Air Canada Announces Cuts, Fleet Changes

Like many major US airlines, Canada's flagship carrier is in deep financial trouble. But there may be light at the end of the tunnel. Saturday, Air Canada's regional subsidiary reached a tentative agreement with its unions that the airline hopes will save $43 million (C$59 million). The agreement will also mean thousands of workers will lose their jobs.

"This includes no guarantees related to fleet size or job security," said Joseph Randell, head of the regional unit Air Canada Jazz, in a statement to reporters. Air Canada Jazz employees almost 4,000 workers.

Air Canada is the 11th biggest carrier in the world. Overall, it's looking to cut $550 million (C$770 million), hoping to stem the tidal wave of red ink that's costing the carrier approximately almost $3 million a day. That means more than 25% of the workforce will have to go.

The Canadian airline and its subsidiaries hope to modernize their fleets and cut operational expenses as well, by purchasing 25-30 RJs, which would each seat up to 70 passengers. Right now, Air Canada Jazz flies more than 75 turboprop aircraft and approximately 20 regional jets, all able to carry up to 50 passengers per flight.

Air Canada Jazz pilots - about 1500 of them - are scheduled to vote on the concessions next week.

FMI: www.aircanada.ca