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Canada’s Trudeau to look at possible further aid for airlines, after Air Canada layoffs

Canada's Trudeau to look at possible further aid for airlines, after Air Canada layoffs 1

WINNIPEG, Manitoba (Reuters) – Canadian Prime Minister Justin Trudeau said on Saturday he would look at possible ways to help airlines further, but laid out no new measures after the country’s biggest airline announced mass layoffs due to the coronavirus pandemic.

FILE PHOTO – Air Canada signage is pictured at Vancouver’s international airport in Richmond, British Columbia, Canada, February 5, 2019. REUTERS/Ben Nelms

Air Canada said on Friday it would cut its workforce by up to 60% as the airline tries to save cash amid the COVID-19 pandemic and adjust to a lower level of traffic.

“This pandemic has hit extremely hard on travel industries and on the airlines particularly,” Trudeau said in a briefing in Ottawa. “That’s why we’re going to keep working with airlines, including Air Canada, to see how we can help even more.”

Canada has already put in place a wage subsidy to try to keep more Canadian workers on payrolls, and recently announced loans for large employers.

Trudeau sidestepped questions about whether his government may take an equity stake in Air Canada to help it survive, and whether its layoffs suggest the wage subsidy is not working.

Restoring demand for flights is likely to take years, John Gradek, lecturer at McGill University’s Global Aviation Leadership Program, told CBC News.

“My interpretation is that Air Canada is playing hardball with the government, indicating that … the industry is going to need billions.”

Asked why Air Canada did not use the government’s wage subsidy instead of issuing layoffs, a representative of the airline repeated a statement that normal traffic levels “will not be returning anytime soon.”

Canada’s coronavirus death toll rose 1.7% to 5,595 from the previous day, reflecting a declining mortality rate. Total cases rose to nearly 75,000.

Trudeau also said his government had approved the first Canadian clinical trials of a potential COVID-19 vaccine, at Dalhousie University’s Canadian Center for Vaccinology in Nova Scotia.

The candidate vaccine was developed by Chinese pharmaceutical company CanSino Biologics, two Canadian government spokesmen said.

Canada’s National Research Council on Tuesday said it was collaborating with CanSino to “pave the way” for future trials in Canada.

The council will work with manufacturers so that the vaccine can be produced in Canada if the trials are successful, Trudeau said.

Reporting by Rod Nickel in Winnipeg, Manitoba; additional reporting by Allison Martell in Toronto; Editing by Diane Craft and Matthew Lewis

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