WestJet said that after months of negotiations with the airline in Ottawa, it did not seek financial assistance from the federal government.
It said that given the encouraging vaccination rate, all parties have agreed to shift the focus to restarting the travel and tourism industry.
WestJet’s total passenger traffic in 2020 has dropped by nearly 90% compared to the previous year, and the airline was forced to reduce the number of employees from 14,000 before the pandemic to 4,000.
However, the airline said that with the relaxation of restrictions and the decline in the number of COVID-19 cases, travel demand is expected to rebound this summer.
If the federal government does not provide assistance to airlines, WestJet will cut its “Leadership”: Expert
WestJet has resumed service at all airports it served before the pandemic.
The federal government announced on Monday that from August 9th, fully vaccinated US citizens and permanent residents will be allowed to enter the country, and other parts of the world will follow up in September.
Air Canada shares rose on the Toronto Stock Exchange on Tuesday, Air Canada shares rose 6.5%, and Transat AT shares rose 4.3%, surpassing the broader index in one day’s gains.
Private equity firm Onex Corp. acquired WestJet in 2019.
The prospect of increased domestic and international travel in Canada emerged after a brutal period in the passenger transport sector.
In April of this year, Ottawa and Air Canada reached an agreement to allow the hard-hit airline to obtain up to $5.9 billion in loans and equity financing from its public wallet.
This transaction gave Canada a 6% stake in the airline. Air Canada also promised to resume domestic routes and refund passengers who cancelled flights due to COVID-19.
After several years of record growth, Air Canada’s passenger numbers have fallen by 73% in 2020. During 2020, it laid off more than 20,000 jobs, accounting for more than half of the total before COVID, and then cut another 1,700 jobs in January.
Air Transat also reached an agreement in April to obtain a $700 million loan from Ottawa.
Nearly half of the funds are dedicated to providing refunds to customers who have interrupted travel due to the pandemic, while the remaining funds will be used to maintain operations during the pandemic restrictions.
The Transat transaction was accompanied by additional warnings: In exchange for loans, the company had to temporarily stop stock repurchases and dividends, and executive compensation was restricted. Ottawa also has the right to purchase up to 13 million shares of the company.
© 2021 Canadian Press
