CANADIAN AIRLINES has launched a fresh restructuring programme, designed to counter weak passenger traffic and the capacity expansion of its rival Air Canada.

The carrier is talking to unions to try to achieve productivity gains of C$125 million ($90 million) through a mix of job cuts, salary savings and changes in working practices.

President Kevin Jenkins had planned to complete talks by the end of June, but, with tentative deals agreed with only two of the carrier's five major unions, he has decided to begin implementing the downsizing.

Jenkins has already announced that operations at Montreal will be consolidated at Dorval Airport, with the carrier withdrawing from Mirabel. Montreal will lose its once-a-week service to Rome, with a fifth weekly flight being added from Toronto. The Montreal pilots' base will also be closed.

These initial moves will eliminate close to 400 jobs, and save around C$15 million a year, according to Jenkins.

Canadian is reviewing its financial projections, he adds. The group had forecast that it would end 1995 with net profits of C$52 million and spare cash of C$278 million, but analysts now consider the estimates to be optimistic.

Source: Flight International