By Reuters Staff
(Corrects Transport Minister’s last name in last paragraph to Alghabra)
Jan 13 (Reuters) - Air Canada said on Wednesday it will cut first-quarter capacity by an additional 25%, resulting in a workforce reduction of about 1,700 employees, as travel restrictions, lockdowns and new testing requirements to combat the spread of COVID-19 hit bookings.
Carriers have been wrestling with a slump in demand and passenger confusion, following the Jan. 7 introduction of new Canadian rules requiring travelers to test negative for the novel coronavirus before boarding a plane bound for the country.
Privately held WestJet Airlines said last week it would reduce capacity, with schedule cuts that would mean furloughs, layoffs, unpaid leaves or reduced hours for about 1,000 employees.
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MONTREAL/OTTAWA Air Canada said on Wednesday it would cut first-quarter capacity by an additional 25% as measures to combat COVID-19 hit bookings, while two well-placed sources said talks over a federal aid package had stalled.
Air Canada and rival WestJet Airlines – faced with huge slumps in demand – have been negotiating with the Liberal government since November. Progress is very slow amid disagreements over what Ottawa should offer, said the sources.
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