Following a grim outlook from the International Air Transport Association (IATA) suggesting that aviation will remain cash negative throughout 2021, WestJet has reportedly issued layoff notices to 415 pilots amid union negotiations.
According to a Feb. 26 report in the Globe and Mail, WestJet sent the notices while communicating with the Airline Pilots Association regarding plans to renew a six-month memorandum of agreement that expires on March 31.
The agreement reportedly addresses working conditions while mitigating the impact of the collapse in demand for air travel.
WestJet confirmed that layoff notices were sent ahead of the expiration of the agreement as talks continue.
“The current MOA is set to expire on March 31 and we continue to be hopeful that ALPA and WestJet can reach an agreement to mitigate any further impact to our pilot group as a result of the pandemic,” said WestJet spokesperson Morgan Bell. “While this work continues, in order to be contractually compliant, lay-off notices will be sent to the affected pilots.”
The number of pilots being let go wasn’t officially confirmed. However, according to a source who spoke to the Globe on condition of anonymity, the layoffs will impact 415 pilots, some with many as 10 to 11 years’ seniority.
$75-$95 billion in losses
This week, IATA posted its latest forecast, saying that airlines are not expected to be cash positive until 2022.
Estimates for cash burns in 2021 have ballooned to the $75 billion to $95 billion range from a previously anticipated $48 billion, IATA said in a statement on Feb. 24.
“With governments having tightening border restrictions, 2021 is shaping up to be a much tougher year than previously expected,” stated Alexandre de Juniac, IATA’s Director General and CEO. “Our best-case scenario sees airlines burning through $75 billion in cash this year. And it could be as bad as $95 billion.”
More emergency relief from governments will be needed, de Juniac added.
“A functioning airline industry can eventually energize the economic recovery from COVID-19. But that won’t happen if there are massive failures before the crisis ends,” he said. “If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable.”
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