WestJet says it is not seeking financial aid from the federal government after months of talks between Ottawa and the airline.
It says each party has agreed to shift focus to restarting the travel and tourism sector, given encouraging vaccination rates.
WestJet’s overall passenger volumes in 2020 were down nearly 90 per cent from the year before, and the airline was forced to reduce its employee head count from 14,000 prior to 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 case counts fall.
WestJet has already restored service to all of the airports it served before the pandemic.
The federal government announced Monday that as of Aug. 9, fully vaccinated U.S. citizens and permanent residents will be allowed to enter the country, with the rest of the world to follow in September.
Shares of Canadian airlines were higher Tuesday on the Toronto Stock Exchange, with Air Canada shares up 6.5 per cent and Transat A.T shares 4.3 per cent, outpacing the broader index on a day of gains.
Private equity firm Onex Corp. purchased 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 a deal with Air Canada that allowed the battered airline to access as much as $5.9 billion in loans and equity financing from the public purse.
The deal gave Canada a six per cent stake in the airline. Air Canada also promised to restore domestic routes and refund passengers whose flights were cancelled due to COVID-19.
Air Canada’s passenger numbers had declined 73 per cent in 2020 following several years of record growth for the airline. During 2020, it reduced staff by more than 20,000, more than half of the pre-COVID total, then cut another 1,700 employees in January.
Air Transat also reached a deal in April for a $700-million loan from Ottawa.
Nearly half of that funding was earmarked for providing refunds to customers whose trips were disrupted by the pandemic, while the rest will go towards maintaining operations during pandemic restrictions.
The Transat deal came with additional caveats: In exchange for the loan, the company had to temporarily halt share buybacks an dividends, and executive pay was capped. Ottawa also has the right to buy up to 13 million shares in the company.
© 2021 The Canadian Press