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Varcoe: ’A scandalous and extraordinary situation’ — a year into pandemic, airlines still waiting for federal aid

ALPA calculates it's been 364 days, as of Wednesday, since former finance minister Bill Morneau indicated an industry aid package was coming

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After more than a decade of flying for WestJet, pilot Tim Perry will be laid off on April 1, along with more than 400 of his colleagues.

In the aftermath, he expects to eventually land a job at the company’s regional airline, WestJet Encore.

The layoffs of 415 pilots next month are the latest in a series of painful cuts at the Calgary-based carrier and across the Canadian airline industry.

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It’s been one year since the Trudeau government vowed it would provide support for a sector battered by the COVID-19 pandemic.

Yet, an industry-specific plan still hasn’t landed — and anger in the industry is boiling.

“There is a lot of hardship that is being created unnecessarily,” said Perry, who is president of the Air Line Pilots Association (ALPA) Canada.

“The layoffs do continue and this is a direct result of federal support that has been non-existent.”

The job losses extend to other occupations, carriers and related companies that rely on the beleaguered air-travel business, and the industry has faced unprecedented public health restrictions and changing government rules because of the pandemic.

Air Canada reports its workforce was reduced last year by about 20,000, or more than half of its pre-pandemic levels.

Before the global pandemic, WestJet had more than 14,000 staff. Today, it has 4,900 active employees. Another 5,000 workers have been furloughed and more than 4,000 people have permanently left the company.

A year into the crisis, where the heck is Ottawa’s aid plan?

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“I don’t use the word scandalous lightly, but it is a scandalous and extraordinary situation,” WestJet CEO Ed Sims told an online panel held by aviation organization Eurocontrol earlier this month.

“During the course of the decision of the government not to provide funding for our ourselves or (Air Canada), we’ve lost 23 per cent market share to international carriers. And I think that is disgraceful.”

WestJet Boeing 737 aircraft are seen in storage at the Calgary International Airport on Tuesday, March 23, 2021.
WestJet Boeing 737 aircraft are seen in storage at the Calgary International Airport on Tuesday, March 23, 2021. Photo by Gavin Young/Postmedia

From the union’s perspective, the situation is a source of deep frustration. ALPA calculates it’s been 364 days, as of Wednesday, since former finance minister Bill Morneau indicated an industry aid package was coming.

I’ve heard of lengthy flight delays, but what exactly are they waiting for?

More importantly, how much permanent damage has the year-long wait caused, while other countries have brought out their own airline assistance packages?

It’s not like the need isn’t apparent.

Statistics Canada reports air travel in December was off 87 per cent from a year earlier due to border travel restrictions and quarantines.

These problems are obviously not just a Canadian phenomenon. The International Air Transport Association, which represents 290 of the world’s airlines, reported global passenger traffic fell by two-thirds last year compared to 2019 levels.

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But the issue is how the federal government is responding to the crisis (in slow-motion) and setting up the sector — and those that depend on it, such as Canada’s tourism industry — for recovery once the pandemic fades and more travel is allowed.

“We need a clear line of support for the airline industry (to allow) other pieces of the economy to turn back on,” said Darren Reeder with the Tourism Industry Association of Alberta.

David Rheault, Air Canada’s managing director of government affairs, told a House of Commons Transportation Committee meeting last month that governments around the world have provided the equivalent of more than $200 billion to their carriers.

(Germany made a US$9.8-billion direct investment into Lufthansa last May. The U.S. government earmarked $48 billion in airline bailout assistance as of late February, according to the Financial Times.)

North of the border, Air Canada has been burning through around $15 million a day.

Canada must adopt an industry-specific program to help airlines through the crisis, Rheault told MPs.

The federal government points out it has provided more than $1.7 billion to the sector through the Canada Emergency Wage Subsidy, a program that’s available to other sectors.

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As for an airline-specific package, that appears to be a work in progress.

“We are fully seized with the issue of how hard every aspect of the air sector has been hit and we are committed to providing assistance to the sector,” Allison St-Jean, spokeswoman for federal Transport Minister Omar Alghabra, said in a statement.

WestJet Boeing 737 aircraft are seen in storage at the Calgary International Airport on Tuesday, March 23, 2021.
WestJet Boeing 737 aircraft are seen in storage at the Calgary International Airport on Tuesday, March 23, 2021. Photo by Gavin Young/Postmedia

While discussions between the various sides are still going on, unions representing front-line airline employees are fed up with the delays and have begun to turn up the heat.

Last fall, the Air Canada Pilots Association, ALPA and Unifor asked Ottawa to provide airlines low-interest loans of $7 billion, including loan guarantees and direct financial assistance.

Ottawa has pressed the industry to provide refunds to customers for cancelled flights due to the pandemic, which is appropriate, and to reinstate regional service into areas that have been cut, which seems more like government micro-management.

The federal government has to protect the public purse and safely manage a relaunch of air travel in the future. But it also needs to ensure the Canadian industry is able to thrive once more flights are able to take off, rather than set up foreign carriers to grab market share.

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“We are facing absolutely unique circumstances,” Stephen Jones, CEO of Edmonton-based Flair Airlines, said in an interview.

“Allowing the full collapse of the industry would be a disaster, not only for the market in airlines but also for the industries and infrastructure of the country generally . . . It is appropriate for the government to play a role here.”

For the 415 WestJet pilots who’ve received layoff notices, a federal aid program will likely come too late to save their jobs.

Perry hopes talks between the airlines and government will finally lead to a sector-specific initiative coming from Ottawa, although at this point, he has little faith.

“Their announcements mean very little right now,” he added. “The only thing that would be meaningful would be some action.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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