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Canada: WestJet Lays Off 1,700 Workers Amid Wage Subsidy

WestJet will lay off 1,700 pilots across its mainline carrier, regional subsidiary Encore and low-cost carrier Swoop, while keeping them on payrolls through the duration of Canada’s wage subsidy that ends in June.

The Calgary-based airline tells Cirium that the layoffs will be staggered beginning on both 1 May and 1 June as “a last resort” in response to the coronavirus downturn.

“WestJet is making difficult but necessary decisions to right-size our airline to weather the crisis,” the airline says. “These actions will play a crucial part in WestJet’s ability to recover quickly and participate in Canada’s economic recovery.”

Employees will be listed as “inactive” but will receive payroll during the duration of Canada’s stimulus program.

The notification of these layoffs comes a week after WestJet pledged to rehire 6,400 employees by participating in the Canadian Emergency Wage Subsidy. That legislation became law on 11 April and subsidises 75% of an eligible company’s wages for up to 12 weeks, retroactive to 15 March. The programme makes C$71 billion ($50.6 billion) available to companies that lost 15% of their year-over-year revenue during March due to coronavirus, and 30% of year-over-year revenue for April and May.

WestJet’s private equity owner Onex signaled its support for ultra-low-cost carrier Swoop during this crisis. Charles Duncan was appointed president of the carrier on 17 April and he continues to serve in his existing role as WestJet’s executive vice-president in charge of cargo.

“In spite of the current challenges in the market, we remain committed to the ultra-low-cost carrier model and believe it will be an important element of our future success,” Duncan states.

Some analysts view Swoop as a hedge against other low-cost carriers British Colombia-based Flair Airlines or Kelowna-based Canada Jetlines.

It operates nine Boeing 737-800 aircraft, four of which are in storage during the coronavirus downturn, according to Cirium fleets data.

By: Cirium



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