Transportation Industry

Company Watch - Air Canada

AirGuide Business, July 7, 2008

7/7/2008

Air Canada is cutting 2,000 jobs, or 7 percent of its work force. That is on top of its addition of fuel surcharges on fares earlier in the year. Stuart said Jazz has yet to determine which routes will be cut, or frequency reduced, as Air Canada has not finalized its plan. Before the current round of cuts, Jazz was preparing to end service to Hamilton, Ontario, and Comox, British Columbia. There are no plans to park any of the airline's 137 aircraft, she said. Until the end of May, Jazz and Air Canada were partly owned by ACE Aviation, but ACE has sold its remaining interest in Jazz. It still owns 75 percent of Air Canada. 7/4/2008

Air Canada and Jazz flew 4.31 billion combined RPMs in May, up 4.5% year-over-year. Capacity rose 4% to 5.17 billion ASMs, lifting load factor 0.3 point to 83.2%. 6/30/2008

Jazz Air capacity and staff reductions are the latest cost-cutting measures in an industry being buffeted by high costs as oil prices creep closer to USD$150 a barrel, more than double the level of a year ago. Air Canada said on June 17 it will reduce its capacity to US destinations by 13 percent and between Canadian cities by 2 percent in its autumn and winter schedules. 7/4/2008

Jazz Air plans to chop 5 percent of its staff in response to cuts announced last month by its main customer, Air Canada, to cope with surging fuel prices, Jazz said on Thursday. Jazz Air, the regional feeder carrier for Air Canada, said its moves -- which will mean 270 job losses and a 5 percent cut in capacity -- are necessary to match resources with its reduced expectations for revenues. The operator of smaller regional jets and turboprop aircraft has a symbiotic relationship with Air Canada, operating under a capacity purchase agreement with the country's largest airline. Staff cuts will affect all areas of the Halifax, Nova Scotia-based organization, including pilots, flight attendants, customer service agents, maintenance and administrative staff as well as managers, Jazz spokeswoman Manon Stuart said.deeper cuts could be in the offing if Air Canada is forced to squeeze its service and work force more, she said. 7/4/2008

Jazz Air said yesterday that owing to planned fourth-quarter capacity reductions by Air Canada, with which it has a contract to operate regional flights, it will reduce its flying by 5% in the year's final three months and cut 270 employees. Air Canada said last month that it will reduce total system capacity by 7% year-over-year in this year's fourth quarter and the 2009 first quarter and slash its workforce by 2,000. Jazz President and CEO Joseph Randell said those cuts necessitated that the regional follow suit. "These are difficult times for our industry and the decision to reduce our workforce was not reached lightly," he said. "We are in a period of great uncertainty and cannot predict where the price of fuel is going." In order to offset fuel costs, Jazz has frozen all hiring and eliminated "noncritical" staff overtime. 7/4/2008

Editorial eMail: edit@AirGuideOnline.com

For Air Transport & Travel Business Experts contact our Director of Content Aram Gesar eMail: bizintel@AirGuideOnline.com

For Advertising and Marketing: advert@AirGuideOnline.com

For Custom Content: content@AirGuideOnline.com