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Air Canada to Cut 5,000 Jobs

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Air Canada to Cut 5,000 Jobs

Old 26th Sep 2001, 20:55
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Arrow Air Canada to Cut 5,000 Jobs

Air Canada To Cut 5,000 Jobs, Ground 84 Jets

By Sean Broderick / AviationNow.com

26-Sep-2001 9:56 AM U.S. EDT

Air Canada, struggling before this month's worldwide airline downturn following the terrorist attacks on the U.S., will cut 5,000 jobs, trim 20% from its system-wide schedule, and ground more than 80 aircraft in response to the sagging demand.

The cuts will come from both the mainline Air Canada and Air Canada Regional, and will include accelerating 4,000 layoffs from the mainline carrier unveiled in August. The latest round of reductions will cut 4,000 more jobs from the big airline and 1,000 from the regional operation.

"It is our hope that with the temporary nature of these job reductions, we will be able to recall laid-off employees when business improves again," said Air Canada CEO Robert Milton. "In the meantime, we will continue to work with the unions and the government to find every possible way to reduce the number of layoffs through various mitigation programs."

Details of which jobs were being cut were not released. Air Canada employs about 45,000 people.

Air Canada management met with union representatives Tuesday to discuss the reductions, and more talks are scheduled later this week.

"Unfortunately, we cannot be certain that even these job and capacity reductions will be sufficient to weather the storm," warns Milton. "We will reassess the need for further capacity and employee reductions as the worldwide airline industry crisis unfolds."

The airline is working to finalize its new schedule, which will include about 80% of the available seat miles flown prior to the attacks. Reductions on U.S.-Canada routes announced just after the Sept. 11 attacks make up part of the 20% capacity cut. Air Canada gets about 50% of its revenues from U.S.-Canada markets.

To cut its capacity, Air Canada is parking two older fleets: its 17 DC-9 and 38 737-200s.

Twenty of the 737s and some of the displaced workers could return to the Air Canada family if its planned low-cost subsidiary gets off the ground.

"It is expected that the launch of the low fare carrier will mitigate job losses at both the mainline and regional carrier, as qualified surplus staff will be hired on a preferential basis by the low-fare carrier," the Air Canada said.

The low-fare airline was to be launched later this year, and it is not clear if the worldwide airline slump will affect those plans.

Air Canada is also speeding up plans to ground 19 Fokker 28s and 10 BAe 146s flying in its regional operation.

The round of cuts are the third for the carrier since December 2000 as it has struggled to integrate Canadian Airlines during a worldwide slump in high-yield business traffic.

Legislation passed after the Air Canada-Canadian union that governs how and when the carrier can cut jobs did not apply to the layoffs announced Wednesday.

"Needless to say, these layoffs are not related to our acquisition of Canadian Airlines but rather are a result of the unforeseen and horrific events of Sept. 11 and their subsequent impact on the industry," Air Canada said. "For Air Canada, as for every airline on the globe, the world changed on Sept. 11."
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