TRANSAT TEMPORARILY LAYS OFF 70 PER CENT OF CANADIAN WORKFORCE.
All flights grounded from April 1-30
• Vacation travel operator Transat A.T. has temporarily laid off 3,600 employees, making up 70 per cent of its Canadian workforce, as travel restrictions due to COVID-19 erase demand for flights and hotels.
The Montreal- based airline said Monday it will ground all flights between April 1 and April 30, but will operate select flights until then in order to repatriate customers to their home countries.
Transat had 65,000 customers abroad in sunny or European destinations as of last Wednesday but by Sunday returned about 40,000 to Canada.
The layoffs include flight crews and office workers. Some are effective immediately, while others have been given up to one month’s notice. Executives that weren’t laid off took pay cuts.
“We are very much in agreement with the measures being taken to fight the spread of the virus and protect the public’s health,”
Transat chief executive Jean-Marc Eustache said in a statement.
“These measures have forced us to totally suspend our operations. We have done this in such a way that none of our customers are stuck far from home, and we are in the process of bringing them back.”
Eustache thanked flight crews for continuing to work in stressful and difficult conditions.
Transat joins Air Canada and Westjet in announcing drastic layoffs in response to the travel bans. Air Canada plans to axe more than 5,000 jobs and Westjet has said it could cut more than 50 per cent of its staff.
The chaos comes during a planned merger between Air Canada and Transat. Air Canada bought Transat at $ 18 per share in an allcash deal last year. Transat’s shares have since plummeted to $ 6.91 per share at market close on Friday, although Eustache has said the current situation will not affect the deal, which is expected to close by the first half of 2020.
The International Air Transport Association says the aviation sector’s revenue losses will likely exceed its initial estimate of US$ 113 billion, as the “situation has deteriorated significantly.”
“As a result of the current extraordinary travel restrictions, many airlines worldwide are under severe cash flow pressure,” IATA said in a report Monday.
“The limited extent of cash balances means that the industry will need to draw on credit lines or find other means of support during this crisis period.”
The trade association says airline bookings for March have dropped 50 per cent, 40 per cent for April and 25 per cent for May, while 1.1 million flights have been cancelled till at least the end of June.
MANY AIRLINES WORLDWIDE ARE UNDER SEVERE CASH FLOW PRESSURE.