Air Canada to rehire 16,500 laid-off workers with help of federal government's wage subsidy
Air Canada plans to rehire thousands of workers the airline recently laid off because of COVID-19, after negotiations with the federal government to confirm that the airline would qualify for a wage subsidy program.
As first reported by The Toronto Star, the airline announced that more than 16,000 of its recently laid-off workers will be put back on the payroll.
The rehiring will be retroactive to March 15 and the wage subsidy program is expected to last until at least June 6.
Earlier this month, Ottawa expanded its wage subsidy program so that it could cover more companies, including larger ones. Originally it was targeted only at small and medium-sized businesses, but it has since been extended to cover just about any Canadian company that has seen its revenues plunge by 30 per cent because of COVID-19.
Canada's airline industry has seen a catastrophic reduction in demand due to lockdowns to control the spread of the coronavirus that causes COVID-19. Air Canada says its seat capacity is down by almost 90 per cent since the crisis began.
Unions have signed off on the plan
"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," Air Canada's president and CEO Calin Rovinescu said in a news release Wednesday morning.
"We are trying to keep as many of our employees as possible during the crisis and this measure will certainly help."
Once operations return to normal, Rovinescu said, the company will return "as many employees as possible to active status."
The airline also said that all of the unions that represent the company's workers have signed off on the plan. Air Canada previously announced that it will temporarily stop buying back its own shares as a way to conserve cash during the current crisis, and the company's managers will also be getting reduced paycheques.
Rovinescu and the company's chief financial officer, Michael Rousseau, have agreed to defer their salaries while other senior executives will forgo between 25 and 50 per cent of theirs.
Members of Air Canada's board have agreed to a 25 per cent reduction, and all other Air Canada managers will have their salaries reduced 10 per cent for the second quarter.
CBC News has reached out to Air Canada's Calgary-based rival WestJet, which cut its workforce by roughly half last month, to see whether or not they have any similar discussions with Ottawa about the wage subsidy program. That request was not immediately returned.
