Everyday at WJ : union busting

[Flyingsquirrelsuck]

I don't disagree that this segment of the market needs to be protected, but the landscape has changed and WestJet management needs to realize that they don't have carte blanche to do what they please anymore.

They are obliged to actually negotiate with the WestJet pilots through ALPA and so far they have displayed nothing but contempt for the process. Everything they have done since conciliation was announced has been an attempt to circumvent the legitimate good faith bargaining process and force their agenda. They were not available to negotiate for the first 3 and half weeks of the 60 day conciliation period but now they want an extension after wasting almost half the time. They are trying to regain control of a timeline that they have lost control over. The recently departed CEO stated publicly that he didn't see a new pilot CBA being settled in 2018 and their antics up to now have reinforced that premise

This can be resolved, but WestJet pilots will not stand by and watch their career aspirations dissolve and allow another JetStar fiasco occur just to line the pockets of a select few. Swoop was originally 3-4 aircraft, then it was 10 and then 30-40 aircraft. GS also stated many times publicly that he loved the JetStar model. The bottom line is that many of us don't trust this management team to do anything but line their own pockets. When 50%+ of their compensation is performance-based there is a very great incentive to meet or exceed those targets. This creates the ultimate conflict of interest, by cutting the compensation of others you get to increase your own and greed is a very base emotion.

Reality if someone of your calibre was involved it may lend some credibility to the venture, but unlike the 4 individuals who started WJ these MBAs running the place now don't have an entrepreneurial bone in their bodies and are just focused on cutting costs at all costs to the detriment of everything else.

You of all people know that the airline within an airline model is doomed to failure. I am sure a search would reveal your past thoughts on this when Zip, Tango, Ted, Song, and all their brethren were announced and subsequently failed. Swoop can be accomplished by the proper marketing of the recently announced "Economy Lowest" fare bucket without the need to double up on the infrastructure and slash the pilot's wage. This is about resetting pilot costs at WestJet that we have been lead to believe are responsible for the cost creep over the last number of years. A proper look at the numbers (which I am sure you could get access to) would show that pilot costs are not the problem at WestJet, we are a relatively small 6% of revenues compared to 10-15% for other pilot groups. The real cause of the cost creep IMHO is the almost legacy costs elsewhere in the operation. Pilots are just an easy target and we have had enough of the death by 1000 cuts.

This management team has managed to take one of the most rabidly loyal pilot groups on the planet and piss them off to the point that labour action is distinctly possible in the near future, it takes a special kind of greed and betrayal of trust to accomplish that. So instead of pointing fingers at ALPA and the WestJet pilots to fix this mess, you should be pointing them at the executive floor.

Great post. Spot on

[Flyingsquirrelsuck]

One thing I don't understand is why a highly profitable airline needs to pay only the pilots less to be viable. Mechanics, management, etc. all get the normal rates. It's mighty suspicious too that it's all timed with the union drive, certification and contract negotiations. Smells a lot like union busting.

The exact dates and times aren't relevant, everybody was hearing the same rumours and knew what was happening on both sides.

The difference in fuel burn between a 737 classic vs NG should negate any difference in pilot WAWCON. WJ already has more efficient, reliable airplanes, economies of scale and operational network to push out a small competitor. Is paying the pilots less as well really make-or-break for Swoop? I really doubt it.

What happens when Flair or another ULCC takes advantage of the traction the ALPA intransigence is causing, finds some serious investors and uses the funds to acquire NG's or MAX aircraft in 189 seat configuration? Are you so naive as to think that isn't already being shopped to investors North America wide?

These guys spend 100% of their time trying to destroy the company you work for and issues your pay cheques. Nothing would make them happier than to see WJ turn into another Canadian. WJ ALPA leaders need to recognize this very, very quickly and come to an agreement that ensures above and beyond anything else, that the future of WJ ALPA pilots is secure, then worry about ALPA pilots at other airlines who's management would LOVE to see WJ collapse under its own weight.

I've been intimately involved in three North American LCC start ups, that today, operate a total of about 500 aircraft, with hundreds more on order. Be very thankful I'm not particularly interested in being involved in a 4th because I've already done the modeling, on exactly the same basis as the other 3 that all turned out quite well and know precisely how to put a CDN ULCC together and make a ton of money in doing so. Thank your lucky stars no one else has figured it out, yet, but eventually, they will. I guarantee it.

Everyone from top to bottom at WJ is in this fight together, be it now, or in the future. It's a war that you must win. Lose it and you'll have much, much more serious problems to have to sort out.

Shut that back door now.

Unfortunately your review of what’s happening at WJ is completely off the mark.

[Mostly Harmless]

Everyone at WS is in the same boat from top to bottom.

Were this true, WestJet would not have a union today nor would they have several more knocking on their door. Your statement is factually incorrect. The executive launched their own boat about 7 or 8 years ago, then bought a hand drill and started putting holes in the boat everyone else is in. You can tell they are not "Leaders" because they are not leading with 45% pay cuts for the Board of Directors, the CEO nor any of the EVP's. If everyone were in the "same boat" it would not be just the pilots and flight attendants who are expected to do the same work for 45% less money. You are looking down from a very high precipice and it is giving you a very distorted view of the company as it exists today rather than when you were working there. The give and take is now just take from the top down. Here's a question for you, if you dare to answer it, how much has executive compensation increased in the last 8 years compared to pilot wages? I've asked you questions like this before and you never answer.

I've been intimately involved in three North American LCC start ups, that today, operate a total of about 500 aircraft, with hundreds more on order. Be very thankful I'm not particularly interested in being involved in a 4th because I've already done the modeling, on exactly the same basis as the other 3 that all turned out quite well and know precisely how to put a CDN ULCC together and make a ton of money in doing so. Thank your lucky stars no one else has figured it out, yet, but eventually, they will. I guarantee it.

Do you seriously think you are just that much smarter than everyone else that no one has looked at this? A lot of people have looked. Smart people. People with the resources to do the job. They've all walked away. Why is that? Where is all this massive foreign investment? The rules have been altered for over a year now with no takers. Are they seeing something you are not? Why don't you start up number 4 and make yourself a lot of money if it is so easily done? I'm not saying you are wrong but I am questioning your message. If the market were that ripe, and that easy, then someone would be there filling that need now. They are all struggling.

I don't disagree that this segment of the market needs to be protected, but the landscape has changed and WestJet management needs to realize that they don't have carte blanche to do what they please anymore.

The bottom line is that many of us don't trust this management team to do anything but line their own pockets. When 50%+ of their compensation is performance-based there is a very great incentive to meet or exceed those targets. This creates the ultimate conflict of interest, by cutting the compensation of others you get to increase your own and greed is a very base emotion.

This is about resetting pilot costs at WestJet that we have been lead to believe are responsible for the cost creep over the last number of years. A proper look at the numbers (which I am sure you could get access to) would show that pilot costs are not the problem at WestJet, we are a relatively small 6% of revenues compared to 10-15% for other pilot groups. The real cause of the cost creep IMHO is the almost legacy costs elsewhere in the operation. Pilots are just an easy target and we have had enough of the death by 1000 cuts.

This management team has managed to take one of the most rabidly loyal pilot groups on the planet and piss them off to the point that labour action is distinctly possible in the near future, it takes a special kind of greed and betrayal of trust to accomplish that. So instead of pointing fingers at ALPA and the WestJet pilots to fix this mess, you should be pointing them at the executive floor.

This is a very important point. All of it. It is what the executive should be looking at and paying attention to right now, not Flair. Get all the executive and workers back on the same boat so we can pull in the same direction. To use the earlier stated analogy of a war, you need all your troops fighting as one to beat the enemy. But cohesion is not the focus of the executive, it's actually division. So how am I supposed to take the message of the evil enemy from without seriously when I am busy fighting for survival against the people who are supposed to be on my side?

We talk a lot about how much pilots cost the company as a percentage of operating costs, what do all those executes cost us as a percentage of operating costs? Does anyone know? Anyone want to figure that one out? I would be shocked if it was less than 6%.

[flyer 1492]

Realitychex is just a shill for the remaining founding member.

[aerobod]

We talk a lot about how much pilots cost the company as a percentage of operating costs, what do all those executes cost us as a percentage of operating costs? Does anyone know? Anyone want to figure that one out? I would be shocked if it was less than 6%.

The senior leadership team at WestJet comprises very close to 100 people, these are Directors, VPs, EVPs & the CEO. The Director band salaries are published on WestNet, the compensation for the Executive is in the annual report. On-target Director compensation is less than the top paid pilots, yet 60 hour weeks are the norm with expected availability of 24x7 (including checking in when on vacation). Of the 100 senior leadership, 70% are Directors. Total compensation cost (of which salary is only about 50% for the whole group) is less than 1% of operating costs.

[Mostly Harmless]

The senior leadership team at WestJet comprises very close to 100 people, these are Directors, VPs, EVPs & the CEO. The Director band salaries are published on WestNet, the compensation for the Executive is in the annual report. On-target Director compensation is less than the top paid pilots, yet 60 hour weeks are the norm with expected availability of 24x7 (including checking in when on vacation). Of the 100 senior leadership, 70% are Directors. Total compensation cost (of which salary is only about 50% for the whole group) is less than 1% of operating costs.

Thanks. I'll take your numbers as a given. So, we have roughly 100 people taking 1% and roughly 2000 people taking 6%.

[pigboat]

Isn't that interesting. 100 management get 1% and.......... 2000+ pilots share 2%. I very much doubt that the math is anywhere near six percent to the pilots. Pilots working for CHEAP does not make ONE days difference in the Company keeping the doors open! If you AGREE to work for less......Bigger and Better Bonus for the 100. !!!!!!!!!!!!!!!!!

[The Raven]

Mostly Harmless and FL410AV8R,
Spot on posts.

Realitychex, I assume you are Tim Morgan but may be wrong. Your posts read like Tim. I see some of your points, but you must realize the company has eviscerated it’s most loyal group of employees. How do we recover from that? What is our only logical recourse?

Grant.

I don't think he's Tim Morgan. I believe he is another former Westjet VP though.

[dialdriver]

Maybe he doesn't work for WestJet now, but he used to.

Realitychex=Mark Hill

[Red1]

I'm sorry but I don't believe a separate entity in the form of Swoop is needed.. its a dumb move, and a distraction at best. Within six months time WestJet is about to launch its most expensive and potentially lucrative venture yet as it moves towards its wide-body expansion. If not properly executed it could blow away WestJet's stellar balance sheet before you can stay "cookies or pretzels". Yet here the company is so dammed determined to be the next best ULCC its willing to battle its employees especially its pilots over a few crumbs.

Lets look at the Canadian market place: New leaf started and was sold to Flair, who owned there airplanes and changed the airline to Flair. Jim Scott the former CEO of Jetlines, becomes the new CEO of Flair and is joined by Jerry Presley who represents the money behind the deal. They have already began to change the business model to become a "premium ULCC".. what's that? They have recently announced a premium economy class.. sounds like someone else We know. Plus the aircraft are still owned by Flight Craft.

http://www.travelweek.ca/news/new-ceo-n ... -airlines/

Canada Jetlines is trying to raise money on the TSXV.. enough said, might as well play Vegas, same odds more fun.

Lastly and more importantly is FlyToo aka Enerjet and the rumors that the Indigo Group was looking to invest with them. The Indigo Partners is a huge threat ( they have interests in Frontier, JetSMART, Volaris, and WIZZ air) . They announced a purchase of 430 Airbus Neo's at the Paris Airshow. If they wanted to throw ten of those aircraft into the Canadian Market they could do so in a blink of an eye by teaming up with Enerjet. But they haven't, maybe its regulatory, maybe they can't broker a deal, or maybe they see other areas to make more money.

http://www.airbus.com/newsroom/press-re ... order.html

Is there a marketplace for a ULCC, sure.. does it need a separate airline no. Like almost every other major airline in the sates WestJet has recently announced a basic Economy fair. Which is a no frills fair that simply offers you a seat and yes free pretzels and cookies. But instead of a fighting brand you have a fighting fair. You can simply segment the fairs depending on the market and the competition. Yes your CASM will be higher than that of a true ULCC, but so will your RASM (if segmented properly). Plus there is, I believe, a greater chance of ancillary revenue as people move up the value chain from basic economy, all the way up to plus.

With so many initiatives on the go, why even bother with Swoop. Focus on the wide-body and the growing the business market. Offer a Swoop fair, and be done with it.

[Greenbastard]

Realitychex, I have to disagree with most of your post. The reality is you are only interested in your WJ stock value, not actually in the company’s employees. But I will give you this, you seem to be an expert on back doors.

BTW I liked you better as the Bean on that other, more professional forum. Not down here in the swamp!

[WeedPro2000]

Realitychex, I have to disagree with most of your post. The reality is you are only interested in your WJ stock value, not actually in the company’s employees. But I will give you this, you seem to be an expert on back doors.

BTW I liked you better as the Bean on that other, more professional forum. Not down here in the swamp!

Oh c’mon JL. I think MH gets a little more respect regarding setting up airlines than you or I. No need for the potshot at him, I thought Nova Scotian’s were nice than that!

[goingnowherefast]

Everyone from top to bottom at WJ is in this fight together, be it now, or in the future. It's a war that you must win. Lose it and you'll have much, much more serious problems to have to sort out.

If this were true then everybody should be taking the same pay cut, especially management and not just the pilots. Once the leaders lead by example it will have more credibility. Until then, I'll call it union busting.

[TheStig]

I've been intimately involved in three North American LCC start ups, that today, operate a total of about 500 aircraft, with hundreds more on order. Be very thankful I'm not particularly interested in being involved in a 4th because I've already done the modeling, on exactly the same basis as the other 3 that all turned out quite well and know precisely how to put a CDN ULCC together and make a ton of money in doing so. Thank your lucky stars no one else has figured it out, yet, but eventually, they will. I guarantee it.

Realitychex I've just received an email I'll Fwd to you from a Nigerian Prince looking to share his fortune, trust me you don't want to miss out on this AMAZING opportunity, hurry before someone else figures it out!

[FenceSitter]

Maybe he doesn't work for WestJet now, but he used to.

Realitychex=Mark Hill

I remember being beside MH on a 737-200 a few times traveling out to YYJ in 2001 and 2002. I literally saw the powerpoint printed slides of the competition's information that WJ would soon be accused of, and ultimately guilty of, stealing from that same competition. To then see them vehement denials from every level right up to CB knowing what I had seen left me with eyes wide open.

"This practice was undertaken with the knowledge and direction of the highest management levels of WestJet and was not halted until discovered by Air Canada,"the two companies said in a statement.

"This conduct was both unethical and unacceptable and WestJet accepts full responsibility for such misconduct."

http://www.cbc.ca/news/business/air-can ... t-1.589059

MH is as near to a genius as is likely any member of this forum in my opinion. Without his understanding and foresight WJ would have had a rough landing soon after liftoff. I won't even pretend to understand the business side of things as well as him. I would, however, question why only the employees need to give when the executives only need to take.
That said, it got to a certain point that dishonorable and arguably illegal activity is what it took to maintain the levels of growth in the early days. The man at the top is still there. The same man who denied to the faces of his employees in that small lunch room that anyone at WJ had done anything wrong. "We did not spy on Air Canada!!" is a direct quote from him. A leopard never changes it's spots.
WJ will have a strike and then a contract imposed upon them due to the obstinance and complete disassociation that exists from the top down. ALPA is not responsible for the coming work action, This falls directly on CB, GS, and corporate WJ as a whole.

[yyc757]

Reality,

I have no doubt you are a master of CASM, RASM, trip cost, city pairs, high A/C utilization etc. Hats off to you and further I respect your strengths.

All these things are irrelevant if the airline isn't flying.

Off the street hiring of Swoop pilots is a BETRAYAL to loyal, hardworking WJ pilots who would love to go to battle in order to attack the rear flank.

No general ever betrayed his troops then said go to battle.

Until the loaded gun (the ground school of OTS pilots that are going to fly WJ aircraft) pointed at our heads is removed we cannot move forward and address our competition.

CB put down your loaded gun.

Also Reality, stop your fear mongering. We don't own DC10s. We haven't bought a highly levered company on death's door. We aren't flying a bunch of clapped out 200s and F-28s. And we aren't being milked of all our profits to an American shareholder charging an arm and a leg for "services".

Now you can talk pilot costs all day long but it's a shell game when an airline within an airline is considered. We all know the true motive is whipsaw. Doy! The only costs that matter are the year end costs. Not the costs on one particular flight or series of flights. So. ONE pilot list. ONE pay scale. ONE set of working conditions. ONE set of benefits. For ONE aircraft type. That is owned by ONE company. (Now called WestJet Group.)

By the way using your logic for taking pay cuts Reality, the Company must look at each route and question whether a year one Captain and year one FO are flying the route or a year 12 captain and year 10 FO. (This appears to be your logic when discussing Swoop pilot costs) Which crew demographic was used for our recent Denver addition? That makes no sense! !! Obviously any route is looked at with an aggregate cost.

Finally, the real risk (besides letting Flair grow because we have a gun pointed at our head resulting in a strike so the gun will be put away) is losing hundreds of pilots to AC and the resulting cancelation of thousands of flights and secondary result of a crash in forward bookings due to the constant media barrage covering the Father who could walk his daughter down to isle... the grandma who missed her grandson's graduation... the father who missed the birth of his son... oh the CBC will be busy and the bookings will be crashing. ... so then the RASM will plummet because the only way to get people to book will be lower fares. And THAT WILL NOT BE GOOD FOR SHARE PRICE. So in fact what really needs to be discussed is pilot retention. Well unless that's why CB was in YUL... to ask AC not to hire us? Or was it to speak to a politician?

Put the gun down. Treat your loyal, hardworking professional pilots properly. There is no culture without trust.

[tbaylx]

An imposed contract may not be as palatable to WestJet pilots as a negotiated one. Careful what you wish for

[Transonic]

An imposed contract may not be as palatable to WestJet pilots as a negotiated one. Careful what you wish for

It's more than worth the risk to strong arm Swoop flying before the first Swoop pilot operates the first Swoop flight. We need to have this wrapped up before early June and will.

[Realitychex]

Realitychex is just a shill for the remaining founding member.

You can rest assured that although 3 of the four founders chat fairly regularly, there has been no dialog beyond pleasantries between those three and the other in a very, very long time. Unfortunately, I don't anticipate that changing anytime soon.

And let's be very clear. I am on the record as very much preferring Swoop flying being handled by WJ pilots.

Everyone involved with Swoop needs to get their head around what needs to be done, and the significant risks of not getting it done in a very timely and aggressive manner. Pilots, in flight, maintenance, back office, Everyone.

Airlines within airlines in the past have been very stupidly conceived. I've said for years that, if done correctly, it can work. No one's ever done it correctly. Thus far, Swoop is on the right path. There are all kinds of examples that illustrate this that I've shared with numerous skeptics over the past while in professional circumstances and will be doing so again in Toronto later this week to a room full of investors and fund managers.

Everyone has their opinions of management, as do I. Anyone who knows me knows I do not suffer fools particularly well.

That being said, management is now running a vastly more complex business than was the case almost 15 years ago when I was there. One can quibble about compensation issues, but I'll guarantee they would be unable to recruit anyone of any caliber paying them anything close to what the comp levels were in 2003, (in the mid $200k range as I recall).

Yes, the 737-Max is a more complex machine than the -200, as is the 767 and as will be the 787. I don't know the details, but pay rates have significantly changed over the years. I suspect the 767 and 787 rates are and will be higher still to compensate for capacity and the lifestyle changes resulting from long haul operations.

But also keep in mind that the complexity and responsibilities of running an organization with 13,000 people, 150 aircraft (with 3 aircraft types), and annual revenues of around $4b is quite different than 15 years ago when WJ had 44 aircraft operating largely domestically, 3,400 employees and revenues of about $860m.

In other words, and without wanting to sound contrite, the job of flying a 737 around North America hasn't changed much. It carries the same level of technical expertise and responsibility as it always has had. The job of airline management, ALL airline management, has dramatically changed over the years. I'd bet they'd love to run a 44 tail aircraft fleet and have to deal with just 3,400 people. But that's not how it works in the real world.

The job is infinitely more complex and stressful, and has to be compensated as such, whether you or I like it or not.

If you don't think that amounts to much, take a look at the pics of WJ senior execs in 1996 and again 5 years later. We all looked like we'd aged 15 years. And that was running, in hindsight, a business a fraction as complex as what's been done today.

If you'd like to earn senior executive money, and take senior executive responsibility, I'm sure the door is open.

In the meantime, be very cautious about the relative merits of winning battles and losing wars. What's the point of winning, and then being out of work in a few years time?

[atphat]

Fear fear fear. Accept concessions. Your job is in danger. Fear fear fear. Work more. For less.