Air Canada cutting about 1,700 jobs as it reduces capacity in response to pandemic restrictions
Airline will operate at about 20 per cent capacity compared with 1st quarter of 2019
Air Canada's cuts to regional routes will have lingering effects long after the pandemic is over, experts said Wednesday, after the airline announced 1,700 job cuts and a further scaling down of operations in response to a new wave of COVID-19 restrictions.
The 25 per cent reduction in service will also affect 200 employees at Air Canada's Express carriers, the company said Wednesday morning.
Air Canada notified airports in Atlantic Canada this week that it would cut additional routes in the region, suspending all flights in Gander, N.L., Goose Bay, N.L., and Fredericton until further notice. It is also suspending passenger service to Yellowknife, Prince Rupert, B.C., and Kamloops, B.C., on Jan. 23.
Lucie Guillemette, Air Canada's executive vice-president and chief commercial officer, said in a statement that increased travel restrictions by federal and provincial governments have had an immediate impact on the company's bookings.
With the reduction, Air Canada's capacity in the first quarter of 2021 will be about 20 per cent of its capacity during the first quarter of 2019, the company says.
WATCH | Air Canada lays off nearly 2,000:
"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," Guillemette said.
"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."
'We cannot just flip a switch'
But Ian Lee, an associate professor in the Sprott School of Business at Carleton University in Ottawa, said it's not that simple.
"There may be some people that think, 'Oh well, we get past the crisis, we just flip the switch, like electricity after a power failure in our house.' It is not going to be like that."
Lee said the ramp-up will be slow and painful.
"Those planes will have to be taken out of storage," he said. "They're going to have to be inspected. ... The pilots all have to be retrained, recertified under the rules, the same with the flight attendants. There's a huge amount of ramp up and it's not something you do in 24 hours or in two days or five days.
Areas such as northern B.C. and the Maritimes aren't likely to see a restoration of service as it was pre-COVID for "quite some time," he said.
Monette Pasher, executive director of the Atlantic Canada Airports Association, said in a statement that the repercussions of the service cuts would be felt for years to come in communities in the region.
"We cannot just flip a switch to turn air service back on when we get to the other side of this pandemic," Pasher said. "We are going to have a long, hard road ahead of us to rebuild air access for our region."
The airline said it is contacting affected customers to offer them options such as refunds or alternative travel arrangements.
Kamloops mayor 'beyond disappointed'
Ed Ratuski, managing director of the Kamloops Airport, said he expects the cutbacks to remain in effect through March.
"Our concern is ... what kind of impact this reduction in service will have on workers who have to travel by air to support their families locally," he said.
Kamloops Mayor Ken Christian said he was "beyond disappointed" to see the cancellation of the city's only direct flights to Vancouver. Kamloops is about 250 kilometres northeast of Vancouver.
"When you have places, like the B.C. Lottery Corporation, that have their provincial headquarters in Kamloops, it's just unfathomable that you would have no air access for them to shuffle employees back and forth," he said.
Carriers have been wrestling with a slump in demand and passenger confusion following the Jan. 7 introduction of new Canadian rules requiring travellers to test negative for the novel coronavirus before boarding a plane bound for the country.
Privately held WestJet Airlines said last week it would reduce capacity, with schedule cuts that would mean furloughs, layoffs, unpaid leaves or reduced hours for about 1,000 employees.
The federal government is "disappointed by airlines' decisions to cancel more regional routes," a spokesperson said by email.
"COVID-19 has led to an unprecedented situation in the aviation sector," said Allison St-Jean, a press aide for new Transport Minister Omar Alghabra. "We are fully seized with the issue of how hard the air sector has been hit because of COVID-19, and we are committed to providing assistance to Canada's air sector."
Joyce Carter is president and CEO of Halifax International Airport Authority, which has seen its business shrink from 17 carriers and 46 destinations down to two carriers and four destinations.
She said the federal government clearly has a role to play.
"Aviation is federally mandated," said Carter, who is also chair of the Canadian Airports Council. "This airport is owned by the federal government. We manage it on their behalf."
The Canadian Chamber of Commerce also renewed its calls for federal support of the sector.
"The implications of today's news about decreased capacity and further workforce reductions at Air Canada are deeply troubling," president and CEO Perrin Beatty said in a statement. "With cuts to regional air service in Atlantic Canada and across the country, the situation is much more than just an air industry issue — pockets of our country risk being disconnected from others."
Beatty said the government needs a restart plan for travel that includes rapid testing.
Jerry Dias, head of the Unifor trade union, said Air Canada's move "leaves airline workers with continued
disappointment in the federal government's lack of action."
With files from Reuters and The Canadian Press