WestJet to lay off 1,700 pilots as COVID-19 pandemic halts most air travel

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WestJet Airlines Ltd. has issued layoff notices to 1,700 pilots as the Calgary-based carrier tries to slash costs after the COVID-19 pandemic closed borders and halted most aviation.

The layoff notices were sent by e-mail to the pilots of WestJet and its Swoop and Encore subsidiaries on April 15, effective May 1 for 700 pilots and on June 1 for 1,000.

John Aaron, WestJet’s vice-president of flight operations, said in an internal company e-mail obtained by The Globe and Mail that the airline is in the “regrettable” position of needing to reduce costs to mitigate the impact of the coronavirus outbreak. The company’s remaining 569 pilots will work in Calgary, Toronto, Vancouver and Winnipeg.

The 1,700 pilots will be placed on inactive status and remain on the company’s payroll in the federal government’s emergency wage subsidy program until they are laid off, WestJet spokeswoman Lauren Stewart said.

The world’s airlines face revenue losses of US$314-billion or 55 per cent in 2020, the International Air Transport Association said this week.

“Issuing layoffs in response to this crisis has always been a last resort for WestJet," Ms. Stewart said, adding that three-quarters of WestJet’s fleet is grounded. "However, the impact of COVID-19 on the aviation industry is colossal, and WestJet is making difficult but necessary decisions to rightsize our airline to weather the crisis. These actions will play a crucial part in WestJet’s ability to recover quickly and participate in Canada’s economic recovery.”

The federal wage subsidy, intended to prevent layoffs, pays 75 per cent of a worker’s salary to a weekly limit of $847 for 12 weeks retroactive to March 15. An employer is eligible for the program if its revenue dropped by 15 per cent in March and 30 per cent in the next months.

The yearly salary for an airline pilot in Canada ranges from about $50,000 to $300,000. That means the government wage subsidy amounts to a large pay cut for most pilots.

“We’re certainly glad that the government has put it out there, but I don’t know that it is going to help our members in the same way that it does other people,” said Dave Colquhoun, chairman of the Air Line Pilots Association’s WestJet council.

Idled pilots could lose their qualifications because they are not attending in-class seminars, simulator training or flying, Mr. Colquhoun said. “That is a real concern, especially with a prolonged period of inactivity,” he said in an interview.

Mr. Colquhoun said the Canadian government needs to take more steps to save the industry. The United States on Wednesday said it will give U.S. airlines a bailout worth US$25-billion in grants and loans in a package that includes the government taking warrants to buy stock in the companies. The Canadian government has said it is crafting a plan to aid the airline sector, but has yet to announce any broad measures.

The union said it is in talks with WestJet to limit the layoffs.

“The [union’s] negotiation goal is to arrive at an appropriate balance between short-term economic accommodations and protecting the value of the jobs remaining, in accordance with our pilots’ wishes,” the union said in an e-mail. “We also expect that the executive team is doing something similar: balancing liquidity and costs with the real risk of cutting too deeply and hobbling the ability of the company to spool back up in a timely fashion when the recovery starts. It is important this balance is correct.”

WestJet in late March laid off 6,900 of its 14,000-employee work force, but said last week 6,500 would be rehired and collect the wage subsidy. Air Canada and Air Transat have also placed thousands of employees on the subsidy, which does not require the employer to top up the wage beyond the 75 per cent from taxpayers

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