A leaked internal memo reveals that Air Canada plans to layoff between 50 to 60 per cent of its workforce in response to the continued disruption being wreaked upon the aviation industry by the COVID-19 pandemic. The dramatic mass redundancy plan could come into effect as early as June 7 according to the emailed note sent to staffers on Friday afternoon.
Earlier this month, Air Canada reported its first quarterly loss in more than six years, announcing that it had made an operating loss of $433 million in the first quarter of 2020. The airline has slashed capacity by around 95 per cent, grounded the vast majority of its fleet and plans to accelerate the retirement of 79 older aircraft.
After explaining the devastating impact that the pandemic has had on its business, the memo told staffers: “We therefore took the extremely difficult decision today to significantly downsize our operation to align with forecasts, which regrettably means reducing our workforce by 50 to 60 per cent.”
“We estimate about 20,000 people will be affected,” the email continued. The minimum number of job losses being considered is around 19,000, while that number could rise to 22,800 depending on how the situation develops.
In March, Air Canada temporarily stood down a total of 15,200 workers without pay as flight schedules were slashed and the true scale of the pandemic became apparent. Employees were thrown a lifeline when Air Canada signed under to a government-funded wage subsidy program but the airline might not extend its participation in the scheme past June 7.
Flight attendants and other frontline workers have been asked to take unpaid leave for up to two years in order to avoid involuntary redundancies.
“We know this news is not what any of us were expecting,” an email from the Candian Union of Public Employees (CUPE) said in reaction to Air Canada’s plans.
“The reality is that COVID-19 has severely impacted the demand for air travel over the past few months and into the foreseeable future. As such, there is no denying that we are dealing with the largest surplus of cabin personnel in our history,” the note continued.
The chief executive of Air Canada, Calin Rovinescu recently said the airline’s employees were “living through the darkest period ever in the history of commercial aviation.” Rovinescu does not believe there will be a significant recovery in air travel demand for at least three years.
