New revelations have exposed the opulence of Air Canada executives. They had the gall to pay themselves new bonuses totaling $10 million in “incentive bonuses” in addition to special stock awards, even as the federal government is providing a $5.9 billion bailout to the company. This is the clearest and most obscene example of what private capitalist ownership is all about. It’s time to renationalize Air Canada, and put the airline industry under collective ownership, managed and controlled democratically by the workers themselves.
A nice gift straight from our pockets
After the airline laid off half of its 38,000 workers at the beginning of the pandemic while receiving $656 million in wage subsidies, and now that the federal government has secured a massive bailout to save the company, such news seems straight out of a satirical newspaper. But make no mistake, this is very serious. The company announced that these bonuses would make up for the tragic pay cut that executives took last year. As we all know, when you go from a multi-million dollar annual salary to just a few million or even a few hundred thousand dollars, it can be hard to make ends meet!
But that’s not all. The company justified this decision by saying that the management team “reacted urgently, decisively and skillfully to mitigate the impact of the COVID-19 pandemic on the company.” It is true that laying off so many employees in such a short period of time is quite a feat! And what about the hours spent licking the government’s boots in order to siphon off public coffers? It’s easy to see why, after giving well-deserved bonuses to executives that “work” so hard, there is nothing left for the thousands of unemployed people laid off by Air Canada.
The executive bonuses came as the company was lobbying the federal government for financial assistance. This just goes to show that the opulence of the bosses is matched only by their arrogance.
The bailout package announced in April by the Liberal government includes a clause limiting the pay of executives to $1 million a year. But in the wake of the executive bonuses, the Prime Minister simply said, “I hope that Air Canada will explain their decision and their reasoning to Canadians who are shocked by the choices that Air Canada has made.” How many clauses will Air Canada flout without any consequences?
Finally, in response to the outcry, executives said they would forgo their bonuses. But this is just smoke and mirrors, and only a result of the fact that the scandal was made public. Once the spotlight is focused elsewhere, our generous bosses will line their pockets in other ways. But even worse, only two of the ten million will be returned! These people are laughing at us.
Another condition for the loan is the reimbursement of plane tickets. Since the beginning of the pandemic, Air Canada and other major airlines in the country have refused to reimburse their customers for flights that were cancelled due to health measures. According to Air Passenger Rights, as of March 2021, there were approximately 3.9 million Canadians who had not yet been reimbursed by the airlines, representing approximately $3.9 billion.
But don’t cry robbery: the airlines have gone to the trouble of turning the unrepaid money into credits for future travel. After all, in the midst of an economic crisis and a growing real estate bubble, do indebted students, precarious workers and the newly unemployed really have anything better to do than prepare for their next post-pandemic sunny destination? But Air Canada should still know how to count: for the purchase of a $1059 ticket, a customer recently received a magnificent credit of $170! They are obviously just taking us for fools.
But those who complained about Air Canada’s lack of kindness should stop whining, because the company has just started reimbursing its customers thanks to a $1.4 billion portion of the bailout package set aside for this purpose. So Air Canada is now paying back your money with your money! This must be what capitalists call innovation.
Workers and communities affected
The pandemic came as a shock to the airline industry as overnight, companies saw their revenues drop drastically. Layoffs came quickly. But Air Canada didn’t have to wait too long for the emergency wage subsidy, a gift provided by the government that covers 75 per cent of wages. In fact, the company has the honour of being the biggest pigs at the trough of public funds, having received $656 million from the wage subsidy. But strangely enough, almost all of the employees who were laid off have not been rehired, and there were more layoffs again in January 2021. One wonders where the money went…
Although the bailout package includes a clause that requires Air Canada to keep its current employees employed, there is no requirement for the company to rehire laid-off employees (let alone rehire them on the same terms and wages). For the laid-off workers who have been waiting for months in utter insecurity, this expensive package is nothing more than a slap in the face, funded by our tax dollars.
The huge downturn in the company’s operations has not only affected employees. Air Canada has also quickly shut down operations in many parts of the country, and has indefinitely discontinued service to smaller cities. While the company practically has a monopoly on regional routes, this is having a disastrous impact on more remote locations. Canada is a huge country and air travel is an economic and social necessity for many communities. The connection to major centres can be extremely difficult, and leaving a province or territory can sometimes only be done realistically by air.
Air Canada is not the only company that has discontinued its regional routes. Small regional flights are not profitable for the major airlines. They are usually just a way to get more customers for international flights. But the pandemic has changed the situation by interrupting air traffic. Given this, even if these flights meet an important need, who cares? The logic of profit is only concerned with the needs of shareholders.
It is true that with the bailout Air Canada is expected to resume operations at certain regional airports. However, flights that were supposed to resume in early June have already been postponed for at least a month. But if you’re having trouble getting to Yellowknife to see your family, you can take comfort in the fact that flights to Dubai have already resumed!
The generous Trudeau
The Liberal government says the $5.9 billion is not just a financial gift, but a loan that must be repaid in full. But the Liberal government has an unfortunate tendency to be generous when big business reaches out for help, as evidenced by the astronomical amounts of money given away to business during the pandemic. Instead of airplanes taking to the skies, it was money that quickly flew out of public coffers and into the coffers of the capitalists.
The bailout includes a $5.9 billion loan at a low interest rate of just over one per cent. We should also not forget the great charity of the altruistic Trudeau government, which decided in 2018 to discreetly write off the $2.6 billion debt of the American auto giant Chrysler, just when the multinational was posting exceptional profits. Surely, such favours would not be granted to the millions of Canadian students and families having a hard time to make ends meet.
It’s the same old song: for workers, youth and the poor, the government calculates and claims to the nearest cent. Don’t take one extra penny from the CRB! But the calculator appears not to work when it comes to the capitalists. One can easily imagine the Air Canada bosses—and those of the other major airlines who are also knocking on the government’s door—laughing their heads off.
So much Liberal generosity must be exhausting. Surely this explains why the government waited more than six months before deigning to lift a finger to address the issue of non-refunded airline tickets. It also explains why there is generally no energy left to deal with the urgent drinking water crisis on Indigenous reserves or to introduce the pharmacare that the Liberals have been talking about for over twenty years.
Why feed these pigs?
While the Liberals come from the same farm as the Air Canada bosses, one would expect the leadership of the Canadian labour movement not to want to feed these pigs. But it would seem that years of class collaboration and “strategic voting” for the Liberals has tainted union leaders such as Unifor president Jerry Dias, who has urged the government to swoop in and save the poor airlines.
In a letter co-signed with the president of the Business Council of Canada, that great friend of the Canadian working class, and published in the Toronto Sun last February, Dias said: “Throughout the COVID-19 pandemic, Canada’s airlines have done everything our political leaders could reasonably ask of them, and more.” What a beautiful love letter to the bosses, which calls for public money, paid out of the pockets of Canadian workers, to be invested in order to “save the industry”.
Without getting into Dias’s call for unity between the bosses and the unions, the same argument that the government should bail out Air Canada can be found nonetheless within the leadership of other unions, such as the Canadian Labour Congress. On the other hand, the Canadian Union of Public Employees, which represents 10,000 flight attendants at the company, has been very critical of the lack of guarantees with regard to job losses. However, the idea of corporate welfare is not being questioned, only its terms.
Jagmeet Singh was also in favour of the bailout, arguing that the government would now have more power to ensure that good jobs are maintained. He refers to the fact that the deal calls for the government to buy $500 million in shares, which now gives it a six per cent stake in the company. As if having a minuscule share of the company would change anything in the balance of power! If a ten-wheeler is going full speed ahead, a little nail in the ground is not going to stop it.
When you listen to the reformists and labour leaders, the recipe seems simple: save the bosses to save jobs. Let’s feed the pig so it can be our food. But the case of Air Canada clearly shows us that nothing could be further from the truth. The pig eats everything, leaves its droppings, and then scurries away. The time has come to stop fattening the pig.
Let’s take control
Air Canada was founded in 1937 as a state-owned company, but was privatized in 1988. A few months ago, the International Association of Machinists and Aerospace Workers argued for the re-nationalization of the company. This position should have been taken up by the country’s main trade unions.
Leaving the ownership of Air Canada in the hands of a handful of capitalists is completely absurd, especially when the amount of government support is almost equal to the value of the company itself—estimated to be between $7 billion and $9 billion. We could also argue that the company has already been largely paid for by taxpayers over the years through subsidies, special programs and new aid measures since the pandemic. But why even pay to take over Air Canada? Workers, customers, communities; everyone is getting screwed right now. Not one penny should be given to corporate parasites!
Air travel is an absolutely essential service, and leaving the industry in the hands of the capitalists is a recipe for disaster for many communities and regions across the country, not to mention the losses for workers. Too much is at stake to let the anarchy of the market and the greedy capitalist run this sector. We urgently need democratic planning for the entire airline industry, which can ensure affordable flights and meet the particular needs of the regions of the country.
Only the nationalization of the entire industry can get us out of this blind alley. This means expropriating the capitalists without compensation, and placing the sector under genuine democratic workers’ control. That is the only way we can ensure that good union jobs are maintained. This is what a real, bold leadership of the labour movement should be fighting for, rather than advocating corporate welfare.
Moreover, the collapse of the airline industry since the pandemic is the clearest demonstration of the complete bankruptcy of the capitalist system, which is completely incapable of meeting our needs in such a situation. If profits collapse, the industry collapses. Needs don’t fit into the equation. It is high time that the labour movement actively fight for a way out of this cesspool of capitalism, and fight for a socialist society.