Air Canada to cut jobs amid coronavirus restrictions
Air Canada said on Wednesday it would cut first-quarter capacity by an additional 25 per cent as measures to combat COVID -19 hit bookings, while two wellplaced sources said talks over a federal aid package had stalled.
Air Canada and rival Westjet Airlines — faced with huge slumps in demand — have been negotiating with the Liberal government since November. Progress is very slow amid disagreements over what the feds should offer, said the sources.
Air Canada said capacity in the first quarter would be about 20 per cent of what it was during the first three months of 2019. The latest move by Canada's biggest carrier will mean
a workforce reduction of about 1,700 employees.
Westjet said last week it would reduce capacity, with scheduled cuts that would mean furloughs, layoffs, unpaid leaves or reduced hours.
The Liberal government says it is prepared to help the carriers but insists they reinstate regional routes they have suspended amid low demand, and refund passengers for tickets they can no longer use.
One source familiar with the talks said Air Canada wanted the feds to offer low-cost loans, citing what France, the Netherlands and the United States have done. “The airlines have not bent at all,” said the source, who requested anonymity given the sensitivity of the talks.
The feds would only agree to better terms if there were “an awful lot more extracted from the airlines,” the source added.
Air Canada said the job and route cuts “better reflect expected demand” and will “reduce cash burn.” It was not immediately available for comment about government talks.
Jerry Dias, head of the Unifor trade union, said Air Canada's move “leaves airline workers with continued disappointment in the federal government's lack of action.”