Canada’s largest carrier said Monday it would lay off 15,200 unionized staff and another 1,300 managers as it copes with the downturn caused by the COVID-19 pandemic.
“The unpredictable extent and duration of the Covid-19 pandemic requires a significant overall response,” said Air Canada President and Chief Executive Officer Calin Rovinescu in a statement.
“To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while. It will help ensure that Air Canada can manage through this crisis that is affecting airlines everywhere.”
Canada’s aviation industry has shed almost 45,000 jobs in the past 10 days, according to a tally by Western Aviation News based on publicly-reported data. The actual number is likely far higher.
Just between them, the country’s two largest carriers – Air Canada and Westjet – have laid off more than 23,000 people. Westjet has abandoned international routes and scaled back to the size it was in 1996 while Air Canada projects it will fly just 1,600 domestic flights next month or less, plus a greatly reduced “air bridge” service between Canada, the United States, and a handful of overseas destinations.
“We believe that the temporary nature of these reductions, many achieved through voluntary programs, combined with other mitigation measures, will position us to restore regular operations as soon as the situation improves,” said Rovinescu.
He said the airline has drawn down a $1 billion line of credit and is looking to save $500 million in operating and capital costs. Rovinescu will forgo his salary for three months, executives will take a pay cut between 25 and 50%, while managers have been told their pay will be cut 10% for the entire second quarter of the year.
At the same time, the airline said it will review a government policy offering announced Monday to subsidize 75% of employee salaries up to certain limits, to “assess the impact of this on its mitigation plans.”
The job losses don’t just affect the airlines. The country’s airports are also feeling the pain. Small airports, such as Grande Prairie, are coping by reducing operating hours for scheduled flights. Calgary has laid off 100 staff, and Vancouver International has halted all construction projects and cancelled contracts.
The chief executive of Vancouver International Airport, Craig Richmond, said last week he expects half of the 26,000 people who work on Sea Island where the airport is located to be laid off.
The Canadian Airports Council has estimated airports will lose $2.2 billion in revenues as a result of the pandemic.