Air Canada will cut its capacity by 25% in the first quarter of the year, resulting in the loss of around 1,700 jobs.
The airline said its capacity in the first three months of 2021 will be about 20% of what it was over the same three months in 2019.
The changes will “better reflect demand” and “reduce cash burn”, Canada‘s largest carrier said.
The airline is one of many to be struggling with the coronavirus pandemic and its effect on the aviation industry.
But its position has been worsened by a slump in demand and confusion over rules introduced on 7 January requiring a negative coronavirus test for travellers before they board a flight to Canada.
Its rival, the privately-owned WestJet, said last week it will also reduce capacity, meaning furlough, layoff, unpaid leave or reduced hours for about 1000 workers.
A spokeswoman for the Canadian government said they were “disappointed” by the airlines’ “decisions to cancel more regional routes”.
“COVID-19 has led to an unprecedented situation in the aviation sector,” said Allison St-Jean, a press aide for the country’s new transport minister, Omar Alghabra.
“We are fully seized with the issue of how hard the air sector has been hit because of COVID-19, and we are committed to providing assistance to Canada’s air sector.”
According to its website, in 2019, Air Canada, together with its Air Canada Express regional partners, carried more than 51 million passengers, offering direct services to nearly 220 destinations on six continents.
The airline’s move follows a similar decision by Irish carrier Ryanair to reduce flights, which it announced along with criticism of the Irish and UK governments’ travel restrictions.
The no-frills carrier said it was to “significantly cut” services from Thursday 21 January which would result in “few, if any, flights being operated to/from Ireland or the UK from the end of Jan”.
Wizz Air also said it would cut services, expecting capacity in January to be at 25% of normal services – down from 35% flown in December.
Rival airlines including British Airways and easyJet are also reviewing their flight schedules.