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Air Canada to cut approximately 1,700 jobs

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Air Canada announced Wednesday that it would cut its capacity by 25 per cent, resulting in the loss of about 1,700 jobs at the airline.

It’s the second job-cut announcement from a Canadian airline in less than a week.

On Friday, Calgary-based airline WestJet announced it would reduce its workforce capacity by 1,000 employees in an attempt to stay afloat amid continued COVID-19 restrictions that have choked the travel industry.

Read more: What does the future of Canada’s airline industry look like?

Last month, the federal government announced that Canada would require anyone entering the country to obtain a negative COVID-19 test before boarding their flight. The new rules kicked in on Jan. 7.

Air Canada’s executive vice-president, Lucie Guillemette, said the enhanced travel rules, “in addition to the existing quarantine requirements,” have had an “immediate impact” on the company’s bookings.

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“(We) 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,” Guillemette said in a statement.

The 25 per cent reduction in service will also affect 200 employees at Air Canada’s Express carriers. The airline said it is working with its unions on mitigation programs.

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Airlines have pointed the finger at unclear rules and a lack of federal support as reasons for the dramatic reduction in service.

WestJet’s CEO laid the blame squarely on “incoherent” policy from Ottawa as the reason behind his carrier’s cuts to staff and flights. Ed Sims said trip cancellations and reductions in new bookings accumulated immediately after the federal government announced its new inbound testing rules.

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WestJet said it has reduced flights by more than 80 per cent compared with the same time last year.

The president of CUPE Local 4070, which represents WestJet, Encore and Swoop flight attendants, also took aim at what he called the federal government’s “continued attack on Canada’s airlines.”

“Ottawa has demonstrated zero understanding of the $36 billion in GDP Canada’s airlines contribute to our economy,” Chris Rauenbusch said in a statement to Global News on Friday.

“If this industry collapses, not only will jobs in our sector vanish, but so will jobs across multiple other sectors.”

Read more: Airline unions ask Ottawa for $7B in loans to boost industry

With passenger levels on Canadian commercial airlines down by as much as 90 per cent year-over-year, there’s no question the airline industry has been hit hard by the pandemic.

When asked about WestJet’s cuts last week, Prime Minister Justin Trudeau pointed out $1.5 billion in aid that has flowed to the aviation industry through the federal wage subsidy and other relief measures, though none were specific to the ailing sector.

He said discussions about an industry-specific support package continues but is contingent on carriers providing refunds to passengers whose flights were cancelled.

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“People shouldn’t be travelling, and that of course is a direct challenge for the airline industry to manage through,” Trudeau told reporters in Ottawa.

“At the same time we’ve made it very clear that we expect people to be reimbursed (for cancelled flights), we expect regional routes to be protected… We expect certain things from the airline industry.”

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Some regional routes have already fallen amid carriers’ attempts to reduce costs.

Earlier this week, Air Canada notified airports in Atlantic Canada that it would cut additional routes in the region, suspending all flights in Gander, N.L., Goose Bay, N.L., and Fredericton, N.B., until further notice.

The cuts come just days after Air Canada’s latest round of service reductions in Atlantic Canada went into effect on Jan. 11.

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Similarly, WestJet said in October that it would suspend 80 per cent of its Atlantic Canada capacity and lay off 100 corporate employees — after already having laid off an additional 4,000 workers since the pandemic began.

Monette Pasher, the executive director of the Atlantic Canada Airports Association, said in a statement that the repercussions of the cuts would be felt for years to come in communities in Atlantic Canada.

Air Canada is contacting affected customers to offer them options such as refunds or alternative travel arrangements.

— with files from Global News’ Katie Dangerfield and The Canadian Press