Canadian charter carrier Skyservice Airlines, Inc. abruptly ceased operating and filed for receivership yesterday, March 31, 2010. The company was burdened by large debt obligations, and what media reports refer to as the airline's "unsustainable" cost structure. The airline's closure will put roughly 1,000 staff out of work.According to receivership documents filed with the Ontario Superior Court of Justice, Airservice had 1,088 employees on March 31, 2010, of which approximately 74% are unionized. Statements to the court indicate that all employees have been paid for their work through March 31. Plans are underway to repatriate employees posted overseas.
The majority of Skyservice employees will be terminated, although about 50 will be retained temporarily to assist with the wind-down of operations.
According to a CTV News article about the demise of Skyservice, the company went through a series of cost-cutting measures in 2008 and 2009:
Starting in the fall of 2008, management cancelled snacks at internal meetings, restricted BlackBerry use, lowered office thermostats and scrapped company-paid parties in favour of potlucks. Besides issuing layoff notices, Skyservice also instituted a hiring freeze and reduced some salaries. Restrictions were even placed on printing, photocopying and long-distance calls, but the relative small savings weren't enough to save the airline from entering a tailspin into receivership.The Skyservice Cabin Crew Association issued the following statement:
The Skyservice Cabin Crew Association ("SCCA") is deeply saddened by today's announcement that Skyservice Airlines Inc. (the "Company") has been petitioned into receivership. The SCCA has worked diligently with the Company and the other employee stakeholders over the past year to find $10 million of savings for the Company. Unfortunately, even those concessions were not enough to prevent today's event. Many of our members have been with the Company since its inception in 1994. They and all of our members have devoted and committed themselves with enormous energy to the airline and its passengers. For us, this last chapter is a tragedy. The SCCA has retained the law firm of Koskie Minsky LLP to represent the interest of its members in the receivership process. We will ensure that our members' rights are protected to the full extent of the law.In a statement of its own, the company said, "Skyservice Airlines and the receiver are committed to winding up the business in an orderly and responsible manner. The company and the receiver will continue to treat employees and other stakeholders fairly and in a transparent manner throughout this process."
Best of luck going forward to all Skyservice crew members and staff.
