The airline, which currently employs some 27,000 people worldwide, said Thursday the jobs are part of its strategy to "seize new commercial opportunities, enhance customer service and renew our workforce."
Air Canada (TSX:AC.B) says it will hire approximately 400 flight attendants and some 500 airport customer service agents and baggage handlers. Sixty customer service agents will be hired for call centres in Montreal and Toronto.
The company — which has been beset by labour problems that have hurt both its reputation and its share price — cited attrition as one of the main drivers behind the hiring of customer service agents and flight attendants.
Air Canada spokesman Peter Fitzpatrick said he didn't have exact number of employees lost through attrition or departures through retirement and career changes.
But, he added that the number of hires is carefully calculated to replace those employees as well as augment the workforce, while keeping costs low.
In addition to those leaving for other reasons, the company is also offering voluntary separation packages, or buyouts, which would usher out an unspecified number of highly paid employees.
They'll be replaced with new hires, who will make lower wages and take a hybrid pension plan — agreed upon in the latest collective agreements, which is less burdensome to the company.
"With our new labour contracts there's a new pension program for new hires as well," Fitzpatrick said.
"We are a heavily unionized workforce and the people that are leaving tend to be senior and the ones coming in will be (lower on the pay scale) ... so there will be some savings there."
Air Canada president and CEO Calin Rovinescu said its new recruitment program is "consistent with our focus on controlling costs to become more competitive in our various markets."
"At a time when youth unemployment is nearly 15 per cent in Canada, we are pleased to offer exciting career opportunities that will especially appeal to young people."
In addition to the hires at the main airline, the company says it will hire approximately 150 flight attendants and 50 pilots for its low-cost airline — which is slated to launch in 2013.
Air Canada pilots complained during labour negotiations earlier this year that the airline's launch of a low-cost carrier could threaten their job security and working conditions. In the end, a federal arbitrator chose Air Canada's final offer that included provisions allowing the airline to create a budget carrier.
The Air Canada Pilots Association noted Thursday that "the provisions of the contract imposed by federal arbitration contains a lower pay scale for pilots who fly for the (low-cost carrier)."
On Wednesday, Air Canada said it's just a couple of weeks away from announcing details of the new discount carrier that will serve transatlantic and leisure routes in the Caribbean and the United States.
It will be wholly owned by Air Canada, but carry a different name.
The pilots are one of two major labour groups at Air Canada that were forced to accept the airline's final offer in labour negotiations. The other union is the International Association of Machinists and Aerospace Workers, which represents repair and ramp crews.
Both disputes were sent to binding arbitration ordered by the federal government, which brought in back-to-work legislation after Air Canada locked out the pilots and the Machinists announced they would go on strike earlier this year.
In August, the airline reported it lost $96 million in the second quarter, more than double the $46 million it lost in the same period a year earlier and more than analysts had expected.
The loss was equal to 35 cents per share, up from 17 cents per share in the comparable year-earlier period.
On an adjusted basis, the Montreal-based airline had a loss of five cents per share, up from a loss of one cent per share a year ago.
Air Canada is the country's largest domestic and international full-service airline providing scheduled and charter air transportation for passengers and cargo to more than 175 destinations on five continents.
It is the world's 15th largest commercial airline, providing service to more than 32 million passengers a year.
Air Canada says information on the job postings can be found at aircanada.com/careers, adding applications can be filled out online.