Air Canada to apply for Canada’s wage subsidy program

By Skies Magazine | April 8, 2020

Air Canada said it plans to apply for the Canada Emergency Wage Subsidy (CEWS) in order to retain or return employees affected by COVID-19 layoffs to its payroll for the program term.

On March 30, the Canadian carrier laid off 16,500 employees as a response to the financial strain onset by the COVID-19 pandemic.

The company said in a press release that after speaking with officials at Canada’s Department of Finance, it will apply for the CEWS, which is intended to reimburse employers who have suffered revenue loss of 30 per cent or more due to the current crisis. The Canadian carrier said in the statement that its seen an abrupt reduction in seat capacity of close to 90 per cent, and that it is “incurring significant revenue losses.”

The retainment process will be retroactive to March 15 and employees are expected to stay on the payroll until at least June 6, when the CEWS is currently scheduled to finish — though that could be extended by the federal government.

“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,” said Calin Rovinescu, president and chief executive officer of Air Canada in the statement. “We are trying to keep as many of our employees as possible during the crisis and this measure will certainly help.”

Other measures the airline has taken to cut costs amid the pandemic include the suspension of buying back its own shares, as well as a 10 per cent salary reduction for all Air Canada managers.

Rovinescu himself, along with Air Canada’s deputy chief executive and chief financial officer, Michael Rousseau, have taken a 100 per cent pay cut for the time being, while senior executives and members of its board of directors have agreed to cuts between 25 to 50 per cent of their salaries.

“Once the crisis passes and passenger demand increases, we look forward to returning as many employees as possible to active status as we resume normal operations,” concluded Rovinescu.