Prime Minister Justin Trudeau’s announcement on Monday that Canada is shutting its borders will likely deliver a formidable blow to the airline and hospitality sectors, two industries already hit hard by the current coronavirus pandemic.
While many Canadians are worried about the prospect of job losses and reduced income, many hotel workers have already received layoff notices, said Unifor president Jerry Dias.
“Our members at hotels are getting laid off everywhere,” he said.
Hotels across the country are “basically empty,” said Dias, adding that Unifor represents around 11,000 workers in the industry.
Airlines are also likely to announce job cuts.
An internal memo sent to union officials and obtained by Canadian Press says that travellers are rebooking “in such massive numbers” that the situation became grave “overnight.”
Chris Rauenbusch, president of CUPE 4070 — which represents WestJet cabin crews — says that daily conversations with senior management alerted him to the “severe” situation, which has also seen new bookings dry up.
CUPE told Global News it doesn’t know of any planned layoffs at Air Canada.
“At this time, we have not been approached by Air Canada about any layoffs,” Wesley Lesosky, president of the Air Canada component of CUPE, told Global News via email. “If we are, our members should know that we, as a union, will do everything in our power to defend their jobs and protect their livelihoods.”
Air Canada mentioned “workplace reductions” as part of cost-cutting measures meant to blunt the impact of the COVID-19 outbreak on its business.
In a news release on Monday, Air Canada said it expected a capacity reduction of 50 per cent in the April-to-June period. The company also withdrew its first quarter and full-year 2020 guidance, as well as its full-year 2021 guidance.
“COVID-19 presents the global airline industry with unprecedented challenges, compounded by uncertainty as to the extent of its effects,” said Calin Rovinescu, president and chief executive officer of Air Canada, in a statement released before Ottawa announced it was shutting the border.
Trudeau said Canada will be closing its borders to people who are not citizens or permanent residents of Canada with exceptions for air crews, diplomats, immediate family members and U.S. citizens. Ottawa is also restricting the number of Canadian airports receiving international flights to four: Pearson International Airport in Toronto, Vancouver International Airport, Montréal’s Pierre Elliott Trudeau International Airport and Calgary International Airport.
Also on Monday, European Commission president Ursula von der Leyen proposed a 30-day ban on non-essential travel to the European Union.
Air Canada told Global News it couldn’t offer comment beyond what it said in the release about whether it is preparing for job cuts and the extent of any planned layoffs.
Transat A.T., which operates under the Transat and Air Transat banners, said the company cannot answer that question for now.
“We are currently working on scenarios and will communicate as soon as we have the information,” the company said. “We are discussing with the various levels of government regarding all possible forms of support to help the company and its employees weather the situation.”
On March 12, Transat said revenue was up 7 per cent in the first three months of 2020 compared with the same period in 2019 thanks to an 11 per cent increase in the number of travellers to its “sun destinations program.”
However, Transat said daily booking had dropped lower than in 2019 starting on Feb. 24 and that the difference had “increased significantly” in recent days.
Both Air Canada and Transat said sharply lower fuel costs were resulting in cost savings.
In the U.S., major airlines sought a U.S. government bailout of more than $50 billion as the White House is urgently drafting a financial assistance package in the wake of the steep falloff in U.S. travel demand.
Airlines for America, the trade group representing American Airlines, United Airlines Inc., Delta Air Lines Inc., Southwest Airlines Co. and others, warned that without action, all of their members could run out of money by year-end — and even sooner if credit card companies started withholding payments.
In Canada, Dias predicted airlines would begin to announce layoffs “fairly soon.” However, he added Unifor does not expect major impacts on the customer sales and service agents his union represents within the airline industry.
“That would only be because of the amount of phone calls that our members will be taking from the flying public asking what’s going on with the flights,” Dias said.
In the hospitality industry, Dias said casino workers are also being hard hit.
Ontario announced on Sunday it would temporarily close all casinos, while major casino operators have announced temporary shut-downs in British Columbia and Quebec.
Many of those laid off from hotels and casinos are part-time workers who do not qualify for Employment Insurance benefits, Dias said.
“So here’s the most vulnerable of our society without any safety net.”
— With files from Hannah Jackson at Global News and Reuters