They were going to lock everyone out and shut the doors?

[altiplano]

Doesn't change the fact that they could densifying the airplanes, paint a new logo, build a new website, and still give the flying to their pilots.

The business model is what defends the market in your example, it doesn't matter who's driving.

So the fact that they are able to create division and distract the pilot group is a bonus for management in this plan... Swoop wasn't created to screw the pilots, but the purpose of substandard wages and crewing it from outside was to screw the pilots.

Yes distraction is a important component of any safe flight operation department.

Do you deny that all the focus placed on fixing the swoop problem has distracted your group from maximizing gains in other areas? So much effort put into securing a win just in defending your scope...

[av8r374]

I’ll stop you there, because this is not true. This is what management has said they are going to do, but the facts suggest otherwise, and even the investors are pissed - listen to the last call from May 8.
Swoop is starting with 6 routes. Out of those 6 routs, 50% completely cannabilize WestJet flying. As in, you can NO longer purchase a ticket from WJ to fly YEG-YXX, YEG- YHM, YHM-YHZ.
That’s definitely not attracting new business or going after new air travellers or competing with people that take buses. That’s cannibalizing your own flying on routes where people fly point to point. They are forcing Swoop to be successful because you won’t even be able to purchase a ticket on WestJet anymore. This is going to be a big airline - and if they can’t even find 6 routes to be successful, without cannibalizing WestJet flying, then it’s clearly not a good business model, as you described. It’s a replacement airline for domestic WJ flying.

Rezy, let me start by saying I do not agree with a lot of things happening at WJA.

However, I feel compelled to throw out a different perspective on this "cannibalization". It is entirely possible that WJA only ever operated these routes to occupy gates and slots that could otherwise be utilized by ULCCs trying to break in to the market. It is possible that they make little (in anything at all) on these routes but utilize them to stave off the competition.

Now if they start a company that can sit there and occupy these gates/slots, also compete with fares, utilize leased aircraft that would otherwise go to competing ULCC startups, capture a new market and lose less money (possibly even turn a profit) all in one, why not? Especially if it protects majority of their profit-generating flying which relies on the hub and spoke system as well as targeting premium travellers. The very flying, that will be able to sustain the higher costs of better WAWCON that the industry desires.

Gates and slots full? At YXX, YEG, YHM, YHZ. Not possible. All of these airport have tons of gate availability and their respective airport authorities are in a position where they have so much availability that they are handing out sweetheart deals to airlines to attract more flights! (Reduced landing fees, reduced gate fees, etc).
But you’re right the flying will be more sustainable - why? Because Swoop will have a lower CASM.

Yes I agree it is not possible to keep them full all day long. However, if you occupy gates and slots strategically at certain times of the day/week where a bulk of the passenger traffic wants to fly, that's one less gate/slot available for the competition at that time. Larger companies are also better able to leverage themselves over the competition by saying "hey, we can operate x number of flights, bring y passenger volume and z millions of dollars of revenue to your airport (offer certain things as an incentive) if you limit Alias operators slots to x number per day at xxxx time of the day. The only way that is feasible is of course with a lower CASM. The system is a lot more complex- just my 2c.

[cloak]

Question: has the name and intent of Swoop made life easier or more difficult for Jetlines, Flair, Norwegean, etc.?

[onspeed]

Swoop is clearly meant to reduce the cost of running your airline. Which means front and back ends, mostly everything else is a fixed cost. Plainly its an attack on you and your colleagues careers, because really its the only place to save. Unionizing and voting to strike will probably be one of the best moves for Canadian Aviation in the past 20 years, you saved your own careers and hopefully will stop downward pressure in our industry.

My view, there is no chance of a real ultra low cost starting up and threatening WJ, the regulatory requirements, capital required, cost of operating in this country all combine to make the barrier to high. If someone was going to do it they would have done it already. Your management is using low cost as the bogeyman to get concessions.

[av8r374]

Swoop is clearly meant to reduce the cost of running your airline. Which means front and back ends, mostly everything else is a fixed cost. Plainly its an attack on you and your colleagues careers, because really its the only place to save. Unionizing and voting to strike will probably be one of the best moves for Canadian Aviation in the past 20 years, you saved your own careers and hopefully will stop downward pressure in our industry.

My view, there is no chance of a real ultra low cost starting up and threatening WJ, the regulatory requirements, capital required, cost of operating in this country all combine to make the barrier to high. If someone was going to do it they would have done it already. Your management is using low cost as the bogeyman to get concessions.

Remember what happened the last time somebody said the words "no chance of a startup threatening a big airline"? (Hint: think back to 1996)

[WeedPro2000]

Swoop is clearly meant to reduce the CASM of an airline in order to get first mover status in the ULCC space in Canada. It is an attack against other investor groups looking to gain a foothold in that space. It will do this without sacrificing the branding of WJ, which as anyone with a brain can see is moving in a direction opposite to a no frills carrier.

[J Roc]

.

[J Roc]

Swoop is clearly meant to reduce the CASM of an airline in order to get first mover status in the ULCC space in Canada. It is an attack against other investor groups looking to gain a foothold in that space. It will do this without sacrificing the branding of WJ, which as anyone with a brain can see is moving in a direction opposite to a no frills carrier.

CASM??! What are you talking about??? Everyone knows that we measure cost at WJ by using inflated, arbitrary and inaccurate percentages relative to profit over a 5 year period.

Sheesh! You need some re-education, John. Time to brush up on your Cam-o-grams.

[sanjet]

Swoop is clearly meant to reduce the CASM of an airline in order to get first mover status in the ULCC space in Canada. It is an attack against other investor groups looking to gain a foothold in that space. It will do this without sacrificing the branding of WJ, which as anyone with a brain can see is moving in a direction opposite to a no frills carrier.

I got no skin in this game but part of the brand is the people that work there, not just a shiny airplane with new paint colour. When you destroy that morale, your brand will take the hit in terms of customer service and revenue. I get it, you need to control CASM and there are ways to do it, defintiely not this way.

I can guarantee this case will be studied for years to come in business schools on how a high morale company got destoryed by management within 18 months and the fallout that came with it.

[J Roc]

Didn't Fred Cleveland once say to our pilot group - "pilot cost represent only a fraction of CASM"?

Yah, he didn't last.

[altiplano]

Some people still buy it - that it's all about the pilots and our wages.

The fact is that you could pay the guys in the front nothing and it wouldn't even show as a blip on reducing CASM meaningfully.

The highest profit ULCCs in the US pay their pilots similar to US Legacy Airlines... and they are among the most profitable airlines in the world and have a highly motivated workforce. That's how it's done, densifying, ancillary charges, secondary markets, adaptability. Paying pilots shitty is just a bonus for them if you buy it.

[Oleo 4]

Swoop is clearly meant to reduce the CASM of an airline in order to get first mover status in the ULCC space in Canada. It is an attack against other investor groups looking to gain a foothold in that space. It will do this without sacrificing the branding of WJ, which as anyone with a brain can see is moving in a direction opposite to a no frills carrier.

John, I will buy your arguement of first mover against mainly indigo being of concern. The reality of ULCC in Canada is still unproven and everyone is watching flair and the ancillary fees as it matures. However you state it’s only purpose is to reduce casm of the same airline you also state has no brand affiliation.

I will beg to differ that these two entities are separate, and so will many analysts today who since our AGM quite clearly interchange Swoop with WestJet. By the companies own adminsion to the arbitrator we are now a common employer.

The latest swoop advertising being the last example of a cheeky advertising campaign. It did what it set out to do and garner free advertising on social media and the networks. It achieved its mission but at a cost. Since the public, company, pilots, and more importantly investors have never separated the entities. Swoop will affect WestJet going forward and whatever flavour of the day our direction is.

[RidersRule]

Because of the companies ineptness they are now paying 26 original swoop captains, plus 26 bypass captains. So much for the low pilot costs.

[aerobod]

John, I will buy your arguement of first mover against mainly indigo being of concern. The reality of ULCC in Canada is still unproven and everyone is watching flair and the ancillary fees as it matures. However you state it’s only purpose is to reduce casm of the same airline you also state has no brand affiliation.

I will beg to differ that these two entities are separate, and so will many analysts today who since our AGM quite clearly interchange Swoop with WestJet. By the companies own adminsion to the arbitrator we are now a common employer.

The latest swoop advertising being the last example of a cheeky advertising campaign. It did what it set out to do and garner free advertising on social media and the networks. It achieved its mission but at a cost. Since the public, company, pilots, and more importantly investors have never separated the entities. Swoop will affect WestJet going forward and whatever flavour of the day our direction is.

The brand differentiation is only aimed at the public, no different than what the retail industry does, for example CTC and their Sport Chek and Atmosphere brands selling fundamentally the same products to a different market segment.

[True North]

Some people still buy it - that it's all about the pilots and our wages.

The fact is that you could pay the guys in the front nothing and it wouldn't even show as a blip on reducing CASM meaningfully.

Utter bollocks and100% wrong. Certainly what the union types would like you to believe.

You have obviously never done any kind of costing for a business.

[altiplano]

Some people still buy it - that it's all about the pilots and our wages.

The fact is that you could pay the guys in the front nothing and it wouldn't even show as a blip on reducing CASM meaningfully.

Utter bollocks and100% wrong. Certainly what the union types would like you to believe.

You have obviously never done any kind of costing for a business.

No, you are 1000% wrong!

You should quote the rest of my post too, are you going to tell me that's wrong?

The highest profit ULCCs in the US pay their pilots similar to US Legacy Airlines... and they are among the most profitable airlines in the world and have a highly motivated workforce. That's how it's done, densifying, ancillary charges, secondary markets, adaptability. Paying pilots shitty is just a bonus for them if you buy it.

[True North]

Some people still buy it - that it's all about the pilots and our wages.

The fact is that you could pay the guys in the front nothing and it wouldn't even show as a blip on reducing CASM meaningfully.

Utter bollocks and100% wrong. Certainly what the union types would like you to believe.

You have obviously never done any kind of costing for a business.

No, you are 1000% wrong!

Are WJ pilots paid in magic fairy dust, or something other than cold hard currency? You've obviously been snorting some of that dust to proclaim that pilot wages have no bearing on the bottom line or CASM. Wages are a COST. You do know the "C" in CASM stands for COST, right? And pilot wages are a significant cost. You have swallowed the union propaganda hook, line and sinker so there is no point debating this any further.

You should quote the rest of my post too, are you going to tell me that's wrong?

The highest profit ULCCs in the US pay their pilots similar to US Legacy Airlines... and they are among the most profitable airlines in the world and have a highly motivated workforce. That's how it's done, densifying, ancillary charges, secondary markets, adaptability. Paying pilots shitty is just a bonus for them if you buy it.

I didn't bother addressing the remainder of your post because it is entirely irrelevant. The US ULCCs and legacy carriers operate in, are you sitting down, the United States. WestJet operates in Canada in an entirely different environment with different tax and fee structures so any comparison is apples and cabbages. Totally pointless.

[altiplano]

Are WJ pilots paid in magic fairy dust, or something other than cold hard currency? You've obviously been snorting some of that dust to proclaim that pilot wages have no bearing on the bottom line or CASM. Wages are a COST. You do know the "C" in CASM stands for COST, right? And pilot wages are a significant cost. You have swallowed the union propaganda hook, line and sinker so there is no point debating this any further.

Stick the condecension... and get something right at least.

I didn't say "no bearing", I said meaningful reduction... in the scope of CASM metrics, the amount for pilot salary is extremely minimal... ULCCs reduce CASM with zero frills, high density configurations, and lower fees at secondary airports where available, that's where the MEANINGFUL REDUCTION occurs... Sure a few bucks less for a pilot is a cherry on top, but it's not what makes the model work.

The intangibles like a highly motivated front end crew saving bucks for the airline day in, day out make a more significant difference.

[True North]

Are WJ pilots paid in magic fairy dust, or something other than cold hard currency? You've obviously been snorting some of that dust to proclaim that pilot wages have no bearing on the bottom line or CASM. Wages are a COST. You do know the "C" in CASM stands for COST, right? And pilot wages are a significant cost. You have swallowed the union propaganda hook, line and sinker so there is no point debating this any further.

Stick the condecension... and get something right at least.

I didn't say "no bearing", I said meaningful reduction... in the scope of CASM metrics, the amount for pilot salary is extremely minimal... ULCCs reduce CASM with zero frills, high density configurations, and lower fees at secondary airports where available, that's where the MEANINGFUL REDUCTION occurs... Sure a few bucks less for a pilot is a cherry on top, but it's not what makes the model work.

The intangibles like a highly motivated front end crew saving bucks for the airline day in, day out make a more significant difference.

And you're still wrong. But keep telling yourself that.

[aerobod]

Pilot compensation (including profit share) at mainline was 6.5% of CASM including fuel, 9% of CASM ex-fuel (9.89c) in 2017.

For an ex-fuel CASM of 7.0c at Swoop, if WestJet mainline wages are paid, pilot wages will be almost 12% of CASM ex-fuel after adjusting for seat capacity (189 vs 174). This will be the single largest non-fixed cost, higher than the total airport operating cost out the current announced airports.