More service cuts at Air Canada (TSX:AC).
Canada’s leading airline has announced that it is cutting 1,700 jobs and scaling back its operations a further 25% as the cumulative effects of lockdown restrictions, slumping travel demand and new COVID-19 testing requirements take a toll on the aviation industry.
The 25% reduction in service for the first quarter of 2021 will also impact 200 employees at Air Canada's Express carriers, the company said. With the latest reduction, Air Canada's capacity in the first quarter of 2021 will be about 20% below its capacity during the first quarter of 2019.
The latest service reductions come five days after rival WestJet Airlines (TSX:WJA) announced that up to 1,000 employees will be furloughed, temporarily laid off, put on unpaid leave or have their hours reduced, and that it will chop about 30% of its capacity for February and March and pull 160 domestic departures from its schedule.
Unifor, the union that represents customer sales and service agents and customer relations representatives at Air Canada, said the cuts could have been lessened if Ottawa had developed a plan to support the domestic airline industry.
Air Canada has notified airports in Atlantic Canada this week that it would cut additional routes in the region, suspending all flights in Gander and Goose Bay, Newfoundland, and Fredericton, New Brunswick until further notice.
Air Canada will also suspend all passenger operations to Yellowknife, Northwest Territories as of January 23. The airline is contacting affected customers to offer them options such as refunds or alternative travel arrangements.
