WestJet is not seeking financial assistance from the federal government
WestJet says it is not seeking financial help from the federal government after months of talks between Ottawa and the airline.
It says each party has agreed to shift focus to restart the travel and tourism sector, given encouraging vaccination rates.
WestJet’s total passenger volumes in 2020 were down nearly 90 percent from the previous year, and the airline was forced to reduce its number of employees from 14,000 before the pandemic to a low of 4,000.
But the airline has said it expects travel demand to rebound this summer as restrictions ease and COVID-19 cases decline.
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WestJet has already restored service to all airports it served before the pandemic.
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The federal government announced Monday that beginning August 9, fully vaccinated U.S. citizens and permanent residents will be able to enter the country, and the rest of the world will do so in September.
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Canada will allow fully vaccinated US leisure travelers beginning Aug. 9.
Canadian airline shares rose on the Toronto Stock Exchange on Tuesday, with Air Canada shares rising 6.5 percent and Transat AT shares 4.3 percent, outperforming the broader index by a quarter. earnings day.
Private equity firm Onex Corp. bought WestJet in 2019.
The prospect of increased travel, both within Canada and internationally, comes after a brutal period for the passenger transport sector.
In April, Ottawa reached an agreement with Air Canada that allowed the ailing airline to access up to $ 5.9 billion in loans and equity financing from the public purse.
The deal gave Canada a six percent stake in the airline. Air Canada also promised to restore domestic routes and reimburse passengers whose flights were canceled due to COVID-19.
Air Canada’s passenger numbers had declined 73 percent in 2020 after several years of record growth for the airline. During 2020, it cut staff by more than 20,000, more than half the pre-COVID total, and then cut another 1,700 employees in January.
Air Transat also settled in April for a $ 700 million loan from Ottawa.
Almost half of that funding went to provide refunds to customers whose travel was interrupted by the pandemic, with the rest going to maintain operations during pandemic restrictions.
The Transat deal came with additional caveats: In exchange for the loan, the company had to temporarily halt share buybacks and dividends, and a cap was placed on executive pay. Ottawa also has the right to buy up to 13 million shares of the company.
© 2021 The Canadian Press