Air Transat to Cut Fleet by Half; Lay Off Hundreds
From Yahoo! Canada:
Monday September 24 1:09 PM EST
Air Transat Seen Cutting Workforce, Fleet By Charles Grandmont
MONTREAL (Reuters) - Transat A.T. Inc. , which owns Canada's top charter airline Air Transat, is expected to announce on Monday afternoon it is cutting its 24-jet fleet by up to half and laying off hundreds of its 4,600 employees to slash costs, union sources said.
Transat would be the first Canadian airline to announce job cuts since the Sept. 11 attacks on the World Trade Center and Pentagon plunged the world airline industry into crisis.
The company said it was holding several meetings with employees on Monday to unveil a restructuring of its network and workforce ahead of a 3 p.m. (1900 GMT) conference call with media and financial analysts. Union sources said they were bracing for large job cuts.
"We are expecting hundreds of job cuts," a union source, requesting anonymity, told Reuters.
Analysts said they believed Air Transat could cut its fleet of 24 planes by half to respond to its sharply lower flight bookings, which have plunged 50 percent in Canada and 30 percent in Europe since the Sept. 11 attacks, which have left almost 7,000 people dead or missing.
Air Transat had been gearing up for the busy fall and winter holiday season when thousands of Canadians head to sun vacation spots in the southern U.S., Mexico and the Caribbean.
Apart from its charter subsidiary, Transat owns several travel agency franchises, which employ roughly half of its 4,600 workers.
Transat shares have skidded 26 percent since Sept. 11, in line with the rapid decline in other Canadian airline stocks. The stock was down 7 Canadian cents at C$5.50 on the Toronto Stock Exchange on Monday.
and an update:
Monday September 24 3:55 PM EST
Transat AT to cut 1,300 jobs, roll back pay at airline and other operations By DAVID PADDON
TORONTO (CP) - Transat AT is eliminating 1,300 jobs and freezing or cutting the pay of its remaining employees in the face of a sharp fall in business at its charter airline and other operations in the wake of the terrorist attacks in the United States.
Transat (TSE: TRZ), already struggling to recover credibility after one of its planes ran out of fuel during a transatlantic flight in August, said Monday its objective is to "temporarily reduce our activities on the Canadian market and remain prepared to increase them when the situation returns to normal."
The 1,300 layoffs, representing nearly 25 per cent of Montreal-based Transat's workforce, are the first confirmed major cuts in the Canadian airline industry since Sept. 11.
Air Canada is also expected to cut thousands of jobs as it tries to reduce labour costs by $500 million a year.
"This is not the first storm that Transat will weather," Jean-Marc Eustache, president and chief executive, said in a release.
Eustache said the cuts are necessary to deal with decreased demand that has hit the entire travel industry since the hijack attacks on the World Trade Center and the Pentagon.
"Although it is too early to say that the impact will be lasting, it is very real for the time being and we have a responsibility to act, even if it means taking the painful decision of laying off some of our employees."
Before the layoffs, Transat AT employed about 5,500 people in Canada and Europe.
The company, which operates a number of travel-related businesses, including the Air Transat charter airline, said it will cut 800 jobs at the airline, where operations will be reduced by 30 per cent, and up to 500 jobs at other operations.
Transat also plans to freeze the pay of non-union employees, while managers and executives are facing salary cuts of five to 20 per cent for the financial year beginning Nov. 1.
In addition, the company said, "discussions will be held with union officials in the same spirit."
In the United States, airlines and aircraft makers have laid off more than 100,000 people and the U.S. Congress has approved a $15-billion-US aid package for the industry.
On Monday, Air Canada's chief executive demanded the federal government provide levels of aid proportional to what the American government is giving its airlines.
Robert Milton also said Air Canada will cut more jobs and routes to compensate for a 60 per cent drop in revenue in the days following the terrorist attacks.
Canada 3000, the country's second-biggest carrier, is assessing its business before deciding on capacity or route adjustments.
[ 24 September 2001: Message edited by: The Guvnor ]
BrokePilot Not very helpful. Whatever your feelings on the Guv, he provides valuable news to us all (well, most of the time guv!) precisely what this board is for. He has just as much right to be here as you or I do. If you can't make constructive comments, why don't you just leave?
Air Transat's problems started long before this crisis. In fact, rumour has it they were well on their way to bancrutcy a few months ago. They had been slapped with a 250 000 dollar fine for running out of gas midway over the Atlantic, not to mention they are now defending a 50 million dollar suit from the passengers on that flight.
I can almost guarantee that Air Transat has used this as an excuse for their poor record.
Similarly, Air Canada, I expect, will also announce massive cuts soon and use this as an excuse. They were also on their way to losing a half billion dollars this year.
Absolutely no relation to the September 11th attacks.
Where on earth do you get good news nowadays ????? The only one I can think of this morning goes like this : It is 11:15 AM and it is not raining in Paris ! I'd call that a pretty hansome piece of good news.