WestJet’s President and CEO Ed Sims is hoping his company can secure a fair deal with the Government of Canada following the announcement of Ottawa’s multibillion-dollar relief package for Air Canada.
The federal government's support for Air Canada includes $5.4 billion dollars in loans, which the airline must repay, and a $500 million-dollar equity investment, making the Canadian government a shareholder of the country’s largest airline for the first time since the 1980s.
“Bittersweet” is reportedly the word Mr. Sims used to describe the Air Canada-Ottawa agreement, according to a memo sent to WestJet employees, obtained by the Canadian Press.
“It was bittersweet to learn this week of the relief package for our largest competitor. Sweet that the government has finally recognized the vital role airlines play in our national economy. But bitter nonetheless that by total contrast to the U.S. or U.K., our government has not taken a sector-wide approach and has instead chosen to negotiate one by one,” Mr. Sims wrote in the memo, according to reports.
Mr. Sims said the deal with Air Canada could be “problematic” unless WestJet gets equitable treatment, the report says.
The Air Canada agreement announced on April 12 includes conditions to restore regional routes across the country, cap executive compensation at $1 million, protect jobs, refund passengers for cancelled travel during the pandemic and protect travel agent commissions on refunded fares (including sales made with Air Canada Vacations).
“Although the process was lengthy, please trust that every decision we made, we tried to the best of our ability to consider all the implications of our industry partners, whether it’s in respect to refunds or future policies,” said Lucie Guillemette, executive vice-president and CCO at Air Canada and President of Air Canada Vacations, addressing travel partners at a virtual town hall on April 13.
Financial support for Canada’s other airlines, including WestJet, Transat AT and Porter Airlines, are still in negotiation stages with the federal government, Finance Minister Chrystia Freeland said Monday.
Minister Freeland said officials are currently having “constructive discussions” with WestJet.
“One of the things that has become clear in these negotiations is the value to Canada of having two national airlines – WestJet and Air Canada. Competition is good for Canada and it’s good for Canadian travellers and workers,” said Minister Freeland.
“It’s also become clear that each of those national airlines have specific characteristics.”
The criteria outlined by the Canadian government, such as the need to refund passengers, protect jobs and restore regional routes, “will be the same” in any potential WestJet deal, she added.
“The precise shape of an agreement will depend on the specific needs of each airline,” she said.
Immediately following the announcement of Ottawa’s support for Air Canada, the WestJet Group of Companies issued a statement Monday night, saying that its discussions with Ottawa on a "safe travel-restart framework" continue.
"We remain focused on a long-term solution that will serve the best interests of Canadians," the company said, noting that it would provide an update "at an appropriate time."
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