Air Canada Cuts Staff, and More Flights

Tuesday, June 17, 2008 11:58 AM

Prince George, B.C. - Air Canada has announced it is laying off as many as 2,000 employees as it plans to cut service by 7% this fall. It is not yet known how many, if any, staff and further flight cuts will take place at the Prince George Airport.

The airline says the cuts are a direct result of the rising cost of fuel.

Air Canada Jazz recently cancelled it’s Prince George to Calgary daily flight, citing high fuel costs, but within hours of announcing the cut, the airline announced a fuel surcharge.

"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," said Montie Brewer, President and Chief Executive Officer. "I regret having to take these actions but they are necessary to remain competitive going forward.”

He also warns that if fuel prices remain at current levels there will be further cuts.

According to Brewer, every $1 increase in the price of oil per barrel adds an estimated $26 million to Air Canada's annual fuel expense.

The airline says current fuel prices mean it costs on average, $230 in fuel to carry one passenger on a round trip flight, that is up from $146 a year ago and $110 in 2004.

Including the benefit of fuel hedging, at current fuel prices and capacity levels, Air Canada would spend an average of $230 in fuel costs alone to carry one passenger on a round trip journey, which is up from an average of $146 in 2007, and $110 in 2004.

The revised fall and winter schedule, as well as adjustments to the fleet, will be made available at a later date.

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Posted on Tuesday, June 17, 2008 11:58 AM in News by 250 News

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Comments

Posted by: s8fsj on June 17 2008 12:23 PM

Pretty sad everyone has to go into survival mode now.

Posted by: beesknees on June 17 2008 1:25 PM

When's the next shoe going to drop, Westjet? How's this fuel business affecting your bottom line?

Looks like I might have to dust off ye olde Gypsy Moth, if I'm looking to fly into the wild blue yonder, heh? It runs on castor oil, so I'm not too concerned about fuel prices or shortages.

Posted by: Death to Socialism on June 17 2008 1:36 PM

Fuel cost is obviously a factor but there has always been something fundimentally flawwed about the way Air Kanadistan does things.

Posted by: tinyapplecork on June 17 2008 10:06 PM

Hmm... seems like a handy excuse to use fuel costs as an excuse to lay off workers. A 7% cut to service hey? An increase to fuel surcharges...I think the company has serious management issues. Not only that but word on the street is the company is failing at meeting the demands of consumers. An example is the recent findings and push by IPG to negotiate with this company. How can a business think it will remain operational if it ignores this aspect? Odd business plan....but guess it is working for them...they are driving themselves to bankruptcy, imo. Foolish.

Posted by: HappyGoLucky on June 18 2008 10:44 PM

I sure hope this does not mean less flights to Vancouver... I remember the last suffling they did wiped out flights across Canada to certain smaller cities so people had to go by Greyhound as the smaller charters were too expensive.