeau on Tuesday extended the closing of the Canada-U.S. border to non-essential travel for another month, to July 21. “This is an important decision that will keep people in both of our countries safe,” Mr. Trudeau said.

The border was first closed in mid-March to limit the virus, which has killed more than 8,200 Canadians and is rising in some U.S. states, even as stay-at-home orders and other restrictions are lifted.

Air Canada and other travel and tourism companies banded together last week to call on governments to relax travel restrictions they say are “stifling” the economic recovery.

Health officials say mandatory quarantines and restrictions on travel are important to containing the virus and saving lives.

Canadians returning from abroad must self-isolate for 14 days, and those travelling domestically face restrictions and quarantines on travel to and within some provinces. In PEI, for example, seasonal visitors must apply for admission and then quarantine for two weeks. New Brunswick and Newfoundland have barred all non-essential visits, and B.C. has restricted crossing the Alberta border to necessary travel only.

Mr. Rousseau said Air Canada’s relaunch of the Aeroplan frequent-flyer program later this year will help drive demand for leisure and business travel. Air Canada, which made $19-billion in revenue in 2019 but posted a $1-billion loss in the first quarter as it cancelled most of its flights, does not break out sales by business or leisure travel. However, business class is a premium segment with high margins that has helped the airline post bigger profits and amass almost $10-billion in cash.

Mr. Rousseau said the return of the business traveller is inevitable as people yearn for personal contacts and tire of conducting business through computer screens.

“I hate these online meetings,” Mr. Rousseau said during an online meeting webcast by a bank on Tuesday. “I think not seeing people across the table, talking interactively is a loss. I’ve had hundreds and hundreds of these meetings and I’m hearing that from the vast majority of the marketplace. They’re eager to get back and meet clients face to face and interact with them in a much different way than they do over the phone or Zoom or Webex."

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