[Canada] Leak Reveals 20,000 Impending Layoffs At Air Canada

21 MAY 2020

The leak of a recent company memo has revealed that Air Canada intends to cut approximately 20,000 jobs from its workforce within the next three weeks, Simple Flying reports.

Air Canada has a total employee count of over 38,000 so this is a cut of more than half of the airline’s workers. The job losses are said to be a response to the significant drop in passenger air travel in recent months as COVID-19 travel restrictions came into effect.

According to reporting by CBC News, Craig Landry - Air Canada’s executive vice-president of operations - said in the memo, “Sadly, today the hard truth is that by every indicator we have available to us, we believe that we will be materially smaller for at least three years.”

The memo reportedly echoes the words of CEO Calin Rovinescu, who - during his first-quarter earnings call - remarked that Air Canada was in ‘the darkest period ever’ in the history of commercial aviation. 

Mr Landry’s estimate of a three-year recovery period reflects Mr Rovinescu’s outlook last month, he said it will take a minimum of three years before 2019 levels of revenue and service return. Mr Landry also says in the memo that the airline has been losing C$22 million a day.

Within the memo, the airline said the decision was made after a “fundamental review of what [must be done] to successfully emerge from this crisis and begin rebuilding our airline.”

Air Canada responded to the leaked memo in a statement to the CBC on May 15 saying, “We, therefore, took the extremely difficult decision today to significantly downsize our operation to align with forecasts, which regrettably means reducing our workforce by 50 to 60 per cent... We estimate about 20,000 people will be affected.”

The airline says that it is now flying at about 5 per cent of its May 2019 capacity but that it hopes to increase this figure to 25 per cent later in the year. This potential increase depends on the government lifting, or at least easing, travel restrictions. At present domestic travel is allowed but discouraged unless it is essential. Regarding international travel, Canada - in common with many other countries - has closed its borders to non-citizens and non-residents.

In the shorter term, Air Canada has reportedly tried to adapt its operations to this new normal. Some of its passenger aircraft have been converted for cargo-only operations with several Boeing 777s, Airbus A330s, and DHC Dash-8s having seats removed to maximize cargo capacity. (Link via original reporting)

Air Canada has also rolled out a series of health and safety procedures for passengers, under the name “CleanCare+” many of which would increase operational costs for the airline as masks must be supplied for workers. Additionally, all passengers will be given a sanitation kit containing wipes, sanitizer, a face mask, and gloves. Adjacent seats in economy will be blocked off as a social distancing measure. (Links via original reporting)

CBC News has reported that the airline would need to apply for a “group termination waiver” to take the layoff actions outlined in the memo. 

On the subject of large-scale layoffs Canadian labour law says, “When a group termination of employment is planned, a federally regulated employer is required to provide written notice to the Minister of Labour at least 16 weeks before the terminations of employment are to take effect.” (Link via original reporting)

On condition of anonymity, a government source reportedly told CBC News that the government has not yet received formal notice of the layoffs from Air Canada.