Air Canada has announced it is cutting 2,000 jobs - eight per cent of its workforce - by the end of this year. Canada's flagship airline blamed the sharp cut in capacity on rising fuel costs. The carrier has also cut some of its routes. This report from Lee Carter:

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The cost of jet fuel has more than doubled in the last year and quadrupled since 2004. Air Canada says every time oil increases by $1 a barrel, it costs the airline an additional $26 million a year. Fuel is its largest expense, representing more than 30 per cent of its total operational spending. The airline has not ruled out further cuts to its capacity if oil prices remain at current levels.

Air Canada says it will begin a round of meetings with its unions next week to work out how the 2,000 jobs will be eliminated. The airline says it is hopeful some of them can be re-allocated. Among routes being cut are Toronto to Rome in the low traffic season and the complete elimination of Air Canada's non-stop service from Vancouver to Osaka.

Lee Carter, BBC News, Toronto

Listen to the words

did not come entirely as a surprise
was not something that no-one had expected

Carriers
airlines

to reduce capacity
to cut the number of flights and carry fewer passengers

has more than doubled
is more than twice as high

quadrupled
increased fourfold; become four times as high

its largest expense
what the airline spends most of its money on (compared to how much it pays for other things)

ruled out further cuts
excluded the possibility of shrinking its business even more

to work out
to plan and agree

in the low traffic season
when fewer passengers are flying

non-stop service
flights that don't land anywhere until they reach their final destination

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