Merger Board Order

[dontcallmeshirley]

Hard to find the profits of private companies, however Sunwing was on Profit 100 and Profit 500 lists for over 14 consecutive years…. The point is that Sunwing isn’t airline centric where Westjet is so it’s not apples to apples.

Sunwing makes money in the hotel business... they sold off their less profitable airline and vacation package business.

[pacman007]

Who paid Sunwings Govt loan that was taken out during Covid? Was it the profitable hotel business or the WestJet employees?

https://www.ch-aviation.com/news/126547 ... deral-loan

[safetyfirst123]

Who paid Sunwings Govt loan that was taken out during Covid? Was it the profitable hotel business or the WestJet employees?

https://www.ch-aviation.com/news/126547 ... deral-loan

It wasn't the Westjet employees

The outstanding loans are part of the price paid by Onex for Sunwing.

[Joeschumer]

Who paid Sunwings Govt loan that was taken out during Covid? Was it the profitable hotel business or the WestJet employees?

https://www.ch-aviation.com/news/126547 ... deral-loan

It was the Onex and their investors which also propped up Westjet…

[boeingboy]

Who paid Sunwings Govt loan that was taken out during Covid? Was it the profitable hotel business or the WestJet employees?

https://www.ch-aviation.com/news/126547 ... deral-loan

The $300 million was the purchase price - TUI and the Hunters also got a large (undisclosed) number of shares.

[boeingboy]

Westjet (employing over 14,000) people was a crippled, primarily domestic/trans border carrier coming out of Covid, they pulled out of the East to focus on their most profitable Western strongpoints.

Sunwing travel group (employing over 17,000), was and is a very profitable albeit smaller pilot group than Westjet. Sunwing continued doing what they do best after COVID which is vacation flying internationally on over 98% of their routes. Sunwing very seldom does domestic and when they did it was in their summer low season. Westjet only shifted their operation and added more international routes after the plan to acquire Sunwing Vacations in 2021.

Since both companies are private we don’t know the exact revenues but we can gather a good idea.

Speaking from a strictly revenue per pilot ratio:
Westjets annual revenue - 5 Billion with around 2300 pilots with encore.
2.2 million per pilot

Sunwings annual revenue - 2 billion with around 500 pilots
4 million per pilot

Obviously these aren’t very accurate but a rough idea that Sunwing is roughly twice as profitable per pilot as Westjet. Why is that? Sunwing has a large amount of money and employees on the hotel side of the business which Westjet has none of. Westjet has very different ventures from Sunwing and Sunwing is not an airline at its core, it’s a Travel group, which apart from Blue Diamond resorts and Nexus, Westjet (Onyx) now owns.

This is what everyone seems to forget. Sunwing airlines only ever existed to deliver the travel group their hotel guests at a cheaper and more controllable way
than wet leases. It was always a necessary evil for the travel group.

What does Sunwing bring to Westjet and their pilots?

- Western Canadian vacation flying will now be over 75% flown by Westjet, eastern nearly 40% and Canada wide the Westjet group will fly over 50% of Canadians down south, that is huge.
- Westjet has 117 737s Sunwing has 18, however brings winter business of 40 737s and a total pilot group enough to operate 33 aircraft. There will be a deficit of at least 7 aircraft and the crew required to operate them when they merge.
- Westjet should gain a 34% increase in winter block hours and only a 25% increase in pilot group size. That should create a defecit of approx. 100 captains and First Officers.
- Almost exclusively high credit legs
- Many more southern layovers
- Larger bases and an addition of at least one major eastern base (YUL)
- Hopefully many lifestyle gains in WJ CA3 with the help of former SWG union members for everyone’s benefit.
- The larger pilot group (Westjet) should gain relative seniority even if the outcome is not DOH
- Greater flying variety and more block hours in the system almost always equals better lifestyle and flexibility due to the sheer size of the bid package.
- The most important may simply be greater profit margins with vacation sales rather than simple airline fares, this will benefit both pilot groups in the merged airline in creating a more stable and consistently profitable company.

An electrical company with 10 employees with a revenue of 2 million can be more profitable than a huge company with a revenue of 2 billion. Revenue doesn’t mean profit so comparing the revenue of each company is pointless if you don’t know if either one made money. Also it’s more effective to compare revenue per employee not per segment of employees to speak of an effectiveness and generally less employees per dollar of revenue is more desirable.

Hard to find the profits of private companies, however Sunwing was on Profit 100 and Profit 500 lists for over 14 consecutive years…. The point is that Sunwing isn’t airline centric where Westjet is so it’s not apples to apples.

Sunwing routinely made around $70 - $100 million profit /year before COVID. The first summer (2022) after COVID (which for us was really only half a year) we made $75 million

[JBI]

I’ve heard that Westjet’s MEC does not want to follow the ALPA merger policy as they initially just wanted Sunwing pilots to be bottom of list, some even wanting Sunwing pilots to be below everyone at Encore.

This isn’t nor has it ever been the WJ MEC’s position.

While the odd pilot may think that because WJ/Onex bought SWG, it should be that way, any pilot who has spent more than 30 seconds looking at how mergers go doesn’t realistically take that position.

[sarg]

I’m still very confused on what WestJet pilots get? 80,000 block hrs means nothing when you add 550 pilots. Seems very one sided at this point. Hopefully arbitration will balance things out.

Westjet (employing over 14,000) people was a crippled, primarily domestic/trans border carrier coming out of Covid, they pulled out of the East to focus on their most profitable Western strongpoints.

Sunwing travel group (employing over 17,000), was and is a very profitable albeit smaller pilot group than Westjet. Sunwing continued doing what they do best after COVID which is vacation flying internationally on over 98% of their routes. Sunwing very seldom does domestic and when they did it was in their summer low season. Westjet only shifted their operation and added more international routes after the plan to acquire Sunwing Vacations in 2021.

Since both companies are private we don’t know the exact revenues but we can gather a good idea.

Speaking from a strictly revenue per pilot ratio:
Westjets annual revenue - 5 Billion with around 2300 pilots with encore.
2.2 million per pilot

Sunwings annual revenue - 2 billion with around 500 pilots
4 million per pilot

Obviously these aren’t very accurate but a rough idea that Sunwing is roughly twice as profitable per pilot as Westjet. Why is that? Sunwing has a large amount of money and employees on the hotel side of the business which Westjet has none of. Westjet has very different ventures from Sunwing and Sunwing is not an airline at its core, it’s a Travel group, which apart from Blue Diamond resorts and Nexus, Westjet (Onyx) now owns.

This is what everyone seems to forget. Sunwing airlines only ever existed to deliver the travel group their hotel guests at a cheaper and more controllable way
than wet leases. It was always a necessary evil for the travel group.

What does Sunwing bring to Westjet and their pilots?

- Western Canadian vacation flying will now be over 75% flown by Westjet, eastern nearly 40% and Canada wide the Westjet group will fly over 50% of Canadians down south, that is huge.
- Westjet has 117 737s Sunwing has 18, however brings winter business of 40 737s and a total pilot group enough to operate 33 aircraft. There will be a deficit of at least 7 aircraft and the crew required to operate them when they merge.
- Westjet should gain a 34% increase in winter block hours and only a 25% increase in pilot group size. That should create a defecit of approx. 100 captains and First Officers.
- Almost exclusively high credit legs
- Many more southern layovers
- Larger bases and an addition of at least one major eastern base (YUL)
- Hopefully many lifestyle gains in WJ CA3 with the help of former SWG union members for everyone’s benefit.
- The larger pilot group (Westjet) should gain relative seniority even if the outcome is not DOH
- Greater flying variety and more block hours in the system almost always equals better lifestyle and flexibility due to the sheer size of the bid package.
- The most important may simply be greater profit margins with vacation sales rather than simple airline fares, this will benefit both pilot groups in the merged airline in creating a more stable and consistently profitable company.

So many overly simplistic views.

But lets just look at 1 point.

No airline is going to get planes for a seasonal operation, that's what tour company airlines do. WestJet will not be adding 22 aircraft on a seasonal bases. Sunwing is bringing 18 planes based on WestJet's pilot to plane ratio for the narrowbody fleet Sunwing has about 200 pilots too many for the tails being added.

[boeingboy]

I’m still very confused on what WestJet pilots get? 80,000 block hrs means nothing when you add 550 pilots. Seems very one sided at this point. Hopefully arbitration will balance things out.

Westjet (employing over 14,000) people was a crippled, primarily domestic/trans border carrier coming out of Covid, they pulled out of the East to focus on their most profitable Western strongpoints.

Sunwing travel group (employing over 17,000), was and is a very profitable albeit smaller pilot group than Westjet. Sunwing continued doing what they do best after COVID which is vacation flying internationally on over 98% of their routes. Sunwing very seldom does domestic and when they did it was in their summer low season. Westjet only shifted their operation and added more international routes after the plan to acquire Sunwing Vacations in 2021.

Since both companies are private we don’t know the exact revenues but we can gather a good idea.

Speaking from a strictly revenue per pilot ratio:
Westjets annual revenue - 5 Billion with around 2300 pilots with encore.
2.2 million per pilot

Sunwings annual revenue - 2 billion with around 500 pilots
4 million per pilot

Obviously these aren’t very accurate but a rough idea that Sunwing is roughly twice as profitable per pilot as Westjet. Why is that? Sunwing has a large amount of money and employees on the hotel side of the business which Westjet has none of. Westjet has very different ventures from Sunwing and Sunwing is not an airline at its core, it’s a Travel group, which apart from Blue Diamond resorts and Nexus, Westjet (Onyx) now owns.

This is what everyone seems to forget. Sunwing airlines only ever existed to deliver the travel group their hotel guests at a cheaper and more controllable way
than wet leases. It was always a necessary evil for the travel group.

What does Sunwing bring to Westjet and their pilots?

- Western Canadian vacation flying will now be over 75% flown by Westjet, eastern nearly 40% and Canada wide the Westjet group will fly over 50% of Canadians down south, that is huge.
- Westjet has 117 737s Sunwing has 18, however brings winter business of 40 737s and a total pilot group enough to operate 33 aircraft. There will be a deficit of at least 7 aircraft and the crew required to operate them when they merge.
- Westjet should gain a 34% increase in winter block hours and only a 25% increase in pilot group size. That should create a defecit of approx. 100 captains and First Officers.
- Almost exclusively high credit legs
- Many more southern layovers
- Larger bases and an addition of at least one major eastern base (YUL)
- Hopefully many lifestyle gains in WJ CA3 with the help of former SWG union members for everyone’s benefit.
- The larger pilot group (Westjet) should gain relative seniority even if the outcome is not DOH
- Greater flying variety and more block hours in the system almost always equals better lifestyle and flexibility due to the sheer size of the bid package.
- The most important may simply be greater profit margins with vacation sales rather than simple airline fares, this will benefit both pilot groups in the merged airline in creating a more stable and consistently profitable company.

So many overly simplistic views.

But lets just look at 1 point.

No airline is going to get planes for a seasonal operation, that's what tour company airlines do. WestJet will not be adding 22 aircraft on a seasonal bases. Sunwing is bringing 18 planes based on WestJet's pilot to plane ratio for the narrowbody fleet Sunwing has about 200 pilots too many for the tails being added.

No - they wont add them on a seasonal basis....thats why they are buying more. During the low summer season - they will use them on other routes. There wont be a pilot surplus, at least not a large one. This winter will be a full seasonal fleet with 34 aircraft (16 TUI/Smartwings leases + our fleet) and the 10 Swoop planes. Same as last winter. That traffic will not disappear and the only reason we are doing the wet lease is that Westjet doesn't yet have the extra capacity (planes). They will eventually though.

[phenix]

80,000 block hours for 500 pilots is 320 block hours per pilot per year. That is a large pilot surplus at WestJet.
If WJ must buy planes and find new work during spring, summer and fall to accommodate SW pilots, then there is a pilot surplus

[boeingboy]

80,000 block hours for 500 pilots is 320 block hours per pilot per year. That is a large pilot surplus at WestJet.
If WJ must buy planes and find new work during spring, summer and fall to accommodate SW pilots, then there is a pilot surplus

Westjet isn't buying airplanes to accommodate pilots - they are doing it to cover the work needed.

Stuck looking for work spring, summer, and fall?? Sunwing operates it's Winter (40+ aircraft) season from Oct - May, and we still fly a minimum sched in the summer - but that only about 4 months. Hardly the situation your painting.

[phenix]

Let’s crush some numbers

80,000 block hours and 500 pilots is 27 block hours per pilot per month on average.
I don’t know how much a WJ pilot is blocked on average, but around 45 hours sounds like a very conservative guess. Meaning at WJ, 80,000 block hours gives a job to 300 pilots.

Regarding the tails, 1700 B737 pilots at WJ operate around 120 tails. Meaning 300 pilots would be operating 21 tails.

Maths say: the business brought (block hours) matches the tails brought (minus 3), and the pilots brought are on exceedance of 200. The seasonality factor is the only reason why more tails would be needed, but reallocating the existing fleet should be enough. Airlines are ran by number people.

[sarg]

No - they wont add them on a seasonal basis....thats why they are buying more. During the low summer season - they will use them on other routes. There wont be a pilot surplus, at least not a large one. This winter will be a full seasonal fleet with 34 aircraft (16 TUI/Smartwings leases + our fleet) and the 10 Swoop planes. Same as last winter. That traffic will not disappear and the only reason we are doing the wet lease is that Westjet doesn't yet have the extra capacity (planes). They will eventually though.

80,000 block hours for 500 pilots is 320 block hours per pilot per year. That is a large pilot surplus at WestJet.
If WJ must buy planes and find new work during spring, summer and fall to accommodate SW pilots, then there is a pilot surplus

Westjet isn't buying airplanes to accommodate pilots - they are doing it to cover the work needed.

Stuck looking for work spring, summer, and fall?? Sunwing operates it's Winter (40+ aircraft) season from Oct - May, and we still fly a minimum sched in the summer - but that only about 4 months. Hardly the situation your painting.

You seem to be stuck in a seasonal operation mentality. WestJet doesn't have a low summer season, summer block hours are the same as winter.

Sunwing doesn't operate those full 40 planes for that full Oct-May season either. It's a slow ramp up to probably December with the planes starting to leave by March. You're talking about a seasonal need of 3-4 months

[daedalusx]

Well then I guess Westjet can offer 50 hours blocks in the low season for the next couple of years until the fleet growth matches the staffing levels.

Who really wants to work 16 days at 3+ legs per day in the summer ?

[Oleo 4]

Gentlemen,

Positional arguments based on unknowns at this time is only adding fuel to the fire. Attempting to change a colleagues mind over web forums, chats, or text messaging is the wrong medium. WestJet's executive will determine the future business model for WestJet. What was true for both companies individually may not be the outcome when combined. WestJet was a Airline with a small Charter operation, Sunwing is a Charter operation with a small Airline attached to it. Regardless of number of pilots and airplanes, WestJet will always operate and utilize resources as efficient as possible. Block hours and days utilized will be in the contracted window - Period! We will all operate on the same colour tails and utilize the same socialized bidding system. What was is changing - change is always feared.

Underlying issues here is the fear of the unknown! Not knowing the outcome and a feeling of loosing control of ones career path on both sides as with any merger. The process will play out here shortly. We will all have to work together for the betterment of a single employer and our collective careers.

O

[Bede]

Gentlemen,

Positional arguments based on unknowns at this time is only adding fuel to the fire. Attempting to change a colleagues mind over web forums, chats, or text messaging is the wrong medium. WestJet's executive will determine the future business model for WestJet. What was true for both companies individually may not be the outcome when combined. WestJet was a Airline with a small Charter operation, Sunwing is a Charter operation with a small Airline attached to it. Regardless of number of pilots and airplanes, WestJet will always operate and utilize resources as efficient as possible. Block hours and days utilized will be in the contracted window - Period! We will all operate on the same colour tails and utilize the same socialized bidding system. What was is changing - change is always feared.

Underlying issues here is the fear of the unknown! Not knowing the outcome and a feeling of loosing control of ones career path on both sides as with any merger. The process will play out here shortly. We will all have to work together for the betterment of a single employer and our collective careers.

O

Excellent post.