Air Canada has reversed a November 2020 decision to cancel an order for A220-300 aircraft. Announcing its 2021 financial results this week, the airline confirmed it had reinstated the order for the 12 canceled A220s. In November, Air Canada had flagged taking two of the dozen canceled jets. Air Canada will now take delivery over 2024 and 2025, eventually building their A220 fleet to 45 jets.

No standing still for Air Canada

The Montreal headquartered airline ordered these planes back in 2016, signing on the dotted line for 45 A220-300s with options for 30 more. At list price, the firm order was valued at approximately $US3.8 billion, increasing to $US6.3 billion if Air Canada exercised all 30 options.

"Following a rigorous evaluation of its capabilities, we’re confident that the aircraft’s superior range, economics and seating capacity will provide a stellar passenger experience and contribute significantly to our development plans to expand our network and increase point-to-point service to Canadian and transborder markets,” said then Air Canada President and CEO Calin Rovinescu.

But a lot can happen in six years in the airline business. In early 2020, the COVID-19 pandemic put the brakes on Air Canada's immediate growth plans. The airline slashed costs as it buckled down to ride out the downturn. The 12 Airbus A220s were among the casualties alongside 10 Boeing 737 MAXs.

“We are deferring delivery of new Boeing 737-8 and Airbus A220 aircraft scheduled for delivery in 2021 and 2022 and canceling 10 Boeing 737-8s and 12 Airbus A220s, representing about 40% of the remaining scheduled deliveries,” said Mr Rovinescu at the time as he announced a 2020 third quarter loss of US$526 million.

Tide turns at Air Canada

Another year down the track, and the tide was slowly turning at Air Canada. In November 2021, Air Canada confirmed it would partially reverse the cancelation decision, reinstating the order for two A220s and speeding up delivery of four Boeing 737 MAX 8s.

"We are encouraged by the favorable revenue and traffic trends in the third quarter, with strong increases in key passenger geographic segments, a record cargo performance, and significant improvements in both Air Canada Vacations and Aeroplan," said newly installed Air Canada President and CEO, Michael Rousseau.

"To support our network restoration, we have reversed our decision to cancel two Airbus A220 aircraft orders and are now accelerating deliveries of new Boeing 737 MAX aircraft."

More of a negotiated pause than an outright cancelation?

Three more months pass, and Air Canada has decided to take the remaining A220-300 jets. In a financial filing this week accompanying confirmation of a full year 2021 operating loss of US$2.4 billion, the airline said it would undo the remaining November 2020 A220 cancelations.

"These 12 aircraft are those that Air Canada had previously determined it would no longer be purchasing under an amendment to the purchase agreement concluded with Airbus in November 2020," the filing read.

Given the ease with which Air Canada reversed its cancelation decision, perhaps 'cancelation' is too strong a word. The muted response from Airbus suggests that the manufacturer will have no significant issues accommodating Air Canada's backflip. It indicates the November 2020 cancelation was perhaps more of a negotiated pause.