Air Canada to Reduce Workforce by 3,600

Air Canada is accelerating its transformation into what it says will be a more efficient, lower cost airline by eliminating 3,600 jobs.

The airline will reduce its non-unionized workforce by approximately twenty  per cent across all ranks including senior and executive management to be completed by the end of 2003 and will also reduce its unionized workforce by approximately ten per cent.

"The outbreak of war confirms our pressing need to achieve our target of $650 million in labour cost savings in addition to the job reductions announced today. I regret the impact of this decision on the many loyal employees affected but we need to accelerate our transformation into a leaner, lower cost carrier," said Robert Milton, President and Chief Executive Officer. "We will take decisive action as required in the days ahead to deal with any increased volatility in the market."

Air Canada has been progressively adjusting capacity over the past several weeks in view of reduced demand due principally to the threat of war in Iraq.

Capacity for the balance of March has been reduced by eight per cent and by 15 per cent for each of April and May as compared to last year with further capacity adjustments to be instituted as developments warrant. The capacity reductions are equivalent to the removal of 18 aircraft from service in March  and 35 aircraft in April and May.

As a result of the war in Iraq and the existence of a "force majeure" situation, Air Canada has said it is continually assessing the evolving geopolitical events and their impact on traffic demand as a basis for further capacity adjustments.