Westjet freezes hiring, may suspend routes as pandemic pounds bottom line
CALGARY Westjet Airlines has instituted a companywide hiring freeze and is offering its employees voluntary leaves as a result of the novel coronavirus.
The outbreak, which was declared a pandemic by the World Health Organization on Wednesday, has taken a heavy toll on the Calgary-based company’s bottom line. Spokeswoman Lauren Stewart said in an email that international travel restrictions and public fears about COVID -19 have “significantly weakened” demand across Westjet’s network and the company must take action to protect its “financial well-being.”
Employees are being offered leaves of absences, voluntary exits, voluntary early retirements and possibly reduced work weeks.
The airline — a formerly publicly listed company that is now privately owned by Toronto-based Onex Corp. — will also look to cut routes and reduce network capacity by 12 per cent or more, Stewart confirmed.
The cuts may include domestic, transatlantic, sun destination and transborder routes.
Westjet has so far declined to comment on the future of its new transatlantic flight from Calgary to Rome, which is scheduled to launch in May. The Public Health Agency of Canada currently advises against all non-essential travel to Italy given the widespread transmission of COVID -19 in that country.
“This situation remains extremely fluid, we will not speculate on additional measures we may need to take,” Stewart said.
Westjet’s difficulties are being compounded by the nearly yearlong global grounding of the Boeing Max 8 aircraft, which has been under an international no-fly order in the aftermath of two fatal crashes involving other airlines. The Boeing Max represents seven per cent of Westjet’s overall fleet, and is the most fuel-efficient of its aircraft. In an interview in December, Westjet CEO Ed Sims told Postmedia he was proud that the airline has so far been able to avoid layoffs as a result of the lost revenue and unavoidable cost increase caused by the loss of the Max 8.
In a news conference Wednesday, Alberta Premier Jason Kenney said he has spoken to Sims about the COVID -19 situation and added he is concerned about the effect the pandemic will have on the homegrown airline. The company has said it will also freeze discretionary spending and is not ruling out other cost-saving measures.
“They are an Alberta-based company and their yields and revenues and cash flow are down dramatically,” Kenney said.
Westjet is allowing all passengers with flights booked before March 3 for travel in March and
April a one-time fee waiver for changes or cancellations. The change or cancellation must be made at least 24 hours before departure.
Westjet has about 14,000 employees across Canada. With 2,000 people working at its corporate headquarters in Calgary’s northeast alone, the company is one of the city’s largest private-sector employers.