TRAVEL Thousands of Air Canada flight attendants to be laid off
MONTREAL Air Canada is laying off more than 5,100 flight attendants as the country’s largest airline cuts routes and parks planes due to the novel coronavirus pandemic, a union official says.
The Canadian Union of Public Employees (CUPE) says the carrier is laying off about 3,600 mainline employees and all of Air Canada Rouge’s 1,549 flight attendants.
The layoffs, effective immediately, will last at least through April, CUPE said. They will impact more than half of the airline’s 9,750 flight attendants.
Air Canada said the layoffs are temporary and employees will return to active duty when the airline is able to ramp up its flight capacity.
On Wednesday, the Montreal-based company said it will suspend the majority of its international and U.S. flights by March 31.
The airline’s stock has plummeted 76 per cent in two months, dropping steeply in the past two weeks as borders close and flight demand plunges.
“This has been the most challenging time any of us will likely ever experience as flight attendants,” Wesley Lesosky, who heads CUPE’S Air Canada component, said in a statement. “Our members have been on the front lines of this crisis since Day 1, and it has been a tough journey ever since. Our hearts go out to all of our members, especially those who fell sick while doing their job.”
Union members facing layoffs or “off-duty status,” will be able to collect employment insurance and access benefits, CUPE said.
Air Canada said it does not have a final tally on the total number of pilots, flight attendants, technical and cargo workers and customer service agents affected.
“In light of the rapidly evolving
COVID-19 global crisis and Air Canada’s significantly reduced network, Air Canada has initiated discussions with its unions to begin placing employees on temporary, off-duty status,” the airline said in an email Thursday night.
Until that point, the company payroll numbered 27,830 unionized workers, including the laid-off flight attendants.
Going into this virus, they were probably in the best shape they’ve ever been, both financially and competitively.
Air Canada’s credit rating was put under review for downgrade by Moody’s Investors Service on Wednesday.
Still, it has access to $7.3 billion in cash, which could take it through the summer, according to Doug Taylor, a Canaccord Genuity analyst in Toronto.
“Going into this virus, they were probably in the best shape they’ve ever been, both financially and competitively,” he said.
“Air Canada could be one of the last ones standing.”
Nevertheless, its debt has sold off in the market turmoil as investors price in new risks.
A bond issue due in April 2021 is now trading at 94 cents on the dollar to yield 14 per cent, according to Bloomberg data.
That debt was worth 105 cents at the beginning of March.