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Air traffic controllers have been warned that layoffs are coming as Nav Canada pursues a “complete restructuring” in response to the slump in revenue caused by the COVID-19 pandemic, CBC News learned.
CBC News obtained a confidential memo sent internally to air traffic controllers on Thursday. In it, Ben Girard, Nav Canada’s vice president and chief of operations, told staff that the company experienced a $ 518 million drop in revenue from its budget.
He said he asked the federal government for help, but – unlike other countries – Canada has not yet released an industry-specific bailout package.
“We anticipate that until air traffic returns to higher levels, which it will not until the end of this fiscal year, we will continue to operate in a negative daily cash position and this will be compounded by the financing of the [Canadian Emergency Wage Subsidy] the program went back, “Girard wrote.
Girard did not say in the memo how many air traffic controllers will lose their jobs or which locations will be affected. The memo said it is trying to reduce the number of “IFR controllers”. These controllers are higher on the salary scale and work in area control centers in Gander, NL, Moncton, NB, Montreal, Winnipeg, Toronto, Edmonton, and Vancouver.
Workers are responsible for monitoring large amounts of airspace between airports using radar. Their job is to make sure that the planes keep the right distance from each other.
“I know this is very difficult news to hear. It is also very difficult news to get across,” Girard wrote. “This is a decision that was made at my level based on what needs to be done to ensure the financial viability of Nav Canada.”
Nav Canada manages millions of kilometers of airspace over Canada and provides air navigation services for over three million flights per year. It is funded through service fees paid by air carriers.
The Canadian Air Traffic Control Association said they were very concerned about the reminder.
“It is the view of this union that safety is not a consideration in making good decisions,” President Doug Best and Executive Vice President Scott Loder wrote in a letter to members.
“Safety is the number one priority for Nav Canada and has somehow taken a back seat to cost containment as the number one and only priority.”
‘We are facing years of recession in air traffic’
In November, Canadian air traffic decreased by 54% from the same time period in 2019, according to the note.
“During the summer and fall months, the outlook for the aviation industry has deteriorated significantly and it has become increasingly clear that we are facing years of air traffic recession that is much broader and more far-reaching than all. we initially believed, and it will be much deeper and longer than any recession in the history of the industry, ”Girard wrote.
Nav Canada says it is conducting studies of air traffic control towers at Whitehorse, Regina, Fort McMurray in Alberta, Prince George in BC and Sault Ste. Marie and Windsor in Ontario that “will result in workforce adjustments.” The company is also considering closing a control tower in St. Jean, Que.
The government has “pressed” for help
The company focused on liquidity security and leveraged Canada Emergency Wage Subsidy (CEWS) to pay up to 75 percent of employee wages, it wrote. Girard added that these payments will be reduced and will last until December, but Nav Canada is not sure they can continue to receive that wage support.
“While an extension of the CEWS program was recently announced until June 2021, the eligibility of NAV CANADA is uncertain,” he wrote.
Girard said the federal government has so far failed to find a bailout package for the aviation sector, despite “significant lobbying”.
Last month, the Globe and Mail reported that the federal cabinet is working on a package for the aviation sector that includes low-interest loans.
Since September 22, Girard wrote, the company has cut more than 700 executives and employees, 14% of the workforce. It also let 159 students go at the start of the pandemic, he added, and in November cut even more, “leaving only a few in the system.”
Along with the cuts, seven air traffic control towers have been considered for a downgraded level of service, and another 25 sites that are already flight service stations – which only provide advisory services – could face further cuts.
Nav Canada’s board of directors cut commissions by 20% and executives and managers cut their salaries by up to 10%, Girard wrote.
These cost reductions, as well as access to government support through the wage subsidy program, have saved the company $ 200 million since March 1, he added.
“However, that number still pales when compared to the $ 518 million reduction in revenue over budget,” Girard wrote.
“Despite these cost containment efforts, we are in a situation where we expect our revenues to continue to be well below our costs for several years and continue to call for additional cost containment measures and, indeed, a complete restructuring of our business.
“In an environment where 30% of the costs are associated with” things “and 70% of the costs are associated with” people “, when all possible cuts in” things “have been made, any further cuts will have a direct effect about people “.
Girard added that he hopes the company can bring back some of the laid-off staff once the pandemic is over.
The Canadian Air Traffic Control Association has said it will continue to challenge Nav Canada. The union hopes there will be “enough interest” in the departure incentives for older controllers to offer them a retirement package.
“Nav Canada’s views at this point are in violation of this company’s vision, mission and overall goals,” Best and Loder said in their letter to members.
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