Christopher Reynolds, The Canadian Press
Printed Friday, October 16, 2020 three:39PM EDT
MONTREAL – Air Canada chief govt Calin Rovinescu will retire subsequent 12 months after main the corporate for greater than a decade, with the airline’s longtime No. 2 set to inherit the function because the trade faces a once-in-a-generation disaster.
Michael Rousseau, Air Canada’s deputy chief govt and chief monetary officer, will take the controls beginning Feb. 15, when Rovinescu steps down.
Rousseau, 61, has been deputy chief govt on the Montreal-based firm since December 2018 and Air Canada’s CFO since 2007.
Rovinescu, 65, has led the airline since 2009, when he got here aboard because the Nice Recession was taking a toll on the worldwide journey market.
He has a protracted historical past with the airline: A longtime associate of Montreal’s Stikeman Elliott legislation agency, Rovinescu labored with Air Canada as lead exterior counsel throughout its 1988 privatization and repulsed a hostile takeover bid for the airline from Onex Corp. in 1999.
He joined the corporate as head of technique beginning in 2000, graduating to chief restructuring officer throughout its spell in chapter court docket in 2003 earlier than leaving the subsequent 12 months to co-found funding financial institution Genuity Capital Markets.
Since returning to Air Canada as CEO he has elevated it to constant profitability, understanding long-term labour agreements, shopping for fuel-efficient plane, launching low-cost subsidiary Rouge and driving Air Canada’s income to new heights of $19.13 billion final 12 months.
He cemented his fame as a talented negotiator with the $497-million repurchase of Aeroplan final 12 months – spun off from Air Canada in 2005 – and a renegotiated deal introduced final week to purchase rival Transat A.T. Inc. for $190 million somewhat than the unique $720 million.
Air Canada shares would turn into the very best performing inventory on the Toronto Inventory Change over his decade on the helm, returning greater than 5,900 per cent by the tip of 2019.
Rovinescu has been rewarded for his success, receiving $12.87 million in whole compensation in 2019, although as of Might Four that determine had been halved because of a tanking inventory value. He’s additionally entitled to a virtually $800,000 annual pension, however agreed to waive his $1.Four-million wage beginning April 1, 2020, as a result of pandemic.
As 2020 dawned, he sat atop the nation’s dominant airline, flush with income and liquidity and a share value that topped $52, miles above the penny inventory it was in 2009.
“Beneath Mr. Rovinescu’s management, Air Canada rose to turn into one of many strongest community airways globally and, till COVID-19, had distinctive share value efficiency to match,” Canaccord Genuity analyst Doug Taylor mentioned in a observe to traders.
What a distinction just a few months could make.
That state of affairs has been upended by the COVID-19 pandemic, which has devastated the worldwide airline sector – Air Canada’s passenger revenues dropped 95 per cent 12 months over 12 months in its second quarter. The lack of earnings prompted 20,000 layoffs – 53 per cent of its workforce – because the Montreal-based firm burned by $19 million per day, with little enchancment in the previous few months.
The airline additionally faces continued frustration from hundreds of consumers after it cancelled their flights as a result of coronavirus however provided few refunds, opting as an alternative to compensate them with journey vouchers.
Canada’s air trade continues to hunt sector-specific aid from the federal authorities, which has as an alternative pointed corporations towards broader applications just like the Canada Emergency Wage Subsidy.
America and a few European nations have provided carriers billions in monetary assist, with strings connected that embrace 20 per cent authorities possession within the case of Lufthansa and emissions discount commitments from Air France-KLM.
That mentioned, the Rovinescu-era turnaround meant Air Canada had $7.Four billion in money available earlier than the outbreak, leaving it with a greater liquidity place than any of the 4 largest U.S. carriers.
He agreed to postpone his retirement till subsequent 12 months because the coronavirus battered the trade, an Air Canada spokeswoman mentioned.
“That stickhandling of Air Canada by COVID-19 is nowhere close to achieved,” mentioned John Gradek, who heads McGill College’s World Aviation Management program. “The disaster isn’t over by a longshot.”
On the one hand, the CEO change is seen as a continuation of Rovinescu’s management.
“The retirement of a pacesetter with the report that Mr. Rovinescu has established would ordinarily be thought of a detrimental. Nonetheless, his successor, Mr. Rousseau, has been a key a part of the aforementioned technique,” Taylor mentioned.
However, Rousseau has largely been a “back-office” participant, Gradek mentioned, regardless of his key function in securing $6 billion in liquidity this 12 months.
“Calin’s principally been the frontman at Air Canada for the previous decade, so there hasn’t been a lot of an opportunity for Rousseau to unfold his wings,” mentioned Gradek.
“The jury’s nonetheless out whether or not he is received the power to construct the credibility that is wanted to be the CEO of one of many largest airways on this planet.”
Rousseau is extensively seen as taking part in an instrumental function in altering the corporate’s monetary trajectory by boosting its revenue margin, share value and pension plan, which moved from a $three.7-billion deficit in 2013 to a $2.6-billion surplus in 2019.
Approaching board Air Canada on the cusp of the 2008-09 monetary disaster, Rousseau honed his abilities as CFO at Hudson’s Bay Co. between 2001 and its $1.1-billion sale in 2006 to South Carolina billionaire businessman Jerry Zucker.
Earlier than that Rousseau held senior monetary posts at Moore Company, Silcorp Ltd. and United Cigar Shops Ltd., the place he turned CFO on the age of 30.
Graduating with a level in enterprise administration from York College in 1981, Rousseau launched his accounting profession articling with Deloitte Haskins & Sells (now Deloitte Canada), adopted a number of years later by a quick stint at Magna Worldwide Inc.
This report by The Canadian Press was first revealed Oct. 16, 2020.