Canada’s largest airlines will burn through cash as they endure a long recovery for the industry, S&P Global Ratings said as it downgraded Air Canada and WestJet Airlines Ltd.

Air Canada won’t see revenue and capacity return to last year’s levels until 2023, S&P said in an analysis that led to a one-notch downgrade to BB-. It kept its outlook negative.

Revenue at the Montreal-based carrier is expected to fall 50 per cent to 60 per cent and it could lose as much as $800 million (US$575 million) in earnings before interest, taxes depreciation and amortization this year. Air Canada said last week it will cut 20,000 jobs.

About 70 per cent of the airline’s passenger revenue comes from routes to the U.S. and overseas.

WestJet is more focused on domestic travel, which will likely recover before international routes, the agency said. But the Calgary-based airline has a different problem: its exposure to the depressed economy of Western Canada.

“Beyond the pandemic, sharply weaker oil prices could have a disproportionate effect on the company’s air traffic,” S&P said in a statement. “This stems from approximately 40 per cent of WestJet’s available seat miles touching down in the province of Alberta, where economic conditions are underpinned by the petroleum industry.”

WestJet, which was investment grade before it was taken private in December in a leveraged buyout led by Onex Corp., was downgraded for the second time this year by S&P and is now B- with a negative outlook.