Air Canada temporarily lays off additional 15,200 employees

Mar 30 2020, 1:41 pm

Air Canada will be temporarily laying off another 15,200 employees due to the massive losses that the company has suffered as a result of the COVID-19 pandemic.

In an update posted to their website on Monday, Air Canada officially announced that the airline is reducing its capacity for the Second Quarter of the year by 85-90% compared to Q2 of 2019, and will place 15,200 unionized workers on “Off Duty Status” and furlough about 1,300 managers.

These reductions will come into effect “on or about” April 3, 2020, and are meant to be temporary.

“The unpredictable extent and duration of the Covid-19 pandemic requires a significant overall response,” Valin Rovinescu, president and chief executive officer of Air Canada said 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.”

Rovinescu continues that these temporary layoffs will aid in ensuring that Air Canada will be able to manage through the coronavirus crisis that has taken serious tolls not only on their airline but on every operator within the industry.

“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.”

On top of the temporary reductions in the workforce, Air Canada will also be implementing other measures.

The airline will be executing a company-wide cost reduction and capital deferral program that will target at least $500 million.

It will also provide additional liquidity through drawing down operating lines of credit of approximately $1 billion.

Additionally, Rovinescu, as well as Michael Rousseau, deputy chief executive and chief financial officer of Air Canada, have agreed to forgo 100% of their salary.

Senior executives will give up 25-50% of their salaries while members of Air Canada’s Board of Directors have agreed to a reduction of 25%.

The move comes just a week after the second-largest airline in Canada, WestJet laid off 6,900 employees in response to the decrease in passenger business as well as cost-saving measures brought on by the coronavirus pandemic.

According to a media brief, WestJet issued an internal communication across the company to request that employees volunteer to “support the survival of the airline” through selecting from several options, including early retirement, unpaid leave of absence, voluntary resignation (early out), reduced working hours, or reductions in pay.

“I understand and regret the impact this will have upon our employees and their families,” Rovinescu stated.

“I thank all of our employees, as well as union leaders, for working with us constructively to quickly implement these measures.”

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