Speaking on an investor call, Air Canada executives said they assume the country's travel restrictions - which have been more strict than those implemented in neighboring United States - will ease somewhat by the fourth quarter.
Once that happens, they said travel patterns should be similar to those in the United States, where a fast vaccine rollout and falling numbers of COVID-19 cases have driven a surge in travel demand.
Meanwhile, the Montreal-based airline is focusing on cargo and domestic flights while slashing capacity for international travel and cutting costs.
Air Canada projects a net cash burn of between $13 million and $15 million per day in the second quarter of 2021.
Operating revenue fell to $729 million in the first quarter from $3.72 billion a year earlier.
Canada's largest carrier reported a loss of C$1.30 billion, compared with C$1.05 billion. Its shares rose 1.3% in early trading.
Hopes that travel restrictions would loosen in time for the peak summer travel season are fading as Canada grapples with a third wave of coronavirus infections.
Only Canadian citizens, residents and essential workers can enter the country. Those entering must complete a 14-day quarantine, and people entering by air must spend up to three days of the quarantine in a hotel, a measure Chief Executive Michael Rousseau called on the government to remove.
"The current mandatory hotel quarantine for arrivals has proven ineffective. It should be eliminated," he told investors.
($1 = 1.2184 Canadian dollars)
(Reporting By Allison Lampert, Shreyasee Raj, Tracy Rucinski; Editing by Shinjini Ganguli and Nick Zieminski)
