Air Canada Re-Hiring 16,500 Workers; Transat Hopes It Can Do the Same

Air Canada is re-hiring workers who were recently let go because of COVID-19, while Transat says it hopes it can do the same thing.

In an email to TravelPulse Canada Wednesday afternoon, Air Transat's Christophe Hennebelle said that Transat "hopes to be able to use it to recall all of its employees and avoid other furloughs."

Trending Now

Coronavirus Outbreak

Most of the World Is Open for Travel: Here are the Countries...

Cruise Lines Reinstate Mask Mandates For Australia Voyages

Japan Lifts COVID Testing Requirements for Vaccinated Travelers

The Most Popular Destinations With No COVID-19 Travel...

Popular Tourist Destinations That Still Have COVID-19 Travel...

"We are presently studying available information and are impatiently awaiting details of the draft legislation, which has not yet been tabled, to confirm that we can actually recall those of our 4,000 furloughed employees who would wish us to do so," Hennebelle said. "As Transat has suspended its entire operations, we will not be in a position to provide work to most of the employees who would benefit from the CEWS, nor to top up the compensation granted in the program."

We have already contacted our unions to discuss with them the conditions considered for a possible recall of our furloughed employees."

WestJet officials told TravelPulse Canada today that they're "continuing to evaluate the wage subsidy program as the government finalizes the details of the program prior to the passing of the legislation into law.

"WestJet’s top priority is the well-being of our employees and the continued viability of our airline," a spokeswoman said.

A spokesman for Porter said they also are assessing the Canada Emergency Wage Subsidy (CEWS).

"If Porter is eligible for CEWS and there is a benefit for team members to participate, our intention is to take advantage of the program," a spokesman said in an email. "Active discussions are taking place with the government to finalize details and understand outstanding questions."

Air Canada kicked off the good news on Wednesday morning with the following release:

On March 30, 2020, as part of an overall cost reduction program, Air Canada announced that its workforce in Canada will be temporarily reduced by approximately 50 per cent, or 16,500 jobs, as a result of the COVID-19 crisis and the imposition of global travel restrictions.

On April 1, 2020, the Government of Canada announced the Canada Emergency Wage Subsidy (CEWS) in order to help employers keep and/or return Canadian-based employees to payrolls for the Program Term of March 15, 2020 to June 6, 2020 in response to challenges posed by COVID-19. Details of the CEWS are still outstanding, but are intended to generally reimburse employers suffering revenue declines exceeding 30 per cent, which is the case for Air Canada. As a result of the crisis, Air Canada has abruptly reduced its seat capacity by 85 to 90 per cent and is incurring significant revenue losses. Any near-term recovery is reliant on the lifting of domestic and international travel restrictions and return of passenger traffic.

Following an analysis of publicly available information on the CEWS, discussions with Department of Finance officials on certain questions of interpretation, and subject to its adoption into law substantially as announced, Air Canada intends to adopt the CEWS for the benefit of its 36,000 Canadian-based employee workforce. Air Canada's intention to adopt the CEWS has also received the support of all of its Canadian-based unions: ACPA, CALDA, CUPE, IAMAW and Unifor.

As Air Canada (including subsidiaries Air Canada Rouge and Air Canada Vacations) has suffered a drop in consolidated revenues of more than 30 per cent and expects to continue to do so for the Program Term, it will apply for the CEWS retroactively to March 15, 2020 and retain or return affected employees to its payroll for the Program Term.

In addition to the temporary workforce reductions, other measures implemented by Air Canada include:

- A company-wide cost reduction and capital deferral program, now estimated to be at least $750 million for the year, increased from the previous target of $500 million.

- Drawing down operating lines of credit of approximately $1 billion, to provide additional liquidity.

- Calin Rovinescu, Air Canada's President and Chief Executive Officer, and Michael Rousseau, Air Canada's Deputy Chief Executive and Chief Financial Officer, have agreed to forgo 100 per cent of their salary. Senior Executives will forgo between 25 per cent to 50 per cent of their salary while members of Air Canada's Board of Directors have agreed to a 25 per cent reduction. All other Air Canada managers will have their salaries reduced 10 per cent for the entire second quarter.

- Air Canada suspended its share repurchase program in early March 2020.

"The Canada Emergency Wage Subsidy is an extremely important program to help employees and employers during this time of crisis, and as one of Canada's largest employers most affected by COVID-19, we want to acknowledge the leadership of the Government of Canada in introducing it," said Calin Rovinescu, President and Chief Executive Officer at Air Canada.

"While our seat capacity and operations have decreased by more than 90 per cent overnight, we are trying to keep as many of our employees as possible during the crisis and this measure will certainly help. Depending on wage levels, many furloughed employees will get a somewhat higher amount under CEWS than they would otherwise receive from Employment Insurance payments plus they will maintain their health insurance and other benefits and stay more connected to our company during the Program Period. Once the crisis passes and passenger demand increases, we look forward to returning as many employees as possible to active status as we resume normal operations," concluded Mr. Rovinescu.

An Air Canada spokesperson told TravelPulse Canada that furloughed employees will get returned to payroll but will not be brought back to active duty status (i.e. come back to work) as there is no work for them given we have reduced our schedule by approximately 90 per cent.

"By being brought back to payroll, they will get full benefits and stay connected to the company," he said.

Unifor, one of the AIr Canada unions, said it welcomes the news.

"Canada's airline industry has been resilient in the face of past economic downturns and health crises in the past. The same is not always true for airline workers who often bear hardship, loss of income, and deteriorating working conditions during the recovery process," said Jerry Dias, Unifor National President. "This time must be different. We have to show airline workers that they are valued. Air Canada is taking a big step toward recognizing the contributions of hardworking employees with today's announcement."