Be Ready

[aerobod]

What happens if the WestJet pilots go on strike, is the company on the hook with the passenger bill of rights for cancelled flights?

No. Labor action is an exclusion.

With the current APPR, the airlines do have responsibility for events beyond their control (which includes labour action), the least they have to do is provide a refund at PAX request, but certainly within 14 days from first flight on an itinerary they need to arrange alternative flights on another carrier within 48 hours of the original flight time if a PAX requests that instead of a refund. The way the APPR is written it is not clear whether a full refund to the original form of payment is good enough when the first flight on the itinerary is more than 14 days in the future (this is an area that could be subject to legal challenge). Here is the APPR wording from https://rppa-appr.ca/eng/right/flight-d ... cellations :

“Situations outside the airline's control
(for example, weather conditions that make it impossible to safely operate the aircraft)

Summary of rebooking and refunds for situtions outside the airline's control
The airline (large or small) must rebook you on its next available flight or on the flight of an airline with which it has a commercial agreement. The flight must depart within 48 hours after your original departure time. If the airline cannot rebook you within 48 hours, the airline must, at your choice:

Provide a refund; or
Make alternate travel arrangements, free of charge. The details of the new flight depend on the size of the airline, as follows.
If you chose alternate travel arrangements

Large airlines

Large airlines* must rebook you on a flight operated by any airline. The new flight must take any reasonable route out of the same airport or from a nearby airport to your destination. In that case, they will also have to transport you to that airport.

*The size of the airline is listed in the terms and conditions of your ticket (the airline's tariff). Air Canada (including Jazz) and WestJet are currently large airlines.

Small airlines

Small airlines* (for example, Sunwing, Air Transat, Porter, Swoop or Flair) must rebook you on their next available flight or on the flight of an airline with which they have a commercial agreement. The flight must take any reasonable route from the same airport to your destination. Small airlines are not required to rebook you with an airline with which they do not have a commercial agreement.

*The size of the airline is listed in the terms and conditions of your ticket (the airline's tariff). Sunwing Airlines, Air Transat, Porter, Swoop and Flair Airlines are currently small airlines.

If you chose a refund and you're no longer at your point of origin

If your trip no longer serves its purpose because of the delay or cancellation, and you're no longer at your point of origin (for example, if you are at a connecting point), then the airline (large or small) must rebook you on a flight back to your point of origin that accommodates your travel needs, free of charge, and refund the entire ticket (as if no part of the trip had been made).”

[pacman007]

Oh wow! That would be expensive and a nightmare refund all the pax.

[averageatbest]

Oh wow! That would be expensive and a nightmare refund all the pax.

People stop booking with airlines that have strike rumours brewign. I'm sure that the company has already started to see a small drop in bookings due to the conciliation request.

When the strike vote hits, sales will drop to the point where the company will lose millions if they let it get that far. Getting to a strike could cost tens of millions.

[Fanblade]

What happens if the WestJet pilots go on strike, is the company on the hook with the passenger bill of rights for cancelled flights?

No. Labor action is an exclusion.

With the current APPR, the airlines do have responsibility for events beyond their control (which includes labour action), the least they have to do is provide a refund at PAX request, but certainly within 14 days from first flight on an itinerary they need to arrange alternative flights on another carrier within 48 hours of the original flight time if a PAX requests that instead of a refund. The way the APPR is written it is not clear whether a full refund to the original form of payment is good enough when the first flight on the itinerary is more than 14 days in the future (this is an area that could be subject to legal challenge). Here is the APPR wording from https://rppa-appr.ca/eng/right/flight-d ... cellations :

“Situations outside the airline's control
(for example, weather conditions that make it impossible to safely operate the aircraft)

Summary of rebooking and refunds for situtions outside the airline's control
The airline (large or small) must rebook you on its next available flight or on the flight of an airline with which it has a commercial agreement. The flight must depart within 48 hours after your original departure time. If the airline cannot rebook you within 48 hours, the airline must, at your choice:

Provide a refund; or
Make alternate travel arrangements, free of charge. The details of the new flight depend on the size of the airline, as follows.
If you chose alternate travel arrangements

Large airlines

Large airlines* must rebook you on a flight operated by any airline. The new flight must take any reasonable route out of the same airport or from a nearby airport to your destination. In that case, they will also have to transport you to that airport.

*The size of the airline is listed in the terms and conditions of your ticket (the airline's tariff). Air Canada (including Jazz) and WestJet are currently large airlines.

Small airlines

Small airlines* (for example, Sunwing, Air Transat, Porter, Swoop or Flair) must rebook you on their next available flight or on the flight of an airline with which they have a commercial agreement. The flight must take any reasonable route from the same airport to your destination. Small airlines are not required to rebook you with an airline with which they do not have a commercial agreement.

*The size of the airline is listed in the terms and conditions of your ticket (the airline's tariff). Sunwing Airlines, Air Transat, Porter, Swoop and Flair Airlines are currently small airlines.

If you chose a refund and you're no longer at your point of origin

If your trip no longer serves its purpose because of the delay or cancellation, and you're no longer at your point of origin (for example, if you are at a connecting point), then the airline (large or small) must rebook you on a flight back to your point of origin that accommodates your travel needs, free of charge, and refund the entire ticket (as if no part of the trip had been made).”

Are you sure?

According to Gábor Lukács the passenger rights legislation leaves labor action beyond the airlines control. So in Canada a free rebooking or refund at passenger request. But no compensation. Now outside Canada’s borders the rules are different. Europe for example doesn’t exempt labor action.

But realistically most of WJ exposure would be to domestic rules which don’t require compensation.

[Fanblade]

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Aerobod,

I call BS on who you state you are and your stated motivation.

In my opinion, the post I have quoted above demonstrates an NHL-level of manipulative fear mongering on a vulnerable employee group. And what’s worse is you know it.

First you start with sympathy to build comradery. “I have friends their”. “ I would be disappointed”.

Then you quickly move to fear and likely death of your career.

Culminating in “tick tock”. The addition of time counting down toward your death. A sense of critical urgency. The final ingredient require to construct a burning platform.

Your constructed burning platform is simply too obvious. You over played it. On an anonymous forum no less.

I suggest WJ people also do a google search of Burning Platform. This is a very common tactic from management. Manufacture a situation were the employee group believes their death is imminent. They will agree to anything.

A quote around AC from our management. Nothing focuses the mind like a hanging in the morning.

I have seen it. Been tricked by it. Can now smell its stench miles away.

So to undo some of this rhetoric.

Let’s say Onex really is regretting their purchase of WJ. WJ’s value is not zero. Far from it. They wouldn’t simply shut it down and right down the entire purchase price. No they would sell it at current market value and right down the net loss.

The only way aerobod’s fear mongering plays out is if WJ has zero value. That is far from the case.

[Fanblade]

CALIN ROVINESCU Sometimes you have to reinvent the wheel Calin Rovinescu, the gung-ho chief restructuring officer (CRO) at Air Canada for 12 drama-packed months in 2003 and 2004, seems to get an extra hit of adrenalin when the pressure in a crisis reaches a climax. "The expression we would use is a 'burning platform,'" he says. A favourite adage of his: "Nothing focuses the mind like a hanging in the morning."

https://www.theglobeandmail.com/report- ... le1090487/

Calin was king of the burning platform.

[Fanblade]

https://fairygodboss.com/career-topics/burning-platform

Things to know about Burning Platforms

[NSC182E]

Well you better not burn anything because firefighters are apparently now redundant. I read it here. Apparently so are paramedics.

Nothing like a disgruntled employee to turn me off a company. I flew 8 family of four trips on WJ in 2022 each one worse than the last. 3 in 2021 and 2 in 2020. I chose who I spend my money with. All from the east coast. Between getting shafted by the decision to abandon eastern canada and attitudes like I have read in this post from the employees I’ll have no problem purchasing my tickets on AC.
Guess who’s buying tickets on your airline. Cops teachers paramedics and firefighters. They’re the ones who can afford to fly. Mostly unionized. Keep running them down and see how well paid you are with no customes

I wouldn’t want some of the people who posted here responsible for my and my family’s safety.

[lostaviator]

Well you better not burn anything because firefighters are apparently now redundant. I read it here. Apparently so are paramedics.

Nothing like a disgruntled employee to turn me off a company. I flew 8 family of four trips on WJ in 2022 each one worse than the last. 3 in 2021 and 2 in 2020. I chose who I spend my money with. All from the east coast. Between getting shafted by the decision to abandon eastern canada and attitudes like I have read in this post from the employees I’ll have no problem purchasing my tickets on AC.


I wouldn’t want some of the people who posted here responsible for my and my family’s safety.

You do realize that the poster who made those remarks is an AC employee, right?

This is an anonymous forum. Just because someone is posting in the WJ subforum does not make them an employee.

So - how do you feel about putting your family on both WJ and AC now? If you spend your life avoiding workforces with upset employees, you might have quite a difficult life. This might come as a surprise to you - but nurses are pretty ticked off these days as well. (Not picking on nurses, it was just an example that came to mind)

All that being said, I think you are taking their post out of context. We go our entire careers being told we are just button pushers. Why can't it be turned around once in a while? Is everyone else too sensitive? This type of attitude is akin to a theist being able to tell an atheist he/she is going to hell, but unable to handle criticism of their faith from the other direction.

[SeaBat]

Oh no! Please Mr. 182E... please don't leave us and go to another airline. There. Does that make you feel better? We honestly don't give a flying fu@& when a passenger states, "I'll never fly on your airline again." To be honest, we normally make fun of you later that night while having a beer at the bar.

[aerobod]

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Aerobod,

I call BS on who you state you are and your stated motivation.

In my opinion, the post I have quoted above demonstrates an NHL-level of manipulative fear mongering on a vulnerable employee group. And what’s worse is you know it.

First you start with sympathy to build comradery. “I have friends their”. “ I would be disappointed”.

Then you quickly move to fear and likely death of your career.

Culminating in “tick tock”. The addition of time counting down toward your death. A sense of critical urgency. The final ingredient require to construct a burning platform.

Your constructed burning platform is simply too obvious. You over played it. On an anonymous forum no less.

I suggest WJ people also do a google search of Burning Platform. This is a very common tactic from management. Manufacture a situation were the employee group believes their death is imminent. They will agree to anything.

A quote around AC from our management. Nothing focuses the mind like a hanging in the morning.

I have seen it. Been tricked by it. Can now smell its stench miles away.

So to undo some of this rhetoric.

Let’s say Onex really is regretting their purchase of WJ. WJ’s value is not zero. Far from it. They wouldn’t simply shut it down and right down the entire purchase price. No they would sell it at current market value and right down the net loss.

The only way aerobod’s fear mongering plays out is if WJ has zero value. That is far from the case.

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

[NSC182E]

Oh no! Please Mr. 182E... please don't leave us and go to another airline. There. Does that make you feel better? We honestly don't give a flying fu@& when a passenger states, "I'll never fly on your airline again." To be honest, we normally make fun of you later that night while having a beer at the bar.

Well good for you. Maybe if you were better paid you wouldn’t be such an asshole? Nah. I doubt that

[RippleRock]

They won't, they feel they're entitled to make 2-3-4x more than teachers who raise the next generation (and their kids), paramedics who save lives on a daily basis, police, and firefighters, all because they captain a metal tube that mostly flies itself on autopilot.

If money to do flight school wasn't a barrier of entry to most, many of these pilots wouldn't be doing these jobs.

The worst result a teacher could have is that a former student ends up living in their Moms basement till they're 30.

Cops aren't allowed to arrest anymore without consulting the diversity and cultural handbook.

Paramedics are too busy scraping the vomit out of the throats of overdosed drug users to help anyone that pays taxes.

Firefighters are almost redundant with the new firecodes requiring sprinklers and half a hundred smoke alarms in every building. When was the last time you saw them racing off to a real fire? By the time they do get to a real one, the occupants have been out making Smores for a half hour.

Above all, the most overpaid are accountants who are overcompensated bookkeepers that do nothing a properly programmed computer can't do 4x faster. Trust me, there's a program for everything you do.

Anything else?

Congrats, you've proven that since there's a program for everything you do, you don't need a raise.

My comments were "tough and cheek".

For you to come on here and claim pilots do nothing but sit in metal tube that flys itself is asinine.

You clearly have no clue. I have no clue what you do, nor a firefighter, nor a paramedic, but I would never have the audacity to say it and claim honestly that their contribution is worthless.

Put your "big girl panties" on and suck it up with bit of class.....or better yet find an accountants forum instead.

[digits_]

My comments were "tough and cheek".

I can see where your disdain for teachers comes from

[RippleRock]

My comments were "tough and cheek".

I can see where your disdain for teachers comes from

Both my parents were teachers. Dont know where thats coming from........you're reaching I guess.

They never had the capacity to kill anyone with a hasty decision though. Nor were they ever required to make any life or death decisions that relied on years of experience.

Accountants, now those are the real heros of the airline industry. LOL. Just look at the landscape littered with epic failures........guess you'd claim they were caused by fair employee compensation. Again, LOL.

[Fanblade]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

[digits_]

My comments were "tough and cheek".

I can see where your disdain for teachers comes from

Both my parents were teachers. Dont know where thats coming from........you're reaching I guess.

I think you're missing the joke.

Hint: Were any of them English teachers?



(https://dictionary.cambridge.org/dictio ... e-in-cheek)

[aerobod]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

[Fanblade]

Aerobod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted and other speculative post like it. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

Yes I am pro union. But I’m not anti management. I’m anti being taken advantage of by management. There is a difference.

[cdnavater]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

I could be wrong, didn’t your analysis on RASM and CASM talk about having to increase the ticket price and whether or not the market could/would support that? Seems speculative as well.
I’m with Fanblade, this is pure fear mongering at its best, you have no idea whether or not the increase in CASM will be the nail in the coffin, the only way to find this out is to see if after the cost of the high priced autopilots increases, enough revenue comes in to offset, anything else is speculating.
The other thing, it isn’t WJ purchasing Sunwing is it? Even if it is officially WJ buying, the money is coming from Onex and this seems like part of a long term plan to dominate, also seems like a poor business decision to write it off because employees in demand want a raise!

PS; If the airlines simply looked at pilots as parts(autopilots) that cannot be MEL’d, and those parts have increased due to supply chain disruption, maybe they could stomach it. Any employee who needs a specific skill and is in demand can and should expect a significant pay increase, if you can be replaced with a short company training course, maybe not so much.

[SeaBat]

Oh no! Please Mr. 182E... please don't leave us and go to another airline. There. Does that make you feel better? We honestly don't give a flying fu@& when a passenger states, "I'll never fly on your airline again." To be honest, we normally make fun of you later that night while having a beer at the bar.

Well good for you. Maybe if you were better paid you wouldn’t be such an asshole? Nah. I doubt that

HaHaHa, good one... some more bar room fodder.

[Montroyal]

Westjet is going out of business because the pilots want industry rates...lol

Reminds me of when AC pilots were told they needed a 10% paycut to fly cargo...something they were already doing on a machine they were already flying. The operation was already stood up, planes ready for conversations but that 10% pay cut was the "make or break"

Or the latest MOA at AC and the pilots were told this pilot shortage was "temporary". Looks like it is getting a lot worse...

Fact is...union busting 101 is to lie, distort and manipulate. This is no different

Well done WestJet for not buying into the endless lies management will throw out there

[aerobod]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

[cdnavater]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

Super information, the part that is missing, is the actual cost to give pilots what they are asking for. Of the 13 million per day operating cost, what is the pilots salary?
Obviously if pilot wages go up and what you say is true, outgoing equals incoming, incoming has to go up, by how much is not really the pilots job. Your argument also assumes WJ is the only company who’s cost are going up, in the current environment that is highly unlikely.

[aerobod]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

Super information, the part that is missing, is the actual cost to give pilots what they are asking for. Of the 13 million per day operating cost, what is the pilots salary?
Obviously if pilot wages go up and what you say is true, outgoing equals incoming, incoming has to go up, by how much is not really the pilots job. Your argument also assumes WJ is the only company who’s cost are going up, in the current environment that is highly unlikely.

They are expected variables which I looked at earlier in the thread, basically:

- expected increase in ticket prices over a 2 year period with a lag (I expect about 20% due to current lack of profitability in the industry), but discounting or similar prices as now for as long as recession is likely and ULCCs are taking new aircraft to provide excess capacity.

- first one in to increase cost (WS) will be the first to increase losses that will need capital to finance.

- wildcard is what ULCCs do to WS in the time it takes the market to stabilise at a new higher RASM across the board.

- AC is insulated from the competitive pressures WS is under due to their much better RASM driven by business travellers.

- Bankruptcy of a couple of ULCCs would probably be the best news for WS, taking the pressure off not being able to grow RASM, but I wouldn't bet on it as the most likely saviour.

All of these factors work into my initial CASM/RASM discussion earlier in the thread: viewtopic.php?p=1238881#p1238881