Fidelity once more cuts Air Canada stake amid bailout talks

Air Canada’s largest shareholder has once again reduced its shareholding in the carrier to less than 10%. In a stock market disclosure, Canadian investment management firm Fidelity said it had sold over CAD35 million Canadian dollars (USD27.6 million) worth of Air Canada shares during the months of December and January. In particular, it offloaded over 500,000 Air Canada shares on January 25. The firm revealed in July last year that it had become Air Canada’s largest single shareholder with a 10.1% stake. However, this declined below the 10% threshold when it sold off 817,000 shares at the end of August. The purchase of more than 12.9 million shares on November 9 then helped shore up its stake in Air Canada to more than 11%. Given the bleak outlook for Canada’s airline travel market, chief executive Calin Rovineascu said last week that he was optimistic about securing a government bailout for the carrier after it posted its worst annual results for almost 20 years – a net loss of CAD4.65 billion Canadian dollars (USD3.65 billion) for 2020 brought on by a 73% decline in passenger numbers year-on-year. “I am also very encouraged by the constructive nature of discussions that we have had with the Government of Canada on sector-specific financial support over the last several weeks. While there is no assurance at this stage that we will arrive at a definitive agreement on sector support, I am more optimistic on this front for the first time,” he said in a statement. To help cope with the impact of COVID-19 on global travel demand as well as tough new government-imposed entry restrictions, Air Canada has had to cut its staff by more than 20,000, reduce its order commitments and existing fleet by phasing out less efficient types, and curtail its network. While it awaits Ottawa’s decision on whether to extend support, Air Canada has sought to shore up its liquidity through several debt and equity financings. According to Reuters, Rovinescu, who retires this month, has since told analysts he expects an “improved dynamic” around the end of April, with COVID-19 testing replacing some quarantines.