Air Canada airplanes sit on the tarmac at Pearson International Airport in Toronto on March 20, 2020. Nav Canada’s CEO says the air traffic control company saw a “staggering” decline in flights over the past year due to fallout from the COVID-19 pandemic, resulting in massive layoffs and revenue shortfalls. THE CANADIAN PRESS/Nathan Denette

Air Canada airplanes sit on the tarmac at Pearson International Airport in Toronto on March 20, 2020. Nav Canada’s CEO says the air traffic control company saw a “staggering” decline in flights over the past year due to fallout from the COVID-19 pandemic, resulting in massive layoffs and revenue shortfalls. THE CANADIAN PRESS/Nathan Denette

CEO of air traffic controller Nav Canada cites ‘staggering’ drop in flights in 2020

Nav Canada also suffered a 59 per cent decrease in air traffic last quarter

Nav Canada saw profits and air traffic plummet in its first quarter as fallout from the COVID-19 pandemic continues to batter the air traffic control company.

The “staggering” decline in flights prompted massive layoffs as well as a 45 per cent year-over-year drop in revenue for the three months ended Nov. 30, said CEO Neil Wilson.

Net losses at the non-profit company, which runs the country’s civil air navigation service, were $138 million last quarter compared with $36 million a year earlier.

Nav Canada also suffered a 59 per cent decrease in air traffic last quarter, causing revenue to sink to $202 million from $364 million a year earlier.

The losses came despite a drastic rate hike as well as cost-saving measures and the federal wage subsidy that helped slash expenses by about 16 per cent from the same period in 2019, the company said.

“We also had to make the very difficult decision to reduce our workforce across all departments, all groups,” Wilson said at the company’s annual meeting Wednesday, acknowledging the “devastating impact” for staff.

The drop in global travel demand prompted the company to lay off about 900 employees — more than 17 per cent of its workforce — over the past 10 months, including 190 workers in December.

The company hiked its rates by 30 per cent in September, prompting at least one carrier to raise surcharges for passengers on domestic flights.

Wilson, who will step down as chief executive at the end of the month, said the rate hike allowed Nav Canada to seek debt financing and ensure liquidity after it unsuccessfully asked Ottawa for financial support last summer.

WestJet Airlines Ltd. appealed the hike to the Canadian Transportation Agency, which dismissed the case in a decision Tuesday, Nav Canada said.

The Canadian Press

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