Air Canada announced Thursday that it will be paring its workforce by as many as 3600 workers, as it morphs into a low-cost carrier. By the end of the year, the airline indicated, one of five of its non-union workforce will be gone, including all ranks of management. Union workers will see about one in ten receive the same treatment.

Robert Milton, president and CEO of Air Canada, said Thursday, "The outbreak of war confirms our pressing need to achieve our target of $650 million in labor 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. 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 market."

Air Canada will also look for cost-reduction concessions from the workers who remain. Demand for airline travel, hence airline labor, is down; price must follow. Air Canada is reducing its capacity by 8% by the end of this month; cuts in capacity (compared with last year) to reduce capacity 15% are scheduled for both April and May.

FMI: www.aircanada.ca