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Canada has approved Air Canada’s purchase of troubled rival Transat, subject to a number of conditions, Transport Minister Omar Alghabra said Thursday. Alghabra said the COVID-19 pandemic was a key factor in the decision, given that Air Transat had already made clear a slump in travel was hitting its finances. Air Canada’s commitments include encouraging and helping other airlines to take up former Transat routes to Europe, preserving the Transat head office in the province of Quebec and facilitating aircraft maintenance in Canada, he added. In December, Transat shareholders approved a sharply discounted C$188.7m buyout offer from Air Canada, after COVID-19 hit travel demand.<br/>

It’s a difficult time to be running an airline anywhere. For Michael Rousseau, the incoming CEO of Air Canada, the job comes with a unique set of complications. Air travel in Canada hasn’t even begun to bounce back from the Covid-19 crisis. Passenger traffic at airport checkpoints in January was just 13% of last year’s levels, versus 38% in the US, according to data from the countries’ transportation authorities. The situation for airlines is getting worse, even though virus cases are dropping. A rebound is nowhere in sight. The government of Justin Trudeau, which barred most foreign travelers from entering the country last March, just made the rules even tougher. It’s also explicitly telling Canadians not to leave. In the first week of February, air travel was less than 9% of year-earlier levels. The government has offered no dedicated aid package for airlines. The result has been deep cuts across the industry. Air Canada has furloughed or dismissed more than 20,000 workers and used loans, equity offerings and aircraft sale-leaseback deals to raise billions of dollars. The challenge for Rousseau, who starts in the top job Monday after more than 13 years as chief financial officer, will be to balance cash-preservation with the ability to meet rising demand once travel restrictions are relaxed, said Dan Fong, an analyst at Veritas Investment Research Corp. “They’ve been very effective in the past at scaling up and scaling down,” he said. “The key, though, will be beyond the pandemic, because if you cut too deeply you’ll have a tougher time participating in the recovery.”<br/>

United returned the Boeing 737 Max to service on Thursday, the second US carrier to bring back the plane after two deadly crashes prompted a worldwide grounding in 2019. The FAA in November lifted its 20-month grounding of the planes after Boeing made software and other safety changes to its bestselling plane. The resumption of deliveries last year was a relief for Boeing. The grounding of the planes starved it of cash, a crisis that was compounded by the Covid-19 pandemic’s impact on jetliner demand. United Flight 1864, the carrier’s first Max passenger flight since the grounding, departed from its Denver hub and arrived in Houston at 11:23 a.m. Central time. United has roughly 550 flights scheduled with the Max this month and about 2,000 for March. The airline said it expects to take delivery of 24 Max planes this year and had 14 in the fleet at the time of the March 2019 grounding. <br/>

Copa Airlines said Thursday that it expects to receive 8 Boeing 737 MAX planes in 2021, an aircraft model that returned to service recently after two deadly crashes prompted extensive safety reviews. Copa executives said in an earnings call that the MAX aircraft they already fly have performed well and without any issues, and that passengers have also not refused to fly on the plane.<br/>

Copa Airlines was essentially grounded for almost five months last year. Flights resumed in Q4, as Panama eased its travel restrictions, but the resurgent virus and fear of new variants has quashed demand since December. Copa’s December capacity was 27% of the airline’s December 2019 capacity, and Q1 capacity so far has been about 40% of 2019. But February and March, historically a weak period, could see demand taper off even further as the new Covid-19 outbreaks cause countries Copa serves to clamp down on travel, CEO Pedro Heilbron told analysts during the company’s fourth-quarter and full-year 2020 earnings call on Feb. 11. The latter point has made Copa’s and other Latin American carriers’ recovery more difficult. Travel restrictions and quarantine requirements change frequently, with little warning, making forward planning a headache. Heilbron said Copa is hopeful that wider acceptance of testing will help ease some of these restrictions. Copa is down to a handful of weekly flights to Argentina, twice weekly flights to Havana. Flights to Venezuela were grounded for almost a month, Heilbron said.<br/>

The Government will retain its majority stake in Air NZ by participating in a capital raise this year, Finance Minister Grant Robertson says. But Cabinet must be satisfied with the terms of the airline's proposed equity raise - to be completed by June 30 - in order to maintain its stake. At present, the Government owns 52% of the airline and has made available a $900m loan that could be converted to equity. The airline is burning through between $65m and $85m in cash a month and has said it wants to minimise its reliance on the taxpayer loan - with interest rates of up to 9% - by going to the market to raise capital. By the end of last September, the airline had drawn down $110m of the Government loan, a figure that will be updated when the company reports its half-year result at the end of the month. Other airlines have successfully raised funds in the past 10 months to help them survive the Covid-19 crisis. The airline says a letter from Robertson recognised the importance of a strong domestic air travel network for economic and social development purposes. It also recognised the key role of Air NZ in supporting our international tourism and export industries. "The minister also highlighted Air New Zealand's commitment to environmental sustainability, and the airline's role as a good employer," the airline says.<br/>