Canada’s Air North (4N, Whitehorse Int'l) has warned it may have to make further job cuts when the federal government winds down its COVID-19 emergency wage relief programme next year.

In a message on the company website, Air North president Joseph Sparling said the COVID-19 related travel slump had cost the Yukon-based airline CAD17 million Canadian dollars (USD12.7 million) between March and August 2020. During the same period, the airline had received about CAD5.5 million (USD4.12 million) in financial relief through federal and Yukon government relief programmes, most of which was spent on the carrier’s CAD11 million (USD8.23 million) payroll. “It would have been difficult to survive without this aid,” he acknowledged.

Air North was a primary beneficiary of state funding to ensure the continued operation of critical routes to the North, in particular for the delivery of medical samples, supplies and critical frontline staff to Yukon. Amongst others, it received help from the Canada Emergency Wage Subsidy (CEWS) programme, which the federal government last week announced it would extend until “summer next year” as it promises to restore employment in Canada to pre-pandemic levels.

However, Air North says it may be forced to retrench more employees once the subsidies stop. “Last August we employed 375 full time employees. This August we employed 228. Without the wage subsidy, our August workforce would have numbered 196. In the absence of continued subsidy, that is where we will need to be if we can maintain our current flying schedule - and that is a big if,” Sparling said.

He said Air North would have to increase its share of the passenger traffic in order to operate sustainably. “Post-September traffic has declined by around 10%, but there are still three daily flights in the market, two from us and one from our mainline competitor. If the market is only able to support two daily flights this winter, there will be more than 100 Yukon jobs on the line if we are forced to split the traffic,” he warned.

“This is a critical time for us, and while we can still operate sustainably with half of our current flights and less than half of our current employees, this would be a worst-case scenario and one which is completely avoidable if we can encourage just a few more passengers to purchase their travel locally every day.”

Sparling said Air North had almost halved its flight schedule from 30 to 18 a week, 13 of these on its gateway route to Vancouver Int'l and five on its regional route to Dawson City and Old Crow. It had slashed its overheads by 33% to stem losses, with more reductions to come.

From its base at Whitehorse Int'l, the Canadian carrier's fleet currently includes four BAe 748s, three ATR42-300s (including two ATR42-300(QC)s), one B737-200Adv., one B737-400, and four B737-500s, Canada's civil aviation register shows.