Canada Markets closed

WestJet to rehire 6,400 workers using Ottawa's wage subsidy program

Xinhua/Zou Zheng via Getty Images

WestJet Airlines will rehire 6,400 laid-off employees by using the federal government’s wage subsidy program as the COVID-19 pandemic continues to wreak havoc on the airline industry.

The Calgary-based airline announced that it plans on applying for the Canada Emergency Wage Subsidy program, which will supplement 75 per cent of wages for 6,400 previously laid-off employees.

“This does not automatically mean that they will be coming back to work, as there may not be work there for them,” WestJet’s chief executive Ed Sims said in a statement released Wednesday.

“But it does help make ends meet and I am grateful for the hard work by the Government of Canada and of all governments across Canada to provide businesses with the tools to continue operating in these challenging times.”

In order to qualify for the federal program, companies need to show that revenue declined by at least 15 per cent. WestJet suspended all international and transborder flights last month and cut domestic seat capacity in response to the coronavirus pandemic, as governments around the world imposed strict travel restrictions and passengers abandoned travel plans.

WestJet is not alone in turning to the wage subsidy program to keep employees on the payroll.

The move comes a day after Air Canada announced it plans on re-hiring and retaining thousands of employees through the use of Ottawa’s wage subsidy. The airline announced last month that it would cut 16,500 employees as a result of the coronavirus pandemic, which has led to a severe decline in traffic as governments imposed strict travel restrictions and passengers stay home.

Flair Airlines also said it plans on rehiring the 130 employees it laid off, topping up the subsidy so workers will earn 100 per cent of their wages. The airline will also fully restore salaries that were cut in the wake of the pandemic.

Flair has seen revenues decline by 90 per cent due to the coronavirus pandemic. Still, the company has kept 70 per cent of staff on the payroll by pivoting operations to focus on cargo and charter flying.

Download the Yahoo Finance app, available for Apple and Android and sign up for the Yahoo Finance Canada Weekly Brief.