WestJet cutting flights to Atlantic Canada, laying off staff

Airline bailout may hinge on customer refunds Passengers hope for money back after flights cancelled at the start of the pandemic. CTV's Peter Szperling reports.

CALGARY — WestJet Airlines Ltd. is suspending operations to four cities in Atlantic Canada and slashing service to others in the region as the pandemic continues to take a toll on the airline industry.

WestJet said Wednesday it will indefinitely halt routes to Fredericton, Moncton, N.B., Sydney, N.S., and Charlottetown, while "dramatically" paring down service to Halifax and St. John's, N.L.

The Calgary-based airline is also suspending operations between Toronto and Quebec City.

The cuts eliminate more than 100 flights weekly starting Nov. 2, and remove nearly 80 per cent of WestJet's seat capacity from the Atlantic region, the company said.

"The lack of travel demand combined with domestic quarantines means that sadly we can no longer maintain our full Canadian network of service," CEO Ed Sims said in a video post.

"Since the pandemic's beginning, we have worked to keep essential air service to all of our domestic airports, but we are out of runway and have been forced to suspend service in the region without sector-specific support."

The airline, which Onex Corp. acquired for $3.5 billion in December, also said Wednesday it will lay off 100 corporate and operational support employees, on top of the 4,000 workers it has laid off since March.

The cuts do not include airport staff from the affected Atlantic airports due to an earlier restructuring.

In 2019, WestJet flew more than two million passengers per month on average. Since the onset of COVID-19 in March, it has flown a total of just over one million passengers, or about seven per cent of the number it would typically transport during that time.

More than 70 per cent of the carrier's fleet remains grounded, incurring maintenance and storage costs without drawing revenue.

Hefty fee increases at a number of airports, including five that WestJet serves in Atlantic Canada, have added to the challenge facing large airlines.

Nav Canada, which runs the country's air navigation system, hiked its rates by 30 per cent, prompting WestJet to raise its surcharges on domestic flights by between $4 and $7 per passenger.

"With thousands out of work and a COVID-induced recession in full swing, price increases that make air travel even more expensive are not what the travelling public needs or can even afford right now," Sims said.

WestJet follows its larger rival in stepping back from regional operations. Air Canada announced in June it would suspend service on 30 regional routes, mainly affecting travellers to and from the Maritimes, Quebec and Saskatchewan.

Smaller players such as Newfoundland-based PAL Airlines and Quebec-based Pascan Aviation have stepped in to fill the gap. "And undoubtedly this will be the case with the resulting WestJet cuts," said John Gradek, who heads McGill University's Global Aviation Leadership program.

"I think you're going to get as much choice if not more choice by regional carriers."

The regional companies' smaller planes have lower fuel costs and airport landing fees and better match demand in regional markets amid the pandemic.

"WestJet was only carrying about 20 to 30 passengers a day on a (76-seat) Q400, which is impossible to make money. But 20 or 30 passengers on a Beechcraft airplane, which is what Provincial Airlines would fly, they'll be doing very well," Gradek said.

Regions in Western Canada could be "next on the hit parade in terms of markets that will transfer from national carrier to regional carrier," he added.

Maritime leaders expressed disappointment in WestJet's pullback, with Prince Edward Island Premier Dennis King calling on Ottawa to "urgently address" the situation.

"For several months, I have consistently raised concerns about tourism and travel with the prime minister and the federal government, and for months I have been assured that support would be provided to these sectors," King said in a statement.

"We remember the day when there was no competition in Atlantic Canada, that is not where we want to go back to," said Nova Scotia Premier Stephen McNeil.

Neither leader recommended specific steps to the federal Liberals.

The four Atlantic provinces continue to enforce a travel "bubble" that requires a two-week quarantine for those arriving from outside the region.

Canada, unlike its G7 counterparts, has opted to hold off on financial aid tailored to the airline sector, instead offering measures such as federal wage subsidies available across industries.

Prime Minister Justin Trudeau has pledged $41 million in emergency funding for regional airlines to ensure services for remote communities in the North.

This report by The Canadian Press was first published Oct. 14, 2020.