Air Canada to furlough up to 600 pilots, union says

WestJet says 6,900 staff to leave

TORONTO/MONTREAL • Air Canada has reached an agreement that would allow the airline to furlough up to 600 pilots because of plummeting traffic due to the coronavirus, according to a letter from the union reviewed by Reuters on Tuesday.

The country’s largest carrier is slashing capacity as the coronavirus outbreak forces many governments to impose travel restrictions.

The agreement covers six months from April through the end of September, according to the letter dated Monday.

Air Canada did not immediately respond to requests for comment.

Carriers are making unprecedented cuts to flights, costs and staffing while stepping up calls for emergency aid from governments to save jobs.

Toronto-based Porter Airlines suspended flights on Tuesday.

Privately held WestJet Airlines, recently acquired by Onex Corp., said on Tuesday that 6,900 employees would leave the company, with 90 per cent departing voluntarily. The country’s second-largest carrier had about 14,000 employees before the announcement.

Global passenger capacity fell by 35 per cent last week, the worst since the start of the crisis, according to data from airline schedules firm OAG, which said deeper cuts were likely in the coming weeks.

Air Canada reached the agreement as its April schedule was reduced by 80 per cent and the carrier has suspended its leisure service Rouge, the union letter said.

The deal “represents our best efforts to balance our responsibility to our members, alongside the requirement for the company to reduce its costs as quickly as possible in line with the schedule reduction and for its long-term viability.”

Pilots on furlough continue to accrue seniority and would be later recalled in order of seniority.

Air Canada shares were up about 20 per cent in afternoon trade, but still down more than 60 per cent this year.

The Air Canada Pilots Association, which represents 4,400 members, said in a statement on Tuesday that the agreement would reduce pay across the group, simplify contract language to allow pilots to retire earlier and provide “for orderly redundancies” up to a maximum of 600 positions in the coming months.

“Due to the complexity of pilot training, the precise number of positions immediately affected is still unclear and we will be working with Air Canada in the coming days and weeks to better understand the situation,” Capt. Michael McKay, chair of the Air Canada Pilots Association, said in the statement.

BRENT LEWIN / BLOOMBERG FILES Air Canada is putting 600 pilots on furlough over the coronavirus pandemic, and Porter Airlines said Tuesday it is suspending all flights.