Swoop Blacklist

[Realitychex]

Let’s just say it’s a hell of a lot more than what it’ll be for everyone if WJ abdicates it’s spot in the Cdn industry as the low cost leader.

I know what others are planning to pay their guys and it’s a quantum leap above that.

I ran it by a number of very senior guys I know who still fly the line.

It’s a good number.

[JBI]

Let’s just say it’s a hell of a lot more than what it’ll be for everyone if WJ abdicates it’s spot in the Cdn industry as the low cost leader.

I know what others are planning to pay their guys and it’s a quantum leap above that.

...

It’s a good number.

Hi Realitychex,

Thanks for your input on this matter. I'm curious about your thoughts with respect to the supply/demand of pilots now and for the next decade with respect to the launching of all these new ULCCs in Canada, whether it be Swoop or Jetlines or Flair or FlyToo.

While in the US, Spirit and Frontier (and to a lesser extent JetBlue, Allegiant and Virgin (before the merger)) are able to attract experienced pilots from the regionals because the pay and working conditions have, for now, been better than at the regionals but the flow programs in the US really have just started. With the increase of regional pay and the maturing of 'flow' programs, I get the sense that it is becoming slightly harder, but do note that JetBlue, Virgin and Allegiant already generally pay higher than WJ mainline rates.

In Canada, the main regionals already have a 'flow' program in place, so the ULCCs would have to offer significantly improved working conditions to attract experienced candidates. I can't see all that many 737 Captain qualified pilots leaving Encore, Jazz, Sky Regional or even Georgian to go fly a 737 for rates lower than the general industry standard. Will there be some pilots out there who would find it an attractive job - maybe, and I honestly don't judge them - there are many reasons for people to take different jobs (i.e. maybe a Skyregional Capt got the PFO from AC and they'd be eligible for a quick upgrade on the 737 which would pay a bit more money than they're currently getting at SKY). I just don't see the pool of experienced pilots as being all that big at the moment where multiple airlines can come in paying a lower standard of wages and fully crew their aircraft. It's one thing to budget a certain salary and cost structure, but as the regionals in the US are now finding out, if that doesn't attract enough experienced pilots, you have to make some changes to the cost structure.

Just curious what your thoughts are with respect to various proposed rates and the supply of experienced pilots. Do you think it is enough to attract enough experienced pilots?

Whether it be Swoop or any of the other ULCCs, these carriers still seem caught in the old way of thinking that pilots, experienced ones especially, are an added cost. In my humble opinion, the most successful airlines for the next decade, and the Canadian ULCC that will survive will be the one that compensates their pilots the best. While the key to success of the ULCCs is controlling costs, you still have to actually crew the aircraft. Maybe that's WJ upper management's plan all along, but the route that they are taking to get there is significantly eroding pilot trust in them.

It's certainly easy while sitting on my recliner and enjoying a Christmas Eve beverage to comment, but I can't help but think that upper management at WJ has made quite a miscalculation in trying to play hardball with Swoop rates instead of getting the pilots onboard on 4/20 when this whole venture was announced.

[saltypilot]

Let’s just say it’s a hell of a lot more than what it’ll be for everyone if WJ abdicates it’s spot in the Cdn industry as the low cost leader.

I know what others are planning to pay their guys and it’s a quantum leap above that.

I ran it by a number of very senior guys I know who still fly the line.

It’s a good number.

Well, let’s hear all about it. There truly is only one word that counts....Parity...anything short of that is not acceptable. If Swoop can only make $ by short changing the pilots (and any other working group for that matter) then this is a failed business plan.

[altiplano]

Out of the woodwork RC!
When the going gets tough, out come the big guns, glad to see you.

Allegiant is a successful ULCC.

They matched American Airlines Narrowbody Captain rates to keep experienced crews. These guys get paid more than the highest paid Widebody pilots in Canada to fly an MD80.

The airline still makes tons of money.

If I recall among the highest Operating Margins of ANY North American Airline. Do you have a recent scorecard?

Eroding pilot the pay isn't the secret to making money or making this venture successful...

[atphat]

But wait....it's a GOOD number! LOL

[Bede]

Hey RealtyChex,

Thanks for your insight on this forum. I am curious though, about your statement that the ULCC segment is ripe for the picking in Canada. If this was true, why have the only companies that have tried this model failed? Why can't those with an "excellent" track record (ie Tim Morgan) secure sufficient investment to get their idea off the ground?

I'll leave it to the bean counters to tell me if there's a business case for it but the way I see it, there is very little to trim off to get the CASM down much further (other than more seats). Everything else will cost pretty much the same.

The way I see it, if the smart money thought that there was a business case for it, Enerjet, Jetlines, Flair would be off to the races by now.

[Mostly Harmless]

I'm not a member and not going to be a member. It's not my thing.

I might be mistaken here but, if you are not a member does that mean you will not be able to vote upon a contract when one is finally presented to the working group? No vote, no say in the outcome.

Is the analysis accurate? Given that WJ wouldn’t exist today without the analysis that I did way back when, and that the WJ analysis went on to be the basis of the analysis of what became JetBlue and a couple of other airlines now flying today, I wouldn’t ignore it.

A business case WJ is no longer using. Why is that? Why did they move the company so far away from it's original and successful model that they feel the need to reboot the whole thing by starting a new carrier? I honestly don't know but it sounds like the sort of thing you might understand. I was very attracted to the model of management and compensation at WJ. One where all parties were tied to the success or lack thereof, where everyone was on the same team and were rewarded with the successes of the company. But that's not the way it works anymore. Why change something that worked to something that they feel doesn't work? Those choices were made at the top by the executive and not by the pilots or a union that was not on property at the time.

If you saw the Cdn specific ULCC analysis, I think the posturing would end pretty quickly and a deal that everyone could live with would get done.

That's part of the problem, the pilots haven't seen the analysis. The company has not talked to the pilots about anything. The pilots found out about Swoop when it was announced in the press... same way everything else the pilots have heard about Swoop and several other initiatives. The executive stopped talking to the pilots long before the union drive. I would posit that the union is a reaction the executive cutting the pilots out of the process and people feeling like they need some form of protection that they never felt the need for previously. It is nice that they are talking to you and giving you data to look at, perhaps they should try that with the pilots.

I don't want to see someone flying the same equipment I am flying, on many of the same routes, and being paid approximately 35% less than me to do the same job. That person will be making less than a current 703/704 pilot, less than a current FO at WJ, should that come to pass.... to be captain on an airliner. That is a danger to my compensation. That is a danger to the compensation of every pilot regardless of where they work.

I have never seen an executive undercutting market wages by 35% to captain a business.

The pilot shortage that has existed around the world for the last 20+ years has finally arrived in Canada and the landscape isn't what it used to be in terms of labour. I know the executives of Canadian aviation have had it really good for 30+ years and they are having a really difficult time adjusting the new reality of market forces but, I question where all these potential high skilled/low wage employees are to be found.

[Mr. North]

I question where all these potential high skilled/low wage employees are to be found.

Good question. There are not enough pilots graduating from colleges to fill the hiring requirements for 2018, nevermind the years beyond. I don't think WJ management realizes the importance of getting this right the first time. The flow to AC is about to be ramped up starting next month and those who leave aren't coming back. WJ should be doing everything it can to keep pilots from leaving, the idea that they can afford to train and replace is not going to be viable for much longer.

[pacman007]

Does anyone honestly think this Blacklist will work? I hope it does! Management will take a wait and see approach. If they get the resumes at swoop then they won't care one bit! Remember pilot hours and experience don't mean anything anymore to management!

[BE20 Driver]

Good question. There are not enough pilots graduating from colleges to fill the hiring requirements for 2018, nevermind the years beyond. I don't think WJ management realizes the importance of getting this right the first time. The flow to AC is about to be ramped up starting next month and those who leave aren't coming back. WJ should be doing everything it can to keep pilots from leaving, the idea that they can afford to train and replace is not going to be viable for much longer.

Swoop is launching with only 2 airplanes. That's 20 captains. I would bet that there are 20 people out there working at Flair, WestWind (ATR captains), Georgian RJ Captains, etc that would have enough time to qualify as a captain. They'll add aircraft much slower than Encore ever did and are only growing to 10 tails (per the current plan). Hell, I'd bet Georgian alone could probably supply all of the crews required and no matter what pay scale we launch with, it'll probably be a raise for them. There are likely 100 people across Canada that want some 737 PIC time so that they can go to China.

Unfortunately, I don't see this hiring ban working like we want but I can't come up with a better solution that would encourage higher wages at Swoop.

[atphat]

It won’t work.

[pacman007]

Well if this doesn't work being a pilot is officially a job not a profession!!

[pacman007]

Well if this doesn't work being a pilot is officially a job not a profession!!

[piggy]

Jazz lost the fight for common employer status with mainline after years of court . This was because it was deemed not similar work based on a/c size and routes. As swoop will be the same a/c if I’d say common employer would be obvious to all involved. But alpa wants a hiring ban which means they are ignoring past history? Do it now and fight in court later?

In addition, why would you piss off your most valuable employee group when you want everything to be successful and there is a shortage of qualified pilots. Make no mistake, the pressure is on management to make this work-the market are very worried about execution risk with so many ventures occurring simultaneously . WestJet is no longer a”discount carrier” and is evolving into a full service airline. It makes sense to me to start up a ultra lost cost airline because WestJet is becoming a air canada, and there is a demand for a low cost airline.

What I found surprising was the management did not have the foresight to hang a carrot for encore pilots to flow to mainline on the initial set up of encore. Even though there was a shortage of pilots. It was the WestJet pilot group that insisted on it. Are they forward thinking this time around with swoop . ?

[bobcaygeon]

It very likely won't work because pilot's are generally whores but if you do nothing at all the you can't really bitch either right??

TG

[FL007]

Good question. There are not enough pilots graduating from colleges to fill the hiring requirements for 2018, nevermind the years beyond. I don't think WJ management realizes the importance of getting this right the first time. The flow to AC is about to be ramped up starting next month and those who leave aren't coming back. WJ should be doing everything it can to keep pilots from leaving, the idea that they can afford to train and replace is not going to be viable for much longer.

Swoop is launching with only 2 airplanes. That's 20 captains. I would bet that there are 20 people out there working at Flair, WestWind (ATR captains), Georgian RJ Captains, etc that would have enough time to qualify as a captain. They'll add aircraft much slower than Encore ever did and are only growing to 10 tails (per the current plan). Hell, I'd bet Georgian alone could probably supply all of the crews required and no matter what pay scale we launch with, it'll probably be a raise for them. There are likely 100 people across Canada that want some 737 PIC time so that they can go to China.

Unfortunately, I don't see this hiring ban working like we want but I can't come up with a better solution that would encourage higher wages at Swoop.

I agree, there are plenty of pilots I know that would eat their first born son to further their career, even slightly. It would set a precedent though in the industry to have pilots worth their weight banning the idea of lowering the bar in this industry. Keep Swoop isolated to the bottom feeders of this industry, if AC bans hiring from there at ACPA's request, Westjet threatens BOTL, then they'll be there for life, where they belong, making less than everyone else who wanted to improve the WAWCON for everyone.

[TheStig]

JBI, thanks for the insight, your legal expertise makes you a fairly unique contributor to this forum. A well balanced insiders viewpoint is always welcome into the conversation.

I can't help but think that WJ and WJe pilots unionized just in time. I really hope that all of what we're hearing about a blacklist is the result of posturing between ALPA and WJ management. However, I find it unbelievable that things have reached that point. From the other side of the fence, for such a long time, I used to gaze with envy at the high regard WJ held its pilots with and how closely the two groups worked together and would never air their dirty laundry in this fashion. I know I'm biased towards the pilots side, but its hard not to look towards the current CEO as being responsible for the direction that things have gone.

[URC]

You need to beat them at their own game. Get a majority of the pilots to put a massive short on the company stock, then all sell their ESP and resign "en masse". Then using the ESP and short money start a completely pilot owned airline to take the market share WestJet had to give up when most of their pilots quit overnight. Hire RealityChex to run it (payback for CB). Can you run some numbers on that scenario RC ?

[CaptainHaddock]

Didn’t’t GGN just certify with ALPA, if you just certified to improve your working conditions why would you then leave there to go to an ALPA blacklisted airline?
Swoop is supposed to start revenue flights the end of June, so whatever managements plan is they will have to act on it soon. According to the analyst podcast, there will be more than just 2, 10 by the end of 2018, 2-2 1/2 year old 800’s from WestJet mainline. That’s at least 200 line Pilots, if they are going outside that would make the current lack of hiring for mainline understandable. so whatever is going to unfold it will be relatively soon.
I wonder if that 35% cost savings Management is after is a real cost savings when you factor in all the variables? If Swoop is a stepping stone to overseas you have higher training costs, lower experience levels will add to that too. And you’ve successfully completed the process of ailienating the mainline pilots from management. It seems very divisive and short sighted to me, but what do I know? I’m just a pilot.

[North Shore]

Has anyone ever been inside the offices at Swoop? Could it all be a Potemkin Village designed to extract concessions out of the pilot group(s) in contract negotiations? Pretty easy to set up an office and go through the motions of starting up an airline, never intending to do so; if they extract $10M (say) in labour costs out of the cntract over the next 5 years, while only spending $2 or $3 on the 'startup', that's a huge bonus...