Air Canada has announced plans to cut planned first quarter capacity by a further 25 per cent, as a result of “new pre-departure testing requirements, provincial lockdowns and travel restrictions”.

It means the carrier will now operate at around 20 per cent capacity in the first quarter, compared to 2019 levels.

The airline is also set to further reduce its workforce by around 1,700 employees, in addition to over 200 impacted staff at its Express carriers.

“Since the implementation by the Federal and Provincial Governments of these increased travel restrictions and other measures, in addition to the existing quarantine requirements, we have seen an immediate impact to our close-in bookings and have made the difficult but necessary decision to further adjust our schedule and rationalize our transborder, Caribbean and domestic routes to better reflect expected demand and to reduce cash burn,” said Lucie Guillemette, executive vice president and chief commercial officer at Air Canada.

“We regret the impact these difficult decisions will have on our employees who have worked very hard during the pandemic looking after our customers, as well as on the affected communities.

“While this is not the news we were hoping to announce this early into the year, we are nonetheless encouraged that Health Canada has already approved two vaccines and that the Government of Canada expects the vast majority of eligible Canadians to be vaccinated by September.

“We look forward to seeing our business start to return to normal and to bringing back some of our more than 20,000 employees currently on furlough and layoff.”

Air Canada said that all affected customers would be contacted and offered options including “refunds for eligible customers and alternative routings where available”.

The carrier added that it would “continue to evaluate and adjust its route network as required in response to the trajectory of the pandemic, government-imposed travel restrictions and quarantines, and to market and regulatory conditions”.