Air Canada is cutting second-quarter capacity by up to 90 percent and is temporarily laying off more than 16,000 employees, the carrier announced.
As of April 1, Air Canada will operate a reduced domestic network and a small number of flights to the United States and other international destinations, according to the carrier. Air Canada also is working with the Canadian government to operate flights to repatriate stranded Canadians abroad and to move cargo, including medical supplies.
The layoffs include 15,200 of its unionized workforce moved to off-duty status and about 1,300 furloughed managers. The job cuts will happen around April 3 and "are intended to be temporary," according to Air Canada.
"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," according to Air Canada president and chief executive Calin Rovinescu. "It will help ensure that Air Canada can manage through this crisis that is affecting airlines everywhere."
Other cost-saving measures have included a companywide cost reduction and deferral of capital spending of about $500 million, suspension of Air Canada's share repurchase program and top executives foregoing some or all of their salaries. Air Canada also is tapping about $1 billion in its credit lines for additional liquidity.