Up To 2,000 Jobs To Be Cut
The bleeding continues for the North
American airline industry. Air Canada plans to cut up to 2,000 jobs
from its ranks by the end of 2008, as the carrier slashes capacity
to cope with the slumping economy and record high fuel costs.
The Canadian Press reports the airline will cut capacity by at
least seven percent this fall. The subsequent jobs cuts will affect
all areas of operations, said Air Canada CEO Montie Brewer
"The loss of jobs is painful in view of our employees' hard work
in bringing the airline back to profitability over the past four
years," Brewer said in a statement. "I regret having to take these
actions but they are necessary to remain competitive going forward.
Air Canada, like most global airlines, needs to adapt its business
and reduce flying that has become unprofitable in the current fuel
"If fuel prices remain at current levels, we can anticipate
further capacity reductions," Brewer added.
Following in the steps of most major US airlines -- including
American, United, Delta, Northwest, and US Airways -- Air Canada
will gradually implement capacity reductions over the next several
months, targeting a 2 percent cut in domestic capacity by Q1 2009.
US transborder capacity will take the biggest hit on a percentage
basis, with a 13 percent drop; and international travel will be
curbed by seven percent, for an overall seven percent cut across
Air Canada's operations.
International routes to be cut include Toronto to Rome non-stop
service following the summer travel season, and elimination of
non-stop service from Vancouver to Osaka, Japan.
Air Canada noted every time the price of oil increases by $1 per
barrel, it costs the carrier an extra $26 million a year. Fuel
costs comprise 30 percent of Air Canada's overall expenses.
Not helping matters are federal and provincial fuel excise
taxes, security fees and airport charges, which Air Canada said
"that are amongst the most expensive in the world today."
With the cuts, Air Canada is predicting a flat year for overall
capacity growth... between one percent and minus one percent, down
from its earlier predictions of as much as a 2.5 percent growth
over 2007 levels.