meltedmarshmellow

AC to lay off half of workforce.

https://montreal.ctvnews.ca/mobile/a...memo-1.4941709


Not sure why they didn't do this before using all of the CEWS tax money?

codfather

This is really bizarre...

Given that the wage subsidy is now in place until the end of August, I see no reason for AC to do this. Really unfair to the employees.

meltedmarshmellow

They want a bailout despite having a solid balance sheet so this is Calin's way of begging for money by making his people suffer and getting Canadians on his side.

First he uses our tax money, then he uses us for his political gain. Ridiculous

mileageking

In a union memo, AC asks FAs to reduce hours, take leave or resign.

This is after about 5 weeks ago that AC announced it would rehire 16,500 laid off employees through goverment subsidy program which covers 75% of workers wages up-to $847/week.

Earlier today Ottawa extended wage subsidy program through end of August.

CBC article on AC: https://www.cbc.ca/news/business/air...ants-1.5572596

Global News article on AC: https://globalnews.ca/news/6950933/a...es-retirement/

robsaw

Paying 25% of salary when flight capacity has been reduced by 95% is still not financially viable.

mileageking

But shouldn't that lead to conversations with union to negotiate wage reductions vs laying off half of workforce (approx. 20,000)?

Keep in mind federal gov. budgeted $73 billion towards wage subsidy program from Mar 15 to Jun 7. So far government has spent less than $4 billion on this program. How much wage subsidy did AC leverage?

canadiancow

Is it 25%?

If I make $2000/week, the government will provide $847/week, and the employer still needs to pay the other $1153, right?

Or do I completely misunderstand how much this costs the employer?

YVRYEGYVR

I assume in this action AC isn't responsible for medical coverage and other benefits for employees and their families, which is a huge load off.
Sign of the times, and AC I think being realistic about future of air travel for next 1-3yrs.

Any news of cuts at C level as well?

meltedmarshmellow

Salaries were cut at the C suite level. At the director even i believe the same happened.

24left

@YVRYEGYVR

As per the Financial Post - March 30 2020

https://business.financialpost.com/t...uring-covid-19

QUOTE:

"Rovinescu and chief financial officer Michael Rousseau will forgo 100 per cent of their salaries, while other senior executives will take a 25 to 50 per cent pay cut. Board members agreed to a 25 per cent pay cut. Other managers’ salaries will be reduced by 10 per cent."

EdmFlyBoi

The government will pay up to $847 per week per employee. The remaining portion is the responsibility of the employer so in actual fact it is only 75% for employees that make up to $1130 per week. For employees that make more the percentage top up is less. The method of calculating the subsidy is on the CRA website and it is done through the business account a company has with CRA. The other option available is the recently announced LEEFF which will provide bridge funding to large companies.

Despite all of this it is pretty clear AC needs to get smaller. As mentioned above, when they are doing very little flying, maintaining the entire work force would be a tremendous challenge. There is some indication that they are going to try and use voluntary work reduction and early retirement to get to a smaller workforce but it is hard to see how, with potentially over 100 aircraft retired (when you account for the A320 retirements), AC would maintain their present workforce. It is a terrible time for aviation.

Smiley90

AFAIK there's no government mandate that the company HAS TO provide the other money. Just "make their best effort to".

Paying 0% salary is as financially viable as laying everyone off, arguably.

TheCanuckian

[Deleted]

24left

QUOTE:

"In the memo, Landry said bookings are down to just five per cent of what they were last year and is losing as much as $22 million per day. He added that the company's hopes are to increase capacity to 25 per cent at some point later this year should travel restrictions be eased.

"It is almost surreal to think that only a few short months ago we were a team of nearly 38,000 who proudly carried an average of more than 141,000 people a day on 252 aircraft to 217 destinations around the world," he said. "Sadly, today the hard truth is that by every indicator we have available to us, we believe that we will be materially smaller for at least three years."

EdmFlyBoi

There is if the employee has an employment contract that stipulates the wages to be paid. I don't believe a company can unilaterally reduce an employee's salary without renegotiation (although I am far from a labour lawyer). The other aspect of this is AC is unionised and the contracts are collectively bargained. I doubt the unions would go for a unilateral reduction in salaries without negotiation. Workforce reduction or layoffs are also collectively bargained so AC's ability to proceed with this plan would, I think, have to have some input from the unions.