Air Canada is to reduce
capacity for Q2 2020 by 85%-90% compared to last year, and will
place 15,200 members of its unionized workforce on Off Duty Status
and furlough about 1,300 managers.
The workplace reductions will be effective on or
about 3 April 2020 and are intended to be temporary.
“The unpredictable extent and duration of the
COVID19 pandemic requires a significant overall response,” said Calin Rovinescu,
President and Chief Executive. “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. 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 … I understand and regret the impact this will have upon our
employees and their families. I thank all of our employees, as
well as union leaders, for working with us constructively to
quickly implement these measures.”
In addition to the
temporary workforce reductions, other measures implemented by Air
– A company-wide cost reduction and capital
deferral program, targeting at least $500 million.
– Drawing down operating lines of credit of
approximately $1 billion, to provide additional liquidity.
– Mr. Rovinescu, Air Canada’s President & Chief
Executive Officer, and Michael Rousseau, Air Canada’s Deputy Chief
Executive and Chief Financial Officer, have agreed to forgo 100%
of their salary. Senior Executives will forgo between 25% – 50% of
their salary while members of Air Canada’s Board of Directors have
agreed to a 25% reduction. All other Air Canada managers will have
their salaries reduced 10% for the entire Second Quarter.
Canada intends to continue to serve a small number of
international and U.S. trans-border destinations from select
Canadian cities after 1 April 2020 in addition to a reduced
network in Canada.
The airline says it will also continue to
operate special international flights in collaboration with the Government of Canada to repatriate Canadians abroad as well as
cargo-only flights to ensure the continued movement of essential
goods, including medical supplies.