Air Canada president and CEO Calin Rovinescu arrives for the airline's annual meeting Monday, April 30, 2018 in Montreal. Air Canada says that chief executive Calin Rovinescu will retire next year after after leading the company for almost 12 years. THE CANADIAN PRESS/Paul Chiasson

Air Canada CEO Calin Rovinescu to retire next year; Michael Rousseau named successor

Air Canada CEO Calin Rovinescu to retire next year; Michael Rousseau named successor

MONTREAL — Air Canada chief executive Calin Rovinescu will retire next year after leading the company for more than a decade, with the airline’s longtime No. 2 set to inherit the role as the industry faces a once-in-a-generation crisis.

Michael Rousseau, Air Canada’s deputy chief executive and chief financial officer, will take the controls starting Feb. 15, when Rovinescu steps down.

Rousseau, 61, has been deputy chief executive at the Montreal-based company since December 2018 and Air Canada’s CFO since 2007.

Rovinescu, 65, has led the airline since 2009, when he came aboard as the Great Recession was taking a toll on the global travel market.

He has a long history with the airline: A longtime partner of Montreal’s Stikeman Elliott law firm, Rovinescu worked with Air Canada as lead external counsel during its 1988 privatization and repulsed a hostile takeover bid for the airline from Onex Corp. in 1999.

He joined the company as head of strategy starting in 2000, graduating to chief restructuring officer during its spell in bankruptcy court in 2003 before leaving the next year to co-found investment bank Genuity Capital Markets.

Since returning to Air Canada as CEO he has elevated it to consistent profitability, working out long-term labour agreements, buying fuel-efficient aircraft, launching low-cost subsidiary Rouge and driving Air Canada’s revenue to new heights of $19.13 billion last year.

He cemented his reputation as a skilled negotiator with the $497-million repurchase of Aeroplan last year — spun off from Air Canada in 2005 — and a renegotiated deal announced last week to buy rival Transat A.T. Inc. for $190 million rather than the original $720 million.

Air Canada shares would become the best performing stock on the Toronto Stock Exchange over his decade at the helm, returning more than 5,900 per cent through the end of 2019.

Rovinescu has been rewarded for his success, receiving $12.87 million in total compensation in 2019, though as of May 4 that figure had been halved thanks to a tanking stock price. He is also entitled to a nearly $800,000 annual pension, but agreed to waive his $1.4-million salary starting April 1, 2020, due to the pandemic.

As 2020 dawned, he sat atop the country’s dominant airline, flush with profits and liquidity and a share price that topped $52, miles above the penny stock it was in 2009.

“Under Mr. Rovinescu’s leadership, Air Canada rose to become one of the strongest network airlines globally and, until COVID-19, had exceptional share price performance to match,” Canaccord Genuity analyst Doug Taylor said in a note to investors.

What a difference a few months can make.

That state of affairs has been upended by the COVID-19 pandemic, which has devastated the global airline sector — Air Canada’s passenger revenues dropped 95 per cent year over year in its second quarter. The loss of income prompted 20,000 layoffs — 53 per cent of its workforce — as the Montreal-based company burned through $19 million per day, with little improvement in the last few months.

The airline also faces continued frustration from thousands of customers after it cancelled their flights due to the coronavirus but offered few refunds, opting instead to compensate them with travel vouchers.

Canada’s air industry continues to seek sector-specific relief from the federal government, which has instead pointed companies toward broader programs like the Canada Emergency Wage Subsidy.

The United States and some European countries have offered carriers billions in financial aid, with strings attached that include 20 per cent government ownership in the case of Lufthansa and emissions reduction commitments from Air France-KLM.

That said, the Rovinescu-era turnaround meant Air Canada had $7.4 billion in cash on hand before the outbreak, leaving it with a better liquidity position than any of the four biggest U.S. carriers.

He agreed to postpone his retirement until next year as the coronavirus battered the industry, an Air Canada spokeswoman said.

“That stickhandling of Air Canada through COVID-19 is nowhere near done,” said John Gradek, who heads McGill University’s Global Aviation Leadership program. “The crisis is not over by a longshot.”

On the one hand, the CEO change is seen as a continuation of Rovinescu’s leadership.

“The retirement of a leader with the record that Mr. Rovinescu has established would ordinarily be considered a negative. However, his successor, Mr. Rousseau, has been a key part of the aforementioned strategy,” Taylor said.

On the other hand, Rousseau has largely been a “back-office” player, Gradek said, despite his key role in securing $6 billion in liquidity this year.

“Calin’s basically been the frontman at Air Canada for the past decade, so there hasn’t been much of a chance for Rousseau to spread his wings,” said Gradek.

“The jury’s still out whether he’s got the ability to build the credibility that’s needed to be the CEO of one of the largest airlines in the world.”

Rousseau is widely seen as playing an instrumental role in changing the company’s financial trajectory by boosting its profit margin, share price and pension plan, which moved from a $3.7-billion deficit in 2013 to a $2.6-billion surplus in 2019.

Coming on board Air Canada on the cusp of the 2008-09 financial crisis, Rousseau honed his skills as CFO at Hudson’s Bay Co. between 2001 and its $1.1-billion sale in 2006 to South Carolina billionaire businessman Jerry Zucker.

Before that Rousseau held senior financial posts at Moore Corporation, Silcorp Ltd. and United Cigar Stores Ltd., where he became CFO at the age of 30.

Graduating with a degree in business administration from York University in 1981, Rousseau launched his accounting career articling with Deloitte Haskins & Sells (now Deloitte Canada), followed several years later by a brief stint at Magna International Inc.

This report by The Canadian Press was first published Oct. 16, 2020.

Companies in this story: (TSX:AC)

Christopher Reynolds, The Canadian Press

Note to readers: This is a corrected story. An earlier version spelled Rovinescu incorrectly.

Air Canada

Just Posted

Patrons practice on a putting green as the Whitestone Bridge looms in the distance at Trump Golf Links at Ferry Point in the Bronx borough of New York on Tuesday, May 4, 2021. Former President Donald Trump has a rich history of fighting back when he’s down and making others pay, and that’s exactly how he intends to deal with New York City over its plans to fire his company from running the city golf course. (AP Photo/John Minchillo)
Dump Trump? Kicking him off NYC golf course may not be easy

Trump Organization has been reeling after the Capitol riots

A photo illustration made December 14, 2012 in Montreal shows a computer in chains. THE CANADIAN PRESS/Ryan Remiorz
Irish health system says it’s targeted in ransomware attack

Health care systems have been a target before

A woman wearing a mask talks on her phone near an exhibition depicting a rover in Mars in Beijing on Friday, May 14, 2021. China says its Mars probe and accompanying rover are to land on the red planet sometime between early Saturday morning and Wednesday Beijing time. (AP Photo/Ng Han Guan)
China Mars rover to land between Saturday and Wednesday

Only the United States has successfully landed a spacecraft on Mars

Smoke rises following Israeli airstrikes on a building in Gaza City, Thursday, May 13, 2021. Weary Palestinians are somberly marking the end of the Muslim holy month of Ramadan, as Hamas and Israel traded more rockets and airstrikes and Jewish-Arab violence raged across Israel. (AP Photo/Hatem Moussa)
Palestinians flee as Israeli artillery pounds northern Gaza

Israel called up 9,000 reservists as fighting intensifies

Bo’s Bar and Grill owner Brennen Wowk said the hospitality industry is looking for more clarity from the province around what conditions must be met to allow for restaurants reopening. (Advocate file photo)
Frustated restaurant owners want to know government’s reopening plan

Restaurant owners feel they are in lockdown limbo

A used protective face mask is seen discarded on the ground in Vancouver, B.C. in May 2020. (Ashley Wadhwani/Black Press Media)
Medical exception letters required for Albertans who don’t wear masks in public areas

EDMONTON — Alberta has moved to close loopholes people might use as… Continue reading

Team Canada’s head coach Troy Ryan talks with players before the start of the of the Rivalry Series at the Save-On-Foods Memorial Centre in Victoria, B.C., on Monday, February 3, 2020. Ryan of Spryfield, N.S., has been named head coach of Canada’s women’s hockey team for the 2022 Winter Olympics in Beijing.THE CANADIAN PRESS/Chad Hipolito
Troy Ryan to coach Canadian women’s hockey team in 2022 Winter Olympics

Ryan was Canada’s assistant coach from 2016 to 2019

FILE- In this April 19, 2021, file photo, people wearing masks as a precaution against the coronavirus wait to test for COVID-19 at a hospital in Hyderabad, India. Misinformation about the coronavirus is surging in India as the death toll from COVID-19 rises. Fueled by anguish, distrust and political polarization, the claims are further compounding India’s crisis. (AP Photo/Mahesh Kumar A, File)
Misinformation surges amid India’s COVID-19 calamity

Distrust of Western vaccines and health care also driving misinformation

FILE - In this Friday March 6, 2020, file photo, Britain’s Prince Harry visits the Silverstone Circuit, in Towcester, England. In an episode of the “Armchair Expert” podcast broadcast Thursday, May 13, 2021, Prince Harry compared his royal experience to being on “The Truman Show” and “living in a zoo.” (Peter Nicholls/Pool Photo via AP, File)
Prince Harry thought about quitting royal life in his 20s

Feared his family would have to deal with the same spotlight that was on his late mother

Opinion
Mental health: Gossiping, backbiting and forming factions is unhealthy

We all know of dysfunctional organizations, which can be as troublesome as… Continue reading

Family practice physician Christina Tuomi, D.O., (right) gets Homer's first dose of Pfizer's COVID-19 vaccine from Emergency Department nurse Steve Hughes (left) on Thursday, Dec. 17, 2020 at South Peninsula Hospital in Homer, Alaska. Tuomi has been the hospital's medical lead throughout the pandemic. (Photo courtesy Derotha Ferraro/South Peninsula Hospital)
Alberta physicians: Vaccines are our path forward

As the AMA representatives for Alberta’s family physicians, we were immensely relieved… Continue reading

Vancouver Canucks' Nils Hoglander, right, is checked by Calgary Flames goalie Jacob Markstrom during third-period NHL hockey action in Calgary, Thursday, May 13, 2021.THE CANADIAN PRESS/Jeff McIntosh
Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Lindholm, Tkachuk lead Calgary Flames in 4-1 win over Vancouver Canucks

Most Read