Air Canada To Lay Off Over 16,000 Employees, Cut Capacity By Up To 90%

Anna Kroupina, Open Jaw

Air Canada will temporarily lay off 15,200 employees and furlough 1,300 managers due to the "unprecedented impact of COVID-19" upon its business.

The workplace reductions will be effective "on or about" 3APR and are intended to be temporary. 

The carrier will also will reduce capacity for the second quarter of 2020 by 85% to 90% compared to last year's Q2. 

"The unpredictable extent and duration of the COVID-19 pandemic requires a significant overall response. To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while," said Calin Rovinescu, President and Chief Executive of Air Canada. 

"It will help ensure that Air Canada can manage through this crisis that is affecting airlines everywhere. We believe that the temporary nature of these reductions, many achieved through voluntary programs, combined with other mitigation measures, will position us to restore regular operations as soon as the situation improves.

"I understand and regret the impact this will have upon our employees and their families. I thank all of our employees, as well as union leaders, for working with us constructively to quickly implement these measures."

In addition to the temporary workforce reductions, other measures implemented by Air Canada include: 

  • A company-wide cost reduction and capital deferral program, targeting at least $500 million. 
  • Drawing down operating lines of credit of approximately $1 billion, to provide additional liquidity. 
  • Rovinescu and Michael Rousseau, AC's Deputy Chief Executive and Chief Financial Officer, have agreed to forego 100% of their salary. Senior Executives will forego between 25% - 50% of their salary while members of AC's Board of Directors have agreed to a 25% reduction. All other AC managers will have their salaries reduced 10% for the entire Q2. 

 

Subject to further government restrictions, while the crisis is ongoing Air Canada says it intends to continue to serve a small number of international and U.S. trans-border destinations from select Canadian cities after 1APR, 2020 in addition to a reduced network in Canada.  

 

Air Canada will also continue to operate special international flights in collaboration with the Government of Canada to repatriate Canadians abroad as well as cargo-only flights to ensure the continued movement of essential goods, including medical supplies. 

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.

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