WestJet has frozen discretionary spending and hiring as it deals with the fallout of coronavirus, which has dramatically curtailed air travel worldwide.
The rapid spread of novel coronavirus has many Canadians cancelling travel plans, and some companies have suspended non-essential travel.
The Public Health Agency of Canada has issued travel warnings about countries with high levels of infection, and is asking all travellers to monitor their health for any symptoms.
The effect on WestJet’s business has been “dramatic” and requires “immediate cost reduction initiatives,” spokesperson Morgan Bell said by email Wednesday.
All discretionary spending and company-wide hiring has been frozen, and employees have been offered voluntary leave options, the Calgary-based company said.
WestJet is also considering how to reduce and temporarily pause 12 per cent or more of its flight capacity. That may include domestic, transatlantic and cross-border flights as well as flights to sun destinations.
In the statement, the spokesperson did not comment on whether or not layoffs are a possibility.
“This situation remains extremely fluid,” Bell said. “We will not speculate on additional measures we may need to take.”
The company says it will not compromise guest or employee safety during the spread of the respiratory illness, known as COVID-19. On Tuesday, WestJet told customers it had increased sanitization of aircraft and was using “hospital-grade Clorox wipes and spray.”
WestJet says guests may be eligible for refunds for conoravirus-related cancellations. Air Canada, Air Transat and Sunwing have offered similar promises for those who need to change their flights.
The uncertainty from COVID-19 has sent shockwaves through the travel industry, and the global economy as a whole.
Alberta Premier Jason Kenney has gone to Ottawa to ask for urgent help from the federal government to deal with the economic consequences of the coronavirus spread and plunge in global oil prices.
Kenney said he spoke with WestJet CEO Ed Sims this week about the dramatic effect on the company.
“Their loads and revenue and cash flow are down dramatically, so this is right across the economy,” Kenney told reporters Wednesday.
WestJet was already dealing with the financial impact of the grounding of the its 13 Boeing 737 Max aircraft. The company statement said it had “battled relentlessly to ensure the business could cope.”
There is no vaccine for coronavirus, which has killed more than 4,000 people of the nearly 114,000 infected worldwide, according to the World Health Organization’s latest situation update.
As of early Wednesday morning, Canada has reported 101 cases of COVID-19, including one death. In Alberta, 14 cases had been reported by Tuesday.