Air Canada will be reducing its capacity by 85-90 percent in the second quarter of 2020 due to the ongoing coronavirus pandemic. It will place 15,200 members of its unionized workforce on Off Duty Status and furlough about 1,300 managers. These changes in the workplace will be temporary, going in effect on April 3, 2020.
Aside from the temporary layoffs and reductions, other measures taken by Air Canada include: A company-wide cost reduction and capital deferral program, targeting at least US$500 million; Drawing down operating lines of credit of approximately US$1 billion, to help provide additional liquidity.
Top management to give up 100 percent of their salary
Top management has agreed to forgo 100 percent of their salary. The airline has said that it will continue to fly special international flights in collaboration with the Government of Canada to repatriate Canadians abroad. It will also operate cargo-only flights to ensure the continued movement of essential goods, including medical supplies.
Calin Rovinescu, President and Chief Executive, Air Canada said, “The unpredictable extent and duration of the COVID19 pandemic requires a significant overall response. 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.”
He added: “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.”