Air Canada to Reduce Workforce

Air Canada said today it is
accelerating its transformation into a more efficient, lower cost airline by
eliminating 3,600 jobs.
The airline will reduce its non-unionized workforce by approximately
twenty per cent across all ranks including senior and executive management to
be completed by the end of 2003 and will also reduce its unionized workforce
by approximately ten per cent.
“The outbreak of war confirms our pressing need to achieve our target of
$650 million in labour cost savings in addition to the job reductions
announced today. I regret the impact of this decision on the many loyal
employees affected but we need to accelerate our transformation into a leaner,
lower cost carrier,” said Robert Milton, President and Chief Executive
Officer. “As our record indicates we have been consistently ahead of the pack
in adjusting to changing circumstances and we will take decisive action as
required in the days ahead to deal with any increased volatility in the
Air Canada has been progressively adjusting capacity over the past
several weeks in view of reduced demand due principally to the threat of war
in Iraq. Capacity for the balance of March has been reduced by eight per cent
and by 15 per cent for each of April and May as compared to last year with
further capacity adjustments to be instituted as developments warrant. The
capacity reductions are equivalent to the removal of 18 aircraft from service
in March and 35 aircraft in April and May.
As a result of the war in Iraq and the existence of a “force majeure”
situation, Air Canada will assess evolving geopolitical events and their
impact on traffic demand as a basis for further capacity adjustments. Forward
bookings for the second quarter have been adversely impacted.
Discussions on the implementation of the reduction of unionized personnel
will be undertaken with the unions in the coming days.
Air Canada will continue monitoring the situation closely and will
communicate significant developments relating to operations and corporate
initiatives during the conflict as necessary.