Omicron Undercuts Hopes of Travel Revival for Canadian Airlines

(Bloomberg) -- Just when winter-weary Canadians typically seek travel to warmer locales, omicron threatens to undermine any potential revival for the country's airline industry.

Canada's air traffic recovery had already been lagging the U.S. even before the highly contagious Covid-19 variant emerged. Traffic at Canadian airport security checkpoints was 53% of 2019 levels in the first 19 days of December--the most recent numbers available-- versus 84% in the U.S., according to data from transport security authorities.

The Canadian outlook is even more uncertain as omicron forces flight cancellations around the globe and prompts new restrictions in some countries. Onex Corp.'s WestJet Airlines, Canada's second-largest carrier, said it will consolidate about 15% of scheduled flights through the end of January.

“We could not have anticipated the rapid and unpredictable impact of the omicron variant on our people and operations, coupled with prolonged frigid temperatures across Western Canada and global staffing shortages,” Interim Chief Executive Officer Harry Taylor said Thursday in a statement.

Six weeks ago, an upbeat outlook made Air Canada, the country's largest airline, confident enough to exit the federal government's emergency financial package. The stock has since plunged 10%. Air Canada is the second-worst performer on the seven-company Bloomberg Americas Airlines Index this year.

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