Tuesday, June 17, 2008

Air Canada to cut 2,000 jobs in capacity reduction

Air Canada CEO Montie BrewerCiting the impact of record high fuel prices, Air Canada announced earlier today that it will reduce the size of its fleet and its staff in coming months. The planned capacity reduction will result in cuts of up to 2,000 positions across all levels of the organization, according to an announcement made by Air Canada's President and CEO, Montie Brewer.

"The loss of jobs is painful in view of our employees' hard work in bringing the airline back to profitability over the past four years," said Mr. Brewer. "I regret having to take these actions but they are necessary to remain competitive going forward. Air Canada, like most global airlines, needs to adapt its business and reduce flying that has become unprofitable in the current fuel environment. If fuel prices remain at current levels, we can anticipate further capacity reductions," he added.

According to information released today by Air Canada, in the fourth quarter of 2008 and first quarter of 2009, the carrier plans to reduce domestic capacity by 2.0 per cent, U.S. transborder capacity by 13.0 per cent and international capacity by 7.0 per cent, for a total system capacity reduction of 7.0 per cent for the two quarters compared to the prior year's period.

The revised capacity reduction plan includes the previously announced suspension of Toronto-Rome non-stop service (with resumption planned for the peak summer season) and the withdrawal of Vancouver-Osaka non-stop service effective October 26, 2008. A revised fall and winter schedule, and specifics about fleet reduction, have not yet been announced.

UPDATE July 10, 2008: Air Canada has notified its flight attendants' union of plans to lay off 632 cabin crew. The airline also intends to close its flight attendant bases at Winnipeg and Halifax as of November 1, 2008.

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