WestJet cuts routes, cites ‘incoherent’ Canada covid rules

WestJet Airlines Ltd. said it would reduce capacity by a further 30% in February and March, affecting the jobs or pay of roughly 1,000 employees and bringing the number of domestic and international flights it operates down to levels not seen in almost 20 years.

The cuts come after Prime Minister Justin Trudeau’s government ordered travelers to present a recent negative Covid-19 test before being allowed to board flights into Canada. The new rules took effect Thursday.

After that requirement was announced, the Calgary-based company saw “significant reductions in new bookings and unprecedented cancellations,” WestJet Chief Executive Officer Ed Sims said.

“The entire travel industry and its customers are again on the receiving end of incoherent and inconsistent government policy,” Sims said in a company statement. “We have advocated over the past 10 months for a coordinated testing regime on Canadian soil, but this hasty new measure is causing Canadian travelers unnecessary stress and confusion and may make travel unaffordable, unfeasible and inaccessible for Canadians for years to come.”

Trudeau’s ministers and the airline sector have been locked in tense discussions over a possible government relief package since the pandemic began in March 2020. Official talks began in November with Transport Minister Marc Garneau saying any state aid would have conditions, including issuing refunds for unused tickets. The government has insisted that airlines not cut domestic routes.

The Globe and Mail reported Friday that Deputy Finance Minister Michael Sabia was playing a lead role in working with the airlines to provide aid.

Overall, after the new cuts are made through March, WestJet will have reduced its capacity roughly 80% from a year earlier. More than 230 additional weekly departures will be dropped, including 160 domestic flights, and 11 international routes will be suspended. Daily international flights will fall to five, compared with 100 last year.

The airline will operate about 150 daily departures in all, the smallest number since June 2001, it said. Roughly 1,000 employees across WestJet companies will be affected by furloughs, temporary layoffs, unpaid leaves or reduced hours. The company will also freeze hiring.

The latest employment numbers in Canada show the labor market is deteriorating. For the first time since April, the country lost jobs as health authorities tightened measures to contain the spread of the virus.

©2021 Bloomberg L.P.