Air Canada announced that, from April 3rd, it will have to furlough employees due to the “unprecedented impact of COVID-19.” This will include 15,200 of its unionized workforce moving to “Off Duty Status” while another 1,300 managers will face a furlough. These are temporary measures according to the airline. Although, given the fluctuating nature of the situation.
President and CEO Calin Rovinescu said.
“In addition to these furloughs, Air Canada is taking other steps. It ended the share repurchase program on March 2nd, engaged in company-wide cost reduction and capital deferral program which saves about $500 million CAD, drawing down operating lines of credit to the tune of $1 billion CAD, and cutting salaries of executives. The CEO and Deputy CEO will cut their salaries by 100% while the Board of Directors will cut theirs by 25%. Senior Executives will cut 25-50% of their salary. Meanwhile, Air Canada managers will cut their salaries by 10% for the entire second quarter”.
Significant capacity reductions at Air Canada
Amid the ongoing crisis, Air Canada will cut its capacity in the second quarter of 2020 by 85-90% compared to operations in the same time last year. With so few flights operating, it makes sense for Air Canada to furlough some staff until capacity can be restored.
For 16,500 Air Canada employees, this cannot be an easy time. The situation is incredibly fluid and it is unclear how long these furloughs will last and whether more will be necessary as the airline seeks to survive with significantly reduced operations.
Source: Simple Flying