Staffing reductions of Canadian North will be extended by six months until February 2021 due to the Covid-related downturn, the airline stated.
The Covid-19 pandemic has significantly impacted the operations of airlines through reduced demand for passenger flights and travel restrictions.
A company memo sent to Canadian North employees on July 13 stated the airline had previously anticipated that it could send employees back to work on Aug. 1 but the reduced staffing levels will probably be extended until Feb. 28, 2021.
While spokesperson Kelly Lewis didn’t confirm the precise extension date in response to a subsequent inquiry from NNSL Media, he said recovery is not expected to occur before February 2021, “so we need to extend the current furlough for our cabin crew members and some of our other employees.”
The carrier intends to look for opportunities to call employees back to work sooner, depending on business activity, he added.
The memo also stated that benefits such as dental, health and life insurance can normally be extended to a maximum of 120 days for employees on voluntary layoff, but in these circumstances, cabin personnel on voluntary layoff or who are currently working can apply for benefits extensions until Feb. 28.
Lewis spoke only generally about how the extended furlough might affect employees’ health, dental and other benefits, saying that the company would continue “to work with our union and labour partners to set out the terms and conditions of our layoff arrangements, with that information communicated to individual employees who are affected.
“We are unable to comment on number of employees affected, but any reductions we have made have been done with careful consideration of our current demand and the need to be immediately ready to add back flights and capacity when demand increases.
“Any government funding that is available to us and to our employees will continue to be accessed. This includes both CEWS (Canada Emergency Wage Subsidy) and the CERB (Canada Emergency Response Benefit),” he said. “We will continue to be committed to maintaining our employment levels in the North, including for our Inuit and beneficiary team members.”
Federal assistance and company reductions
The airline was among five carriers operating in the NWT that received $8.7 million in federal assistance in May. The funds were administered through the GNWT to help the airlines cope with the fallout of the pandemic.
Canadian North received $5.3 million.
“We are taking all steps to remain sustainable by reducing costs where possible, including the difficult decision to furlough employees,” Lewis said. “These efforts have helped, but fall short of what we need to stay sustainable. We are hopeful that more assistance is forthcoming from government stakeholders, in recognition that safe and reliable air service is crucial to all Northerners.”
Even though flight traffic for Northern airlines hasn’t returned to pre-Covid levels, months after the pandemic began it isn’t yet clear if Transport Canada will be providing more assistance.
“We continue to be in communication with the territorial governments and Northern air operators and are following the situation in the hard-hit aviation sector very closely, especially as traffic volumes remain very low,” said Transport Canada spokesperson Sean Best. “Any additional measures relating to financial assistance would be announced in due course.”
Air Tindi finds itself in a similar situation to Canadian North.
The Yellowknife-based airline received $1,565,000 for its share of the federal assistance in May, which helped it increase its schedules to 40 per cent of normal, said president Chris Reynolds.
Increased passenger volumes allowed Air Tindi to ramp up its schedules to 75 per cent of normal in June, but the carrier still faces a tough situation.
“With the closed border, the impact to the other parts of our business such as tourism, exploration and mining support outweigh our scheduled services revenue and we have not been able to recall many of the 85 employees who were displaced,” said Reynolds.
He hopes that Ottawa will provide more financial aid to the industry, without which even tougher times could be ahead.
“No further relief at all would be terrible for the entire industry. It would likely mean business failures for large and small operators,” Reynolds predicted. “In particular, it would be devastating for companies that are built on the tourism and mineral sectors. The critical Northern supply chain would certainly be jeopardized.”