Air Canada has announced today that it will implement additional capacity and workforce reductions in response to the ongoing COVID-19 crisis. The airline has revealed plans to cut network capacity by a quarter, and is estimating around 1,700 jobs to be affected. Executive Vice President and Chief Commercial Officer Lucie Guillemette said this was not the news the airline was hoping to announce so early in the new year.
Flights for Q1 slashed by a quarter
Canada’s largest airline, Air Canada, has announced today that it will reduce its planned flight capacity for the first quarter of the year by 25%. Already operating a pared-back schedule, these cuts will see the airline flying just 20% of its 2019 capacity across the quarter. Some 1,700 employees will be added to the furlough list as a result.
The trigger for these deeper cuts is the requirement by the government of Canada for incoming travelers to present a negative COVID-19 test before departure. Air Canada had joined with other parties, including Sunwing, Air Transat and IATA, to lobby for the implementation of the ruling to be extended by 11 days. They were unsuccessful in swaying Ottawa’s decision.
Lucie Guillemette, Executive Vice President and Chief Commercial Officer at Air Canada, commented on the plans, explaining that,
“Since the implementation by the Federal and Provincial Governments of these increased travel restrictions and other measures, in addition to the existing quarantine requirements, we have seen an immediate impact to our close-in bookings and 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.
“We regret the impact these difficult decisions will have on our employees who have worked very hard during the pandemic looking after our customers, as well as on the affected communities.”
Air Canada hasn’t revealed which routes or services will be affected. However, local press is reporting a swathe of routes set to end in the coming days. CBC reports services between Gander and Halifax, Goose Bay and Halifax, and St. John's and Toronto ends on January 23, and separately that Air Canada is suspending passenger service to Yellowknife on the same day. TravelPulse further reports a suspension of all flights to Fredericton.
The airline says that affected customers on all routes will be contacted and given options on how to proceed. These options, it says, will include cash refunds as well as options to take alternative routings.
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Hope from the vaccine
So far, Canada has approved two vaccines for use – the Pfizer and Moderna iterations. Today, the nation had already vaccinated a reported 1% of the population, just 29 days since the program began. With high hopes that the rollout will continue at pace, Air Canada is hoping these cuts will be temporary in nature.
By September, Guillemette noted, the airline was expecting most of Canada to have received the vaccine and heading into the winter period with renewed vigor. She said,
“While this is not the news we were hoping to announce this early into the year, we are nonetheless encouraged that Health Canada has already approved two vaccines and that the Government of Canada expects the vast majority of eligible Canadians to be vaccinated by September. We look forward to seeing our business start to return to normal and to bringing back some of our more than 20,000 employees currently on furlough and layoff.
The move by Air Canada comes just days after rival WestJet announced it would drastically cut flight capacity, leading to the loss of 1,000 jobs. While the vaccine rollout is certainly providing hope for Canadian aviation, it seems a long way off at the present time.