Air Canada says it will eliminate 4,000 more jobs as part of an 'aggressive' plan to cut costs in response to a slowing economy.
The cuts are in addition to 3,500 job losses which the airline announced late last year.
President and chief executive Mr Robert Milton says Air Canada must become a leaner and more efficient airline.
He says: "While we saw the economic downturn coming and adjusted our business plan last December, we warned earlier this year that if economic conditions worsened we would need to take further action.
"The ongoing and increased severity of the current economy's impact on the North American airline industry demands an increasingly decisive and aggressive action plan."
Air Canada has released figures showing a net loss of $108 millionamid a "dramatic fall-off in business" in the second quarter to the end of June.
Mr Milton says he expects Air Canada to break even in the current quarter but to lose money in the final three months of the year and the first quarter of next year, as a result of reduced business travel and high fuel prices.
About 1,800 people taken on since December 23rd, 1999 - who are not covered by job protection guarantees Air Canada made when it took over Canadian Airlines last year - are to be laid off with effect from November 22nd.
Mr Milton says the remaining 2,200 job losses will take effect in the period starting in April, 2002.
He adds: "While the decision to lay off staff is never an easy one, we must become a leaner, more efficient airline, while still maintaining industry-leading customer service."