Will Westjet survive?

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rudder
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Re: Will Westjet survive?

Post by rudder »

ayseven wrote: Mon Jun 01, 2020 1:00 pm The real question should be: "how much legroom and armroom am I going to have now?" I think things are looking up!
Guess how many airlines will survive at 50-66% load factor?

None.
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ayseven
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Re: Will Westjet survive?

Post by ayseven »

Yup, things are tough. And they get tougher when NOBODY wants to go flying somewhere...
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Hangry
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Re: Will Westjet survive?

Post by Hangry »

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Mostly Harmless
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Re: Will Westjet survive?

Post by Mostly Harmless »

I don't think any business starts out with planing to fail or shut down. I'm fairly certain Canadian Airlines would love to still be in business today.

I do think most companies seem to survive in-spite of themselves rather than because of themselves.
Hangry wrote: Mon Jun 01, 2020 9:37 pm.
Here, have a Snickers
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Realitychex
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Re: Will Westjet survive?

Post by Realitychex »

rudder wrote: Mon Jun 01, 2020 2:10 pm
ayseven wrote: Mon Jun 01, 2020 1:00 pm The real question should be: "how much legroom and armroom am I going to have now?" I think things are looking up!
Guess how many airlines will survive at 50-66% load factor?

None.
Depends what the yields are.

8)
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Eric Janson
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Re: Will Westjet survive?

Post by Eric Janson »

ayseven wrote: Mon Jun 01, 2020 1:00 pm The real question should be: "how much legroom and armroom am I going to have now?" I think things are looking up!
I wouldn't be so sure about that....

EU Airlines

- No Social Distancing (flights are full)
- Mandatory to wear Mask
- No cabin service

With a lack of direct flights people are resorting to all kinds of odd routings to get to their destinations.

And that's if you are even allowed on in the first place. I live in a different country than the country that issues my passport and I need to prove residency before I am allowed to travel home.

Been refused at check in twice so far - and I was travelling in uniform.

International travel is extremely difficult at the moment. High risk too without Social Distancing.
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indieadventurer
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Re: Will Westjet survive?

Post by indieadventurer »

Condolences to all the out station airport staff.

You have always been fantastic to us pilots (both wj and other company) as commuters and sorry to see it end this way.

https://www.flightglobal.com/strategy/ ... 87.article
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sstaurus
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Re: Will Westjet survive?

Post by sstaurus »

If/when WJ comes out the other side of this, it will be a sad shell of it’s former self :(
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aerobod
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Re: Will Westjet survive?

Post by aerobod »

sstaurus wrote: Thu Jun 25, 2020 6:57 am If/when WJ comes out the other side of this, it will be a sad shell of it’s former self :(
The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
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rudder
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Re: Will Westjet survive?

Post by rudder »

aerobod wrote: Thu Jun 25, 2020 7:57 am The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
With no public guidance on WJ financials available since Q3 2019, and given likely cash run rates in Q1 and Q2 2020, there is no way to know for a fact what cash reserves are for WJ vs the industry. And given its status as a wholly owned subsidiary of ONEX, cash levels are likely being maintained at subsistence levels only.
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Jean-Pierre
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Re: Will Westjet survive?

Post by Jean-Pierre »

Sound like people are being fired and maybe re-hired at outsource contractor company. Pretty classic union busting on Onex part. chop chop
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RRJetPilot
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Re: Will Westjet survive?

Post by RRJetPilot »

aerobod wrote: Thu Jun 25, 2020 7:57 am
sstaurus wrote: Thu Jun 25, 2020 6:57 am If/when WJ comes out the other side of this, it will be a sad shell of it’s former self :(
The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
So far no other airlines or company that Im aware of in Canada have fired their employees only to subcontract the work (the exact same job) to another company at a lower wage. At least he was nice enough to say the former Westjetters might have preferential treatment in applying for their old jobs at these new companies! :rolleyes: :rolleyes: :rolleyes:
Lots of foreign pilots out there looking for work, wonder if Schwartzy is looking for new innovative ways to replace you as well.
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Yycjetdriver
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Re: Will Westjet survive?

Post by Yycjetdriver »

RRJetPilot wrote: Thu Jun 25, 2020 8:17 am
aerobod wrote: Thu Jun 25, 2020 7:57 am
sstaurus wrote: Thu Jun 25, 2020 6:57 am If/when WJ comes out the other side of this, it will be a sad shell of it’s former self :(
The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
So far no other airlines or company that Im aware of in Canada have fired their employees only to subcontract the work (the exact same job) to another company at a lower wage. At least he was nice enough to say the former Westjetters might have preferential treatment in applying for their old jobs at these new companies! :rolleyes: :rolleyes: :rolleyes:
Lots of foreign pilots out there looking for work, wonder if Schwartzy is looking for new innovative ways to replace you as well.
I find it strange that every news article writing yesterday in regards to these 3333 job cuts called them “lay offs”. When searching Westjet in google news yesterday all but one called them layoffs, a later search and that one article was gone. This also came a day after they announced they wouldn’t be seeking an exemption to the labour code in regards to terminations......Classic Westjet.
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aerobod
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Re: Will Westjet survive?

Post by aerobod »

rudder wrote: Thu Jun 25, 2020 8:11 am
aerobod wrote: Thu Jun 25, 2020 7:57 am The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
With no public guidance on WJ financials available since Q3 2019, and given likely cash run rates in Q1 and Q2 2020, there is no way to know for a fact what cash reserves are for WJ vs the industry. And given its status as a wholly owned subsidiary of ONEX, cash levels are likely being maintained at subsistence levels only.
Revenue run-rates and costs before COVID-19 won't have changed substantially and the write-down guidance Onex gave in their financials wouldn't indicate any strange change in that way. Onex also has to keep the corporate finances separate for WestJet to meet both Canadian ownership reporting requirements and asset management reporting to enable eventual sale and also be compliant with the Onex public reporting needs. As with their other major assets with a lag, WestJet basic financials will appear in the Onex financials. They can't just take the cash out of the company and meet regulations or have a saleable asset in the future.

Airline CASM, RASM and proportioning of costs, booking curve profile, cash held in ticket pre-sales and other metrics are all fairly easy to predict for an airline with a given product and fleet profile, so whether public or private, not much info is needed to extrapolate the basic financials of an airline.
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rudder
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Re: Will Westjet survive?

Post by rudder »

WJ cannot issue stock. WJ cannot sell debt. WJ can sign loans (with the concurrence of ONEX).

WJ is very dependent upon ONEX for maintaining cash reserves.
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aerobod
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Re: Will Westjet survive?

Post by aerobod »

Yycjetdriver wrote: Thu Jun 25, 2020 8:44 am
RRJetPilot wrote: Thu Jun 25, 2020 8:17 am
aerobod wrote: Thu Jun 25, 2020 7:57 am
The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
So far no other airlines or company that Im aware of in Canada have fired their employees only to subcontract the work (the exact same job) to another company at a lower wage. At least he was nice enough to say the former Westjetters might have preferential treatment in applying for their old jobs at these new companies! :rolleyes: :rolleyes: :rolleyes:
Lots of foreign pilots out there looking for work, wonder if Schwartzy is looking for new innovative ways to replace you as well.
I find it strange that every news article writing yesterday in regards to these 3333 job cuts called them “lay offs”. When searching Westjet in google news yesterday all but one called them layoffs, a later search and that one article was gone. This also came a day after they announced they wouldn’t be seeking an exemption to the labour code in regards to terminations......Classic Westjet.
This is due to the terminology used and the 16 week notice requirement for more than 50 employees that are being terminated.

Initially the layoffs announced around 20 April for non-crew employees were termed "temporary layoffs" or a furlough. The current situation is that 3333 of those temporary layoffs are now being made permanent and those employees have to be terminated with legally mandated payout minimums within 6 months of the initial layoff, but this decision has to be made 16 weeks before the end of the 6 month (26 week) period and notice given to the government, that is why before 10 weeks from the 20 Apr the terminations have to be finalised, i.e. by 29 Jun.

WestJet initially wanted the labour code exemption for extension of furlough beyond 6 months so that they didn't have to make layoffs permanent for employees, keeping them on furlough with the ability to collect CERB longer with the recall decision delayed until market conditions became more apparent. They withdrew the exemption request due to determining the permanent layoff and termination number before hitting the 29 Jun deadline. Air Canada has also requested an exemption for the same reasons, but it hasn't been granted so they have a looming deadline for a decision, too.
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aerobod
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Re: Will Westjet survive?

Post by aerobod »

RRJetPilot wrote: Thu Jun 25, 2020 8:17 am
aerobod wrote: Thu Jun 25, 2020 7:57 am
sstaurus wrote: Thu Jun 25, 2020 6:57 am If/when WJ comes out the other side of this, it will be a sad shell of it’s former self :(
The same can be said for any airline in the world at the moment. WestJet is actually above the average airline in it's cash reserves as a portion of it's operating costs (as is Air Canada), based on it's last quarterly report before Onex took over, hence able to weather the pandemic better than the average airline without external funding.
So far no other airlines or company that Im aware of in Canada have fired their employees only to subcontract the work (the exact same job) to another company at a lower wage. At least he was nice enough to say the former Westjetters might have preferential treatment in applying for their old jobs at these new companies! :rolleyes: :rolleyes: :rolleyes:
Lots of foreign pilots out there looking for work, wonder if Schwartzy is looking for new innovative ways to replace you as well.
Business is business, WestJet had maintained a lot of domestic airport ground handling staff compared with many airlines and overall the amount of in-sourcing there has been higher than the norm for their type of operation, they are just heading to the norm for offering a commodity service.

If they can't be cost efficient at doing the service internally compared with what is available in the market, then it is best out-sourced. Obviously they think they can still be competitive in YYZ, YYC, YVR and YEG in using internal services, but I'm not surprised about the other Canadian bases as the volume is too low (especially with a reduced post COVID network) to have a cost efficient organisation. Not really any different than their US and International operations that have been out-sourced since the beginning.
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JBI
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Re: Will Westjet survive?

Post by JBI »

Yesterday's announcement was hard. I know a lot of wonderful friends and colleagues who have tough decisions to make over the next few months.

While I've always felt that having actual WestJet employees as our ground services at YYC and customer facing agents in Canada was an asset instead of a cost, this isn't that far fetched a move. Aerobod is correct. ALL of WestJet's US and International bases already had both contracted Ground Services and Check-in services and the ground crew in YVR, YYZ, YOW, YHZ etc were already from contracted ground service providers. Even still, WJ was well above average at keeping customer service/ground services in house.

For example, Delta used to have a wholly owned ground service contractor that served United at some of its bases! Though Delta has since sold that company... and then later elected not to use it for many of its bases and awarded the contract to other contracted ground service providers. Let's not forget the history of Air Canada Technical Services and Aveos. There's a reason why companies such as Swissport, Menzies etc. are successful. For better or for worse, the employees at the previous service provider will usually get hired on right away by the new one and then be able to work multiple airlines (i.e. WJ's morning flight to YYC, Alaska's noon flight to SEA and Swoop's afternoon fight to YEG).

Again, not condoning it, but it's pretty common practice in the industry, not some union busting/parting out scheme from Onex (especially since none of the affected employees are unionized). This is a cost cutting measure for the current times and post-COVID future.
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Last edited by JBI on Thu Jun 25, 2020 12:01 pm, edited 1 time in total.
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Re: Will Westjet survive?

Post by JBI »

double post
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sstaurus
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Re: Will Westjet survive?

Post by sstaurus »

It's a shame, I feel that there was a competitive advantage in having the customer 'touch points' IE the CSAs, in-house. Now you will have people who only give a damn just enough to not get fired, wearing WJ uniforms. Obviously WJ figures the lack of service for 50c on the dollar (or whatever) is worth it.
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