Canada’s largest airline said last week that it plans to cut up to 20,000 people, or 60% of its workforce, given the drop in demand for air travel during the global pandemic. Air Canada has reduced its flight capacity by approximately 90% due to foreign travel bans and orders for home stays. As such, most of its employees are out of work but remain on the payroll through the federal wage subsidy program, which covers up to 75 percent of salary costs.
The Air Canada component of the Canadian Union of Public Employees, which represents the flight attendants of Air Canada and Air Canada Rouge, said it was disappointed that the wage subsidy was not being considered and that the company Aviation cuts thousands of workers to prevent workers from accessing COVID-19 government assistance.
Union said employees must choose between six to 24 months of unpaid voluntary leave, reduced hours without supplement or resignation – voluntary measures that would prevent employees from accessing the Canadian benefit emergency response that offers laid-off workers up to $ 2,000 a month. .
“The government and Air Canada are washing their hands of this devastating situation and the only options left to our members are either to resign, or to be dismissed and to continue (employment insurance)”, Wesley Lesosky, president of the component CUPE Air Canada said in a statement.
“It is shameful and disrespectful to the workers who built this airline, who faced this epidemic on the front line and who were among the first in Canada to get sick with COVID-19 while doing their jobs.”
The cuts are expected to affect 7,000 of the 10,000 flight attendants that CUPE represents, said Lesosky.
He called on the government and Air Canada to work together on better options for workers. Lesosky believes that employees should be eligible for government benefits, including the wage subsidy and the Canadian Emergency Benefit, since government travel restrictions and the global pandemic are responsible for the lack of flights. If workers agree to reduce working hours, they should be eligible for employment insurance benefits, he added.
Earlier this week, the federal government released more details on the Large Employer Emergency Financing Facility, a short-term loan program designed for businesses with annual revenues over $ 300 million and who need at least 60 million dollars in interim funding to deal with the pandemic.
To earn money, companies must agree to protect jobs and give Ottawa a stake in their business through stock warrants. Companies must also limit executive compensation to $ 1 million a year and ban dividends and share buybacks until they pay off their loans.
Air Canada chief executive Calin Rovinescu, who received more than $ 11 million in wages and shares in 2018, gave up 100% of his wages during the pandemic alongside chief financial officer Michael Rousseau. Other senior executives have accepted a 25-50% pay cut.
As travel demand plummeted as Ottawa extended international travel ban until June 30, Air Canada has seen fewer cancellations and improved bookings, Rousseau said at an investor conference earlier this week.
Despite the optimistic tone of the conference, S&P Global Ratings demoted Air Canada and WestJet Airlines Ltd., Canada’s second largest airline, as operators spend cash during the break.
According to Citi Research, a big hurdle in the future will be business travel, which accounts for about 40% of global airline revenues. Business travel is likely to be under pressure in the short and long term, Citi noted this week, as quarantine rules for arriving travelers can prevent executives from flying and accelerated adoption of digital technologies can make remote meetings more palatable.
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