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Results: 1 - 15 of 67
Ferio Pugliese
View Ferio Pugliese Profile
Ferio Pugliese
2020-06-22 13:27
Good afternoon, Chair and members of the standing committee. Thanks for allowing us the opportunity to be here this afternoon with you. Given this is the Standing Committee on Health, I trust everyone is well and safe.
My name is Ferio Pugliese. I am the senior vice-president of government relations and Air Canada Express at Air Canada. I am pleased to join you here to discuss the Canadian response to the COVID-19 pandemic. I am joined by my colleague, Dr. Jim Chung, who is Air Canada’s chief medical officer. He and I will try to divide our time with opening remarks and then be available to answer your questions.
As we all know, the impact of the pandemic has been unprecedented. Not only has this novel disease negatively affected the health of individuals, cities and countries, it has also ground economies to a halt, undermined trade relationships, closed borders and reduced passenger travel between countries in a way that many of us never thought possible. At this stage, Air Canada has had a front row seat in all of this.
As Air Canada followed the disease in China in late 2019 and early 2020, we began to see travel demand between the two countries drop significantly. This forced us to cut back service to China at a significant cost. In fact, we were one of the first North American airlines to do so. Continued monitoring of the World Health Organization’s daily reports and those of our health partner BlueDot made us realize that the situation was more dire than many cared to admit.
As cases of COVID-19 began to appear outside China and with little information about the nature of the disease, Air Canada’s executive team made the decision to cease all operations to China, following a travel advisory issued by the Government of Canada. This took place on January 29, 2020, one full day before the World Health Organization declared a public health emergency of international concern, and well before the WHO declared a pandemic on March 11, 2020. It's important to note that Chinese carriers continued to operate to Canada during this period.
Over the course of February, we saw air travel demand drop by even larger numbers, with cancellations of existing bookings increasing in lockstep. Our sector was unique in that we were witnessing and feeling the economic impact ahead of almost any other industry or sector, except for maybe hotels and tour operators, and well before the pandemic declaration.
In addition to this fear-induced drop in demand, governments around the world began to impose travel restrictions and border closures that would physically limit travel options. By mid-March, easily one of the busiest air travel periods of the year, our operations were a fraction of what they had been the year prior, and worse, domestic and international advance bookings were almost zero.
Sadly, after 10 years of growth and recognition as one of the best airlines in the world, Air Canada was reduced to 5% of operations year over year, essentially a 95% reduction. As a result, we made the difficult but necessary choice to lay off over 20,000 employees, more than 50% of our workforce, and reduce our global network from 220 destinations to 46.
Given that Canadian border restrictions and quarantine policies remain in place, there is little hope of a near-term recovery, although we are taking steps to rebuild our network and continue to lobby to lift these restrictions.
Even as our day-to-day operations were being scaled back, we took steps to assist in the national effort to combat the crisis by doing what we do best: fly people and cargo. In March and April, in collaboration with Global Affairs Canada, we repatriated more than 300,000 Canadians through our regularly scheduled flights and specially arranged repatriation flights. In total, we operated 21 dedicated repatriation flights. Our crews deserve our thanks.
To quote Minister Champagne, “Air Canada played a vital role in bringing thousands of our fellow Canadians home." I want to thank them on the public record for their tireless effort, compassion, dedication and professionalism during these demanding missions.
In addition to repatriating Canadians, Air Canada took steps to scale our cargo operations and assist in strengthening the supply chain to secure equipment for the health network.
Since the end of March, we have operated more than 1,500 of these cargo-only flights and transported hundreds of tonnes of medical equipment. It is important to note that cargo also plays a critical role in the global economy and our own national economy.
At this stage, Air Canada is in recovery mode. We're learning how to deal with this disease. We are not only taking steps to address COVID-19 concerns, but also working with domestic and international partners to ensure that air travel continues to be a safe alternative for travel. In conjunction with world health organizations and authorities, many countries like France, Germany, Portugal, Japan and Australia are now implementing plans to reopen borders to bring back trade and tourism to their economies.
Air Canada alone contributes $50 billion to the Canadian economy through these activities, to say nothing of the entities in the supply chain. Canada, we believe, now needs to work with stakeholders to urgently take steps to reopen its borders, ease travel restrictions and quarantine requirements, both domestically and internationally, in a very measured and prudent fashion. Otherwise, our sector and the Canadian economy would suffer far longer than they need to.
I will stop my remarks there and turn the floor over to my colleague, Dr. Jim Chung.
View Don Davies Profile
NDP (BC)
Thank you, Mr. Chair.
For Air Canada and WestJet, I think yours are the only two airlines for which this question is appropriate. Has your airline seen an increase in air cargo traffic throughout the current pandemic? If so, I'm curious as to whether that has helped to compensate for the decline in passenger revenues. If so, to what degree?
Ferio Pugliese
View Ferio Pugliese Profile
Ferio Pugliese
2020-06-22 14:57
I will start. We've done a significant amount of work in the area of cargo. We've retrofitted a number of our 777 extended-range aircraft. We've taken out all the seats and retrofitted the aircraft to carry cargo. We've done that with a few of our Airbus products as well.
It doesn't offset the revenue anywhere near what commercial passenger traffic would be, just because of the sheer volumes, but it certainly has helped in this period of time to allow us to get essential goods around the globe. We started that work back in the latter part of March and continue it to date.
View Don Davies Profile
NDP (BC)
Thank you.
Mr. Mikoch-Gerke, does WestJet have expanded cargo? Do you do cargo?
Jared Mikoch-Gerke
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Jared Mikoch-Gerke
2020-06-22 14:58
We do cargo, and we have expanded our capacity to the extent that we're able to. We have not reconfigured our aircraft. We've done some increased services of critical goods such as blood plasma. We've also picked up some additional work to help support Canada Post. We've done a couple of all-cargo charters transporting PPE between Dublin and Atlanta.
That said, even though we have seen a slight increase in our cargo traffic in what we've done, it does not supplement for the increased loss in passenger demand.
Howard Liebman
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Howard Liebman
2020-06-22 14:59
I'm pleased to say that as part of our restart plan, we have converted two wide-body Airbus 330 aircraft to freighters, and we're in the process of reaching out to different partners and stakeholders. Just as we repatriated Canadians home at the end of our flying, once we get back in the air, our intention will be to help out in offering lifts to the provinces and the government to bring PPE in from China and other markets.
View Kody Blois Profile
Lib. (NS)
View Kody Blois Profile
2020-06-12 14:51
Thank you, Mr. Chair.
I'm going to start my questions with Mr. Haerle.
During your remarks, you mentioned the fact that grain farmers were losing money. Essentially, it was costing more than what they could get in return from the market. Am I to understand right now that farmers, literally, every time they ship product, are losing money, or have they just lost margins on what their prior profit margin had been?
Markus Haerle
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Markus Haerle
2020-06-12 14:51
If you take, for instance, the crop that was produced last year, that often enough was pre-sold into forward contracts. It's somewhat not as bad as what they are planting at the moment.
At the moment, what's being put in the ground is the crop that's going to be the big question mark. We have to remember that there have been contracts for shipments going to processors that were delayed, deferred and cancelled. An ethanol industry that is at 50% capacity cannot take 100% of its input—
View Xavier Barsalou-Duval Profile
BQ (QC)
Thank you, Mr. Chair.
Madam Minister, in a previous meeting, you or one of your officials mentioned that you had an exclusive transportation agreement with Air Canada and Cargojet to transport supplies from abroad.
I would like to know the total value of contracts between Air Canada and your department since March.
View Anita Anand Profile
Lib. (ON)
Thank you for your question.
Let me give you an answer on that later, since I do not have the details in front of me right now. Having said that, I want to make it clear that those flights were very important. There were over 50 of them.
Daniel Dagenais
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Daniel Dagenais
2020-06-05 14:26
Good afternoon.
I want to thank you for the opportunity to speak as part of the committee business. My name is Daniel Dagenais. I'm the vice-president of operations at the Montreal Port Authority.
I want to start by expressing my sincere appreciation for the port workers, seagoing personnel and all supply chain workers. They've been working tirelessly since the beginning of the pandemic to ensure that all sectors of the industry across the country can continue to operate.
I also want to thank the government for its efforts to minimize the impact of the COVID-19 pandemic on Canadians. In particular, I want to thank the officials and departmental staff with whom we're in contact. They've remained available and attentive during our many calls over the past few weeks.
Naturally, I also want to thank our clients and business partners for their trust, along with our workers, who have also demonstrated their trust over the past few weeks.
The Port of Montreal is the second largest port in Canada. It's the only container port on the St. Lawrence. Our continental markets for goods are mainly Quebec, Ontario and the American midwest.
A port is a hub for goods, where all modes of transportation come together. Every day, 2,500 trucks come to the port to pick up and deliver goods. Two thousand ships a year come to anchor in our waters. Every week, 60 or 80 trains pass through the interchange area to deliver goods.
The Port of Montreal's operations generate economic benefits of about $2.6 billion and support almost 19,000 direct and indirect jobs. Last year, in 2019, over $100 billion worth of goods crossed our docks. It was the sixth record year for the Port of Montreal. However, March 2020 will certainly go down in history for us. We had record volumes in 2019, since the amount of goods kept increasing. In the first quarter of 2020, the volumes were already 5% higher than in 2019.
In March, the Canadian and Quebec governments recognized the essential status of the movement of goods. As a result, our employees were excluded from lockdown orders and closure instructions. We had to quickly adapt our business processes to comply with safety instructions.
COVID-19 is having and will have an undeniable impact on the Canadian and Quebec economies and on supply chains. For the supply chain players, the pandemic, and the resulting health crisis, is primarily a challenge for workers and employers.
What happened at the start of the pandemic? The winning conditions for dealing with this type of disaster mainly involved risk management, which had to be embedded in our culture. We needed a business continuity plan with a pandemic component, meaning the implementation of a series of health measures such as hand washing, physical distancing, the closure of our offices, and the distribution of personal protective equipment and material. Of course, we've done just about everything that you've already heard about. I echo what Mr. Lessard said earlier about the measures taken.
In addition, we've been working hard for a very long time to diversify our markets, specifically to ensure proper crisis and risk management and to thereby better withstand economic shocks and price increases.
Early on, the Montreal Port Authority mobilized its management team and employees. It established crisis management at the strategic level, but also a tactical committee on the ground to find the right measures to implement. These groups were mobilized and these committees were created to build on the trust that we already have in our workers. This aligns with our culture of resilience.
We needed to establish our priorities, get our messages out and properly convey them to our employees. Once we had mobilized our direct contacts, we mobilized our operators. Naturally, we had to remain attentive and support their activities, but also maintain the flow and align our guidelines.
We have only one work disruption to report. It happened early on, when there was a great deal of confusion and information seeking. What has made the difference is the consistent message that employees clearly play a key role in our actions and responses. This strategy has worked well not only with our employees, but also with our tenants' employees.
The third item that I want to talk about is the collaboration among all the supply chain players. We must communicate and remain factual, responsive and sensitive to concerns. Early on, we started listening. The logistics chain players asked us to work with them to resolve anticipated issues, such as shortages of containers and storage space. We quickly took stock of available space together with the CargoM logistics and transportation cluster in the Montreal area.
We also kept track of the availability of containers to avoid running out and to ensure that Canadian exporters could export their goods. As a result, there's no crisis. Traffic continues to flow through our facilities. To date, the Port of Montreal remains fully operational and free of congestion.
In addition to the collaboration with the cluster and the logistics chain players around the Port of Montreal, work was done at the national level with the network of port authorities. We also reached out to our international partners to identify, understand and share information. We tried to identify best practices and draw inspiration from them, while establishing partnerships. A great deal of work was done with the Port of Antwerp and chainPORT, an association of ports interested in logistics and innovation.
At the same time, we worked with the Scale AI and IVADO Labs innovation supercluster to create tools to help us distinguish goods and mobilize the logistics chain to improve the flow of goods through our facilities. These goods are often critical to combatting COVID-19.
In conclusion, I want to add that our infrastructure remained open. Our infrastructure is strategic, and it must be adapted to long economic cycles. We must meet needs, which requires a business continuity plan. We must then establish priorities, communicate, and maintain our clients' trust in the logistics chain.
View Julie Vignola Profile
BQ (QC)
Thank you, Madam Chair.
My question is for Mr. Lessard.
Earlier, Mr. Lessard, you mentioned the problems truckers encountered in the first few weeks.
I heard about those issues. I have family and friends who work in the sector, and they told me that they didn't have access to washroom facilities, whether in Quebec, Ontario, other provinces or across the border. When they would cross the U.S. border, any food they brought was confiscated and thrown away. They were seen almost as pariahs, so they ran into problems at loading and unloading sites.
Which of the measures put in place did the most to ensure truckers felt respected and less stressed?
Jean-Robert Lessard
View Jean-Robert Lessard Profile
Jean-Robert Lessard
2020-06-05 15:51
As you mentioned, it was an intense experience for our people, not necessarily between Quebec and Ontario—although that is a very busy corridor for us—but more in the U.S. It's true that, when they arrived at the drop-off or delivery point, they were often treated like pariahs.
In some cases, consignees didn't want to sign documents confirming receipt of the goods. Since everyone has a cell phone, we set up a procedure where truckers would take a photo of the document and a photo of the person receiving the goods. That way, we were able to make sure we would be paid.
Obviously, truckers had lunch boxes with them, and there were a few times when they weren't allowed in with their food. What was insulting was that truckers had paid people to prepare food for them, but when they got to the border, it was thrown out.
That put tremendous strain on truckers, but things got better when the people at the Canadian Trucking Alliance and the Association du camionnage du Québec got involved. They lobbied hard and were able to convince border authorities that, at a minimum, drivers were entitled to eat and to use the facilities.
View Julie Vignola Profile
BQ (QC)
Can you tell us briefly whether you and your truckers incurred significant financial losses because of the things you just told us, in particular, the challenges around getting people's signatures and the fact that food was being thrown out?
Jean-Robert Lessard
View Jean-Robert Lessard Profile
Jean-Robert Lessard
2020-06-05 15:53
No, we didn't incur any financial losses because we were very proactive; we called customers and told them that it was ridiculous. An electronic procedure was then put in place.
I must admit, though, that not everyone is well set up to do business electronically, so they may have lost money because of that.
On our end, we didn't lose any money. If they paid us, we would go back to deliver the goods, but if not, we wouldn't.
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