Ottawa, Jan 14 (IANS): Air Canada announced that it was laying off about 1,700 employees in the wake of the official travel restrictions against the still raging Covid-19 pandemic.

In the announcement on Wednesday, the flag carrier said it is adjusting its network under its Covid-19 Mitigation and Recovery Plan by further reducing first-quarter system capacity by an additional 25 per cent, reports Xinhua news agency.

As a result of these system-wide changes, there will be a workforce reduction of approximately 1,700 employees, in addition to the over 200 impacted employees at its Express carriers, it said.

With the 25 per cent reduction, capacity in the first quarter of 2021 will be about 20 per cent of what Air Canada operated in the first quarter of 2019.

The airline said it is not the news it is hoping to announce this early into the new year.

"We look forward to seeing our business start to return to normal and to bringing back some of our more than 20,000 employees currently on furlough and layoff."

Last week, the Canadian government made it mandatory for anyone aged five and older flying into the nation to show proof of a negative Covid-19 test taken in the previous 72 or 96 hours, depending on the country.

The Canadian airline industry opposed the official order and said it would create confusion at departure gates and should be accompanied by relaxed quarantine requirements.

In Wednesday's announcement, Air Canada said that increased travel restrictions by federal and provincial governments have had an immediate impact on the company's bookings.