Air Canada to reduce flight schedule by 20 per cent system-wide

Air Canada and Air Canada Regional have announced layoffs for a total of 9,000 employees subject to ongoing mitigation discussions with the unions and the government.

The job reduction program announced in August, accounting for 4,000 of the 9,000 total, is being accelerated as a result of the impact of the September 11 attack on the U.S. The carrier has also announced an overall network schedule reduction, including that of its regional airline, of 20 per cent including the previously announced 20 per cent cut to transborder services. As part of this action a total of 84 aircraft will be removed from the combined fleet.

Air Canada’s entire DC-9 fleet of 17 aircraft as well as its 38 B737-200s will be removed from the fleet. In addition, Air Canada Regional’s entire F28 fleet (19 currently operating) will be grounded on an accelerated basis while its fleet of 10 BAE146s will be grounded as soon as possible based on training and operational requirements.

Further fleet reductions may follow.

In a conference call, Air Canada CEO Robert Milton told reporters that the additional layoffs were unrelated to the recent merger with Canadian Airlines.

“This is not an Air Canada issue, this is a global issue,” stressed Milton.

“At this stage we’re implementing just a general decrease in capacity though there have already been some seasonal cancellations. Absolutely and emphatically there could be further layoffs. We’ve made an adjustment based on what we’re seeing, but we haven’t seen US retaliation yet. I am hoping there won’t be further layoffs,” he said.

Milton vowed he would work with all the labour unions involved to make the blow as soft as possible. He also confirmed that the company would continue to seek financial support from the federal government in the wake of the “cataclysmic” events of September 11, but would not confirm how much Air Canada is seeking. He also remained optimistic about traffic volumes returning.

“By eliminating our oldest aircraft and decreasing frequencies, you’ll see less(sic) flights a day but with larger, newer aircraft. Our plan right now with this pullback is that assuming we see a recovery in bookings over time we’ll look to replace the older 767-200s (with new orders. Notwithstanding the retaliation issue there’s no doubt over time, that traffic returns,” said Milton.