Air Canada layoffs 'devastating' but not unexpected because of COVID-19, says expert
Major airlines will struggle during a summer where most travel is off the table, says Frederic Dimanche
The news that Air Canada will lay off 20,000 workers as a result of the COVID-19 pandemic was "devastating to see" but not unexpected, according to travel expert Frederic Dimanche.
"We see those impacts coming one after another, airline after another, all across the world. So on one hand, you know, we are very sad. On the other hand, we're not really surprised," Dimanche, director of the Ted Rogers School of Hospitality and Tourism Management at Ryerson University, told Checkup.
CBC News obtained an internal memo that said the country's largest airline will cut "effectively 50 to 60 per cent" of its 38,000 employees effective June 7.
Prime Minister Justin Trudeau on Saturday pledged to work with airlines and the travel sector to help cope with the pandemic.
But he didn't commit to any specific strategies, such as a bailout or shared equity arrangement.
"We will have conversations with Air Canada, as we will with airlines across the sector to try and see how the best way to get through this particular pandemic is," Trudeau told reporters.
Dimanche thinks that whatever action may be chosen, the federal government may be forced to step in if the handful of national airlines find themselves staring bankruptcy in the face by summer's end.
"An airline is essential to any country.... We don't want to see Air Canada die. There is no way, I don't think, the government will let it happen," he told CBC's Rosemary Barton.
Thinking differently about travel
Thanks to physical distancing guidelines and outright travel bans at many international borders, many people's summer vacation plans have been scuttled by the coronavirus.
As a result, Dimanche said, airlines now face a drastic decline during what is normally the busiest time of the year.
"If they can't get through the summer in a good way, it's going to be very difficult for them. So we're afraid that many airlines are going to be at the risk of declaring bankruptcy at the end of the summer," he said.
I think they will have to rediscover their own country. This is in fact, good for Canadian tourism.- Frederic Dimanche
Dimanche echoed the words of Alexandre de Juniac, director-general of the Montreal-based International Air Transport Association, that it will likely take around three years for the air travel industry to recover to pre-pandemic levels.
But he pointed out that many people will remain hesitant to travel even after travel restrictions are eventually lifted.
Many people may decide that leaving home, going to a hub of international travel like a large airport, and enduring what will likely be an even more miserable and expensive flying experience than before is simply not worth the time, money and risk, he said.
"Are we going to travel for just a day or two, as we used to? Probably not. Are we going to travel for that nonessential trip? Probably not either," he said.
If there's one silver lining, Canadians used to flying to a Caribbean resort or other international location for the summer might go sightseeing domestically instead.
He explained that while some provinces may be slowly easing intra-Canadian travel restrictions, international and intercontinental travel bans — which also happen to be the biggest cash cows for large airlines — will likely be the last to fall.
"I think they will have to rediscover their own country. This is in fact, good for Canadian tourism," Dimanche said.
Written by Jonathan Ore. Interview produced by Levi Garber.
