Wednesday, July 1, 2020

Air Canada suspends service, closes stations and reduces workforce due to COVID-19

Air Canada announced Tuesday that it is indefinitely suspending service on 30 domestic regional routes and closing eight stations at regional airports in Canada.

These structural changes to Air Canada's domestic regional network are being made as a result of continuing weak demand for both business and leisure travel due to COVID-19 and provincial and federal government-imposed travel restrictions and border closures, which are diminishing prospects for a near-to-mid-term recovery.

As the company has previously reported, Air Canada expects the industry's recovery will take a minimum of three years. As a consequence, other changes to its network and schedule, as well as further service suspensions, will be considered over the coming weeks as the airline takes steps to decisively reduce its overall cost structure and cash burn rate.

As a result of COVID-19, Air Canada reported a net loss of $1.05 billion in the first quarter of 2020. The carrier has undertaken a range of structural changes:
  • A workforce reduction of approximately 20,000 employees, representing more than 50 percent of its staff, achieved through layoffs, severances, early retirements and special leaves;
  • The permanent removal of 79 aircraft from its mainline and rouge fleets.
Affected customers will be contacted by Air Canada and offered options, including alternative routing where available.

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