Air Canada to Layoff 16,500 Employees; Reduce Q2 Capacity by 85-90%

Air Canada is to reduce capacity for Q2 2020 by 85%-90% compared to last year, and will place 15,200 members of its unionized workforce on Off Duty Status and furlough about 1,300 managers.

The workplace reductions will be effective on or about 3 April 2020 and are intended to be temporary.

"The unpredictable extent and duration of the COVID19 pandemic requires a significant overall response," said Calin Rovinescu, President and Chief Executive. "To furlough such a large proportion of our employees is an extremely painful decision but one we are required to take given our dramatically smaller operations for the next while. It will help ensure that Air Canada can manage through this crisis that is affecting airlines everywhere. We believe that the temporary nature of these reductions, many achieved through voluntary programs, combined with other mitigation measures, will position us to restore regular operations as soon as the situation improves ... I understand and regret the impact this will have upon our employees and their families. I thank all of our employees, as well as union leaders, for working with us constructively to quickly implement these measures."

In addition to the temporary workforce reductions, other measures implemented by Air Canada include:

- A company-wide cost reduction and capital deferral program, targeting at least $500 million.

- Drawing down operating lines of credit of approximately $1 billion, to provide additional liquidity.

- Mr. Rovinescu, Air Canada's President & Chief Executive Officer, and Michael Rousseau, Air Canada's Deputy Chief Executive and Chief Financial Officer, have agreed to forgo 100% of their salary. Senior Executives will forgo between 25% - 50% of their salary while members of Air Canada's Board of Directors have agreed to a 25% reduction. All other Air Canada managers will have their salaries reduced 10% for the entire Second Quarter.

Air Canada intends to continue to serve a small number of international and U.S. trans-border destinations from select Canadian cities after 1 April 2020 in addition to a reduced network in Canada.

The airline says it will also continue to operate special international flights in collaboration with the Government of Canada to repatriate Canadians abroad as well as cargo-only flights to ensure the continued movement of essential goods, including medical supplies.

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