De Havilland Aircraft of Canada Ltd. said Wednesday that it will pause production of new Dash 8-400 at its Downsview factory, as airlines re-evaluate their costs amid harsh market conditions.
Around 500 employees will be affected by the indefinite production pause, De Havilland Canada said, adding that its goal is to resume new aircraft delivery as soon as possible, subject to market demand.
"While this evolution is taking place against the backdrop of unprecedented industry circumstances, we see a bright future for De Havilland Canada and the Dash 8," said David Curtis, executive chairman of De Havilland Canada parent Longview Aviation Capital.
Bombardier, the previous owner of the Downsview site in Toronto, sold it in 2018. Longview Aviation Capital bought the Dash 8 aircraft program from Bombardier in 2019.
De Havilland Canada has begun preparing to leave the site over the latter part of the year and says there are a number of options in Canada. The Dash 8 program's site lease expires in 2021.
The production cuts underscore the uncertainty in the Canadian aviation industry, where market pressures have forced airlines to cut costs as much as possible in order to preserve cash. Regional routes, for which the Dash 8 is designed, have been hit especially hard, with companies like Air Canada and WestJet scaling down domestic flights.
Air Canada said in November that it was cancelling orders for 12 Airbus A220s and 10 Boeing 737 Max 8s as the airline was forced to scale down its operations.
As a result of the route cuts, thousands of airline workers have been laid off since the start of the year, when the federal government cracked down further on international travel.
Air Canada said last week that it expected that some of the quarantine measures could be replaced by testing programs by April 30, when airlines are scheduled to resume many flights. But experts have warned that a full recovery for the aviation industry could take years.
"We are sensitive to the impact that a production pause will have on our employees, and are committed to treating everyone with transparency and respect," Curtis said. "This decision is no reflection on the quality of our team, which has performed exceedingly well through the disruptions of the past year."