AMERICA: Air Canada to cut capacity & 2,000 workers

Air Canada, following the path of several US counterparts, said yesterday it will cut total system capacity by 7 percent year-on-year in this year’s fourth quarter and the 2009 first quarter and slash its work force by 2,000. “I regret having to take these actions but they are necessary to remain competitive going forward,” president […]


Air Canada, following the path of several US counterparts, said yesterday it will cut total system capacity by 7 percent year-on-year in this year’s fourth quarter and the 2009 first quarter and slash its work force by 2,000.

“I regret having to take these actions but they are necessary to remain competitive going forward,” president and CEO Montie Brewer said. “Air Canada, like most global airlines, needs to adapt its business and reduce flying that has become unprofitable in the current fuel environment. If fuel prices remain at current levels, we can anticipate further capacity reductions.”

Every C$1 (US$0.97) increase in the per-barrel price of oil adds an estimated C$26 million to AC’s annual fuel expense, the airline said. “Fuel is the carrier’s single largest expense item, accounting for more than 30 per cent of total operating expenses, and at current price levels will cost the airline close to C$1 billion more in 2008 than in 2007,” it said.