Air Canada’s chief executive officer, Calin Rovinescu, has warned employees in an internal memo that the airline needs to change its business model or risk following American Airlines into bankruptcy.
Rovinescu said that the airline’s business model is broken and its employees must be “open to change” for the airline to stay competitive.
He described American’s entry in Chapter 11 protection as “sobering news” and that American’s struggles compare with those at Air Canada. He says: “While we have made good progress in such areas as fleet renewal, improvements to our liquidity and balance sheet, and some areas of cost transformation, we must still achieve more on culture change and we are still not as competitive on costs as we need to be.”
The airline remains in talks with its pilots over a new contract and a dispute over the launch of a new discount airline. The airline has also been plagued by strikes, with Air Canada sales and service agents staging a three-day strike in June and being forced to abide by a federal arbitrator ruling on a labour contract on the Canadian Union of Public of Employees, which represents Air Canada flight attendants.