Air Canada

Air Canada cuts jobs, drops capacity 25%

Air Canada will drop service to eight more Canadian cities, blaming travel restrictions imposed to stop the spread of COVID

Further reductions are expected on routes to the United States and Caribbean

Air Canada cuts
An Air Canada de Havilland Dash 8-400 departs Vancouver International Airport December 24, 2020 (Brett Ballah).

Air Canada announced cuts Wednesday, affecting a total of 1,900 jobs in its mainline and regional operations, blaming government policies for suppressing air travel.

“Since the implementation by the Federal and Provincial Governments of these increased travel restrictions and other measures, in addition to the existing quarantine requirements, we have seen an immediate impact to our close-in bookings and have made the difficult but necessary decision to further adjust our schedule and rationalize our transborder, Caribbean and domestic routes to better reflect expected demand and to reduce cash burn,” said Air Canada Chief Commercial Officer Lucie Guillemette.

Air Canada is dropping service to Gander and Goose Bay, Newfoundland, Fredericton, New Brunswick, and Yellowknife, NWT. These governments have all imposed quarantines or travel restrictions on residents from out of territory.

“The provincial restrictions here have really [put a stranglehold] on travel,” said Monette Pasher, Executive Director of the Atlantic Canada Airports Association, in an interview. “You can’t travel with the 14-day quarantine restrictions that are in place.”

The is the fourth round of air service cuts in 10 months in Atlantic Canada. Westjet suspended most of its service into the region in October.

At the same time, Air Canada is cutting service to Prince Rupert, Kamloops, Comox, and Sandspit, British Columbia, according to reports. B.C. advises against non-essential travel, but has not imposed travel restrictions. The cuts bring the number of suspended or dropped Air Canada domestic destinations to 18. The airline will operate just 20% of its 2019 winter capacity, before the pandemic.

Adding pressure

The move ratchets up pressure on new Transport Minister Omar Alghabra, who was sworn in Tuesday.

“Today’s announcement leaves airline workers with continued disappointment in the federal government’s lack of action to support the industry,” said Jerry Dias, Unifor National President in a statement. Unifor represents airport crews at Air Canada. “For months, we have been demanding that the federal government develop a long-lasting plan and provide financial support to save the industry from total collapse.”

The most recent cuts bring the number of layoffs at Air Canada to almost 22,000.

Former Transport Minister Marc Garneau laid out conditions for airline support more than two months ago. Negotiations have progressed slowly. Ottawa also promised aid for airports in its Fall Economic Statement, but money has been slow to flow.

“We are grateful for that support and we are working through the process with government to determine the support that will be available for airports in this region,” said Pasher in a statement. “Unfortunately though, there was not enough support for medium size or large airports and no news for air carriers other than the wage subsidy support. Half of the employees in our industry are out of work, and as a hardest hit sector, more support is urgently needed for airports and airlines in order to get through this pandemic.”

Collapse in demand

Statistics Canada released grim international arrival data Wednesday.

Canada closed its borders to most non-Canadians early in the pandemic. Most people arriving in the country must also quarantine for two weeks. The government says the policies help halt the spread of COVID-19.

“Although international travel to Canada by air grew steadily since the low reached in April, the number of non-residents and returning Canadians remained well below the pre-pandemic level, plummeting from an annual total of 20.8 million in 2019 to 5.6 million in 2020,” the agency reported.

All sectors of foreign visitors were affected. Only 45,000 arrived in Canada from overseas between October and the end of December. Most of those people arrived from France and the United Kingdom, which are both facing COVID outbreaks, the agency noted. At the same time, only 25,800 people were allowed in from the United States by air.

The number of Canadians returning to Canada reached 217,000 people over those three month. Demand for air travel increased in each of the three months. StatsCan collected the data before Canada imposed a new pre-flight testing regime on international flights.

Pushing for action

Airlines and airports continue to push for a national testing protocol to help re-start air traffic.

“When the airline industry contracts, smaller communities are hit hardest and we have seen this time and time again throughout the pandemic,” said Pasher. Provinces in Atlantic Canada, along with the northern territories, have imposed the harshest restrictions on travel.

“All of the elements are in place at our airports,” she said, pointing to enhanced cleaning and touchless passenger processes. “A lot of our airports have also stepped up to say ‘we’re willing to work together’.”

But it all can’t make up for the lack of passengers.

“There were way too many flights in the Yellowknife market,” Air North chief executive Joe Sparling told the CBC in comments aired Wendesday morning. Canadian North, Westjet, and Air Canada all serve the Northern capital. “There’s not enough traffic to support three carriers. We’ve got two carriers in the Whitehorse market. They’re not enough traffic to support two carriers.

“I think all Canadians airlines in this environment need to find ways to work more closely together,” he said. “Nobody really benefits from all the empty seats flying around.”

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