Canada's WestJet Airlines said on Friday it would reduce capacity, impacting the jobs of about 1,000 employees, as the carrier faces volatile demand due to mounting government restrictions to curb the spread of the novel coronavirus.

Privately-held WestJet, the country's second-largest carrier, announced further cuts to its schedule, introduced a hiring freeze, and said the equivalent of 1,000 employees would be impacted through a combination of furloughs, temporary layoffs, unpaid leaves and reduced hours.

WestJet's announcement follows new Canadian rules that passengers would need to test negative for the coronavirus before boarding a plane bound for Canada, starting on Jan. 7.

"Immediately following the federal government's inbound testing announcement on Dec. 31, and with the continuation of the 14-day quarantine, we saw significant reductions in new bookings and unprecedented cancellations," Ed Sims, WestJet president and CEO said in a statement.

Global airlines have been calling for COVID-19 testing as a way to ease travel restrictions and reopen borders without crippling quarantine measures, but Canada still requires passengers who have traveled abroad to self-isolate for 14 days.

News of the surprise Canadian measure left airlines fearful of possible confusion over which testing facilities abroad were eligible and how the results from the PCR (polymerase chain reaction) test must be presented to carriers.

WestJet on Thursday said it had to deny 10 passengers from boarding one flight for lacking the proper test for the novel coronavirus, just after the requirement that passengers show proof of a negative result before boarding took effect.