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Unions slam ‘morally bankrupt’ Air Canada for $10m exec bonuses

written by Isabella Richards | June 2, 2021
A file image of Air Canada Boeing 777-200LR C-FNNH. (Wikimedia Commons/Mark Harkin)
A file image of Air Canada Boeing 777-200LR C-FNNH. (Wikimedia Commons/Mark Harkin)

Air Canada gave its top executives $10 million in special stock bonuses to compensate for their wage cuts.

The Canadian Union of Public Employees said the move was “morally bankrupt” given the airline had received a government bailout and made many employees redundant.

Air Canada though said the payments were for executives who faced a total of $776,723 worth of wage cuts.

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Initially, CEO Calin Rovinescu and deputy CEO Michael Rousseau’s wages were slashed 100 per cent during the early days of the pandemic, then 50 per cent months later.

The top three executives originally lost 50 per cent of their wages, and for the last three months, lost 20 per cent.

This coincided with thousands of employees being laid off completely, leading to unions arguing the payouts are unreasonable.

“Paying out millions in executive bonuses while they kick their workers to the curb and ask the taxpayer to bail them out isn’t just wrong, it’s morally bankrupt,” said Mark Hancock, national president of the Canadian Union of Public Employees (CUPE).

The airline justified these bonuses by stating the executive team “reacted urgently, decisively and skillfully to mitigate the impact of the COVID-19 pandemic on the company”, including taking “industry-leading personal safety and hygiene measures” through investing in adaptive technology.

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Last year, Air Canada received $656 million from the government’s Canada Emergency Wage Subsidy Program, and $5.9 billion from the federal rescue plan announced April this year.

Employees who were laid off were denied access of this subsidy all together, and Air Canada was the only airline to allow that.

Like all airlines, Air Canada was impacted by the pandemic astronomically. Not only were their major job cuts, but it reported an operating loss of $785 million in the third quarter of 2020 alone.

“Total revenue passengers carried declined 88 per cent in the quarter compared to last year’s third quarter. Unrestricted liquidity amounted to $8.189 billion at September 30, 2020,” stated the airline in a report.

The impact extended to 2021 when Air Canada laid off another 1,700 workers, reducing their capacity by an additional 25 per cent.

While the crisis will affect airlines for many years to come, CUPE believes only the top employees of the airline profited from the government assistance, and the rest were left in the dark.

“Our employer turned their back on us, they refused to give us the lifeline the government offered through CEWS, and then they lined their own pockets. It’s just shameless,” said Wesley Lesosky, president of the Air Canada Component of CUPE.

“What makes it even worse is the federal government has just sat there and let it all happen.”

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