Air Canada has announced it will slash capacity by 85-90 per cent and from 3 April will furlough 16,500 employees.
This will include 15,200 of its unionised workforce moving to “Off Duty Status”, while another 1,300 managers will face a furlough.
President and chief executive Calin Rovinescu had the following comment on the situation:
“The unpredictable extent and duration of the COVID-19 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.”
In addition to these furloughs, Air Canada is taking other steps. It ended the share repurchase program on 2 March, engaged in company-wide cost reduction and capital deferral program, which saves about C$500 million, drawing down operating lines of credit to the tune of C$1 billion, and cutting salaries of executives.
Other overnight announcements include:
- Australia’s second airline, Virgin Australia, has asked the Australian government for an $1.4 billion (US$860 million) bailout loan, and has gone into a trading halt on the Australian Stock Exchange pending a market announcement.
- LATAM Airlines Group will reduce its international operations to just five international routes until 30 April, due to travel restrictions worldwide. The group temporarily suspended all other international routes, it said in a statement.
- British Airways is halting flights to Sydney. According to the airline’s booking engine, the last flight it will operate from London will be on 6 April, landing in Sydney on 8 April.
- United Airlines will be operating a mere six daily international services due to the downturn caused by the COVID-19 pandemic. These flights will launch from three United Airlines hubs: Newark, Houston and San Francisco.
- Virgin Atlantic has confirmed that, for the month of April, it will only be operating three routes. The CEO of Virgin Atlantic confirmed it would be grounding at least 85 per cent of its fleet for the month in an attempt to minimise costs. As its commercial operations are cut, the airline has taken to operating cargo flights instead and is placing its fleet into storage.
- European budget airline EasyJet is reported to have grounded its entire fleet due to the slump in travel demand and increasing restrictions on routes it can fly. The UK-based airline will now park up its entire fleet of 344 aircraft for a period of at least two months.
