Be Ready

[Dronepiper]

How is back to work legislation for AC pilots illegal?

[Mostly Harmless]

Sounds like you should just look for another job elsewhere, would be a lot less stressful for you.

Lol. Sounds like the "Get off the bus" speech back in the day. I mean, why improve things when you can just leave, right?

If you don't work at WJ anymore, why would you care?

[Dias]

How is back to work legislation for AC pilots illegal?

In January 2015, the Supreme Court of Canada recognized that a union’s right to strike is an “indispensable component” of collective bargaining, and therefore is protected under the Canadian Charter of Rights and Freedoms. This recent 5-2 decision in Saskatchewan Federation of Labour v Saskatchewan (Saskatchewan Federation of Labour) was a fundamental change from the Supreme Court's initial 1987 interpretation on the Charter’s freedom of association, that said, where unionized employees were concerned, freedom of association was limited to a right to form and maintain a union.

[lostaviator]

Is that you GGG?

(Referencing the just leave remark)

[Tdicommuter]

Aerobod

I value a good counterpoint, or devil's advocate argument but I will have to disagree with most of what you are saying.

The idea you have about what can be afforded is paramount why Canadian pilots are getting paid peanuts compared to other countries. Our raise is untenable to the company. A 50 percent raise to WS pilot wages would do what exactly to the total cost of the airline? I read several articles talking about home owners mortgages increasing by 50 percent and how will people afford it. But a jump 50 percent jump from 3percent becomes 4.5 percent.It's actually incrementally small to the overall business. If you are really concerned and knowledgeable about WS and what Onyx can afford please tell me the exact figure that WS pilots salary represents in the budget, and what the proposed would become.

Did you ever hear a delta, Alaska , american pilot be concerned about their costs? Have you heard teachers or construction workers worry about their affect on the company? We do not participate in the board meetings, or share the laurels of platitude after long days... But what we can, and should do is tell them how much we cost to make them money. Personally my earnings, and savings are being eaten away and it's not ok. If you want to get an MBA and sit across the table from the pilots and tell us why we aren't worth the money fill your boots, but then don't pretend to be one of us in the meantime. Change will only start to happen once we acknowledge the things we worry about should stop at the flight deck. Everything else doesn't pay our bills. I've never heard of a line pilot collect a cheque for watching out for the companies bottom line.

[Airbrake]

There is a precedent set for how WS has responded to a strike vote, look at what happened to the CSA’s. They voted to strike then there was a deal hammered out. I can’t remember the cost associated with that vote (it was stated during some video of the execs), but I’ll be confident in saying the impact from a pilot stroke vote would be significantly higher.
So it’s possible there could be a prolonged strike, but I am not convinced of that yet.

[aerobod]

Is that you GGG?

(Referencing the just leave remark)

You fail in your assumption, sorry. I’m sure his is enjoying his retirement with the odd highly paid board attendance these days.

[aerobod]

Aerobod

I value a good counterpoint, or devil's advocate argument but I will have to disagree with most of what you are saying.

The idea you have about what can be afforded is paramount why Canadian pilots are getting paid peanuts compared to other countries. Our raise is untenable to the company. A 50 percent raise to WS pilot wages would do what exactly to the total cost of the airline? I read several articles talking about home owners mortgages increasing by 50 percent and how will people afford it. But a jump 50 percent jump from 3percent becomes 4.5 percent.It's actually incrementally small to the overall business. If you are really concerned and knowledgeable about WS and what Onyx can afford please tell me the exact figure that WS pilots salary represents in the budget, and what the proposed would become.

Did you ever hear a delta, Alaska , american pilot be concerned about their costs? Have you heard teachers or construction workers worry about their affect on the company? We do not participate in the board meetings, or share the laurels of platitude after long days... But what we can, and should do is tell them how much we cost to make them money. Personally my earnings, and savings are being eaten away and it's not ok. If you want to get an MBA and sit across the table from the pilots and tell us why we aren't worth the money fill your boots, but then don't pretend to be one of us in the meantime. Change will only start to happen once we acknowledge the things we worry about should stop at the flight deck. Everything else doesn't pay our bills. I've never heard of a line pilot collect a cheque for watching out for the companies bottom line.

The overall salary cost is close to 25% of the CASM, based on the last public info, the pilot salary is the largest of all the groups at 25% of that. The issue is not just pilot salary, but the overall pressure on salaries of all groups based on pilot salaries. A pilot salary increase of 50% will put pressure towards that amount from other unionized groups and probably accelerate the leaving of some key non-unionized workers, too, if they don’t get substantial raises. Current industry labour availability is limited, so let’s say the pilots get 50% over 4 years and the other groups through labour unrest or just voting with their feet and leaving drive 30%. The overall upward pressure on CASM will be about 8.8%. Doesn’t sound like much, but it has basically moved the company from profit to loss based on the pre-Covid financials.

The issue is that WS is not AC, but much between AC and the ULCCs, still very much an LCC at heart. AC can support a higher CASM than WS and still be profitable due to the much higher RASM due to its strong business products income. Therefore WS costs including wages have to be lower compared with AC to compete on the same routes, but certain costs such as fuel, aircraft ownership, maintenance, airport and nav costs are fundamentally the same between the companies. The only more flexible costs are wages, not offering a service and seat density. Not offering a service is something that can be done for non-business bare bones tickets, as can the seat density be increased in the cheap seats.

Looking at RASM and CASM (in Canadian cents) for AC and WS the last year that we have publicly available WS data and before Covid distorted the data:

AC 2019 Q1-Q3 RASM=17.1, CASM=15.4, stage length 1758 miles
WS 2019 Q1-Q3 RASM=15.19, CASM=14.05, stage length 869 miles

The thing is, we need to adjust for stage length to directly compare. This curve may vary, but from various sources, realistic adjustment factors can be found here: https://speednews.com/article/7233

0.359 stage length adjustment index for WS (interpolated)
0.257 stage length adjustment index for AC (interpolated)

If WS is used for the reference stage length, then the AC RASM and CASM has to be multiplied by 0.359/0.257 to compare, i.e. RASM=23.89, CASM=21.51

So if we take the same flight at the 869 mile stage length using a 737-8 with 16J153Y for AC and 12J162Y for WS, we multiply the RASM and CASM by the total number of seats and miles to get the flight revenue and cost:
AC=$35,085 revenue, $31,590 cost
WS=$22,968 revenue, $21,244 cost
Although the AC cost numbers are high relative to the WS numbers, they will be somewhat closer now due to their fleet average age getting younger since 2019 and WSs getting older, this represents a bigger problem to WS going forward, as the RASM gap is unlikely to have moved as much, with the exception of the completion of full J seat rollout since 2019. The biggest cost difference between the two is the amount of money AC puts into the business product and associated Star Alliance membership, lounges, Aeroplan, etc.

At the 80% load factor AC could sell 122 Y seats at $120 and 13 J at $1,573, WS 130 Y seats at $120 and 10 J at $737 to match these average flight revenue numbers, where they both compete directly on economy ticket price, but the superior AC business product can be sold at a premium (based on their real revenue numbers, not my assumptions).

If WS increases its cost base (CASM) by the aforementioned 8.8%, but can’t offer a premium business product at AC prices, it will be in a loss position. Building this product and gaining market acceptance is something that will likely take at least another 5 years, but is unlikely to happen now without better frequency between Canadian cities and International destinations and WS is just too small relative to AC to gain a realistic market share with the right coverage of routes.

Therefore WS is not in a position to increase its cost base without a major change in business product offering to compete directly with AC without making a loss, therefore it isn’t really a direct AC competitor.

As a reference point, Flair has quoted a CASM in the 2018-2019 timeframe of 10.0 (to compare with the above figures), Swoop was also meant to be close to this, so for a 189Y 737-8 config they have a cost base of $16,424 for this average flight config and typically run a higher load factor, so assuming 90% load factor, they could sell 170 seats and be profitable at less than $100 per seat.

I expect the whole Canadian Airline industry will see upward pressure on wages, but I can’t see WS being able to offer AC wages and be profitable due to the lack of a strong business product. When comparing other countries, the Canadian airline CASMs aren’t too different when comparing comparable airlines, but the RASMs are generally higher due to the more favourable passenger cost environment with lower ticket non-fare costs for airport, nav and other operating costs covered by the governments there, hence the perceived high cost of tickets in Canada putting pressure downwards on the RASM and making increased CASM more of a problem.

The bottom line for increased airline employee wages in general is either to convince the public to pay for more infrastructure cost through the government and not ticket add-ons, or just ask them to pay higher ticket prices, but the net effect of doing that is lower demand, as the proportion of GDP allocated to travel typically doesn’t change that much.

[lostaviator]

The above post is correct - WJ is not AC.

However, the bigger issue is that WJ is not… anything?

If WJ fails, it will be due to a lack of product identify - not paying employees a fair wage.

If you were to ask an executive (pick one, any one because I can’t keep track of who’s actually here anymore) I bet none could explain our product offering in a single sentence.

AC = Premium Product
Flair = No Frills Product
WJ = We’ll charge you 10k for a pod to get to Canada where you’ll enjoy premium offerings with Rocky Mountain soap in the lavs. Then you’ll get the sore back and no sink experience on our fleet of Q400’s. But that’s this weeks experience, we’ll probably change our mind before your actual flight. We hope you like surprises!

A company without a well defined product is doomed. We don’t know who we are anymore or what market segment we serve.

This place spent years attracting pilots to the company with the promise of wide bodies and a more premium product.

The revolving door of executives will destroy this place long before giving us a proper CA will. In fact the destroying may already be well underway.

[Canpilot7]

This isn't a shot, but I worry it'll read like one.

But hopefully having a non-pilot that doesn't work at westjet, but that has incentive for the pilots to not make gains.... isn't ENTIRELY convincing for most. That's not to accuse anyone of lying or discussion in bad faith. For pilots with a vested interest at any carrier, they'll also consistently try to shine the light on the topic in a certain manner.

Now, the idea that CASM math is a sufficient financial modeling projection to say WestJet goes bankrupt with X% increase in pilot wages I would argue is flawed. There's a reason the world needs so many analysts. The number of changes to the business that could be used to ensure a competitive product with higher labor costs (albeit minimal considering the small amount pilots make relative to the price of getting a 737 airborne every day) is almost limitless. That kind of market analysis with any kind of certainty.... done by one's self...pays well enough that no one would be needing travel benefits ever again.

[lostaviator]

And let’s not forget the words of arbitrator WK - “I am of the view that Air Canada is the appropriate comparator”. He went on to list a few caveats mentioning AC is more established, has had more CA’s… But the meat of that statement is important to remember.

[averageatbest]

For wages versus operating costs, here is a rough breakdown by aircraft type. I understand that my fuel flows may be off by a bit as I used a single flight plan for each type to calculate rough burn in Long Range Cruise and High Speed Cruise.

Fuel price changes of +/- 10% result in roughly -/+ 1% change in the cost of pilots as a percentage of the total cost (fuel + crew).

My napkin math analysis is that if the company is unable to compensate to the North American standard, they are not in a position to continue operating.

[aerobod]

My napkin math analysis is that if the company is unable to compensate to the North American standard, they are not in a position to continue operating.

This may be the right answer, something that Onex has to take into consideration in whether to cut their losses on the now significantly depreciated asset they have in WS since they purchased it. Overall WS has aged in terms of employees and equipment increasing costs (the WS mainline average fleet age at 11.2 years increased past AC mainline's decreasing 10.1 years sometime during Covid), without the cushion of a good Business Travel income, they are being squeezed on all sides because of this.

I’m trying to think worldwide of an example of an LCC that has matured into a carrier with Network/Legacy Carrier levels of RASM since airline deregulation happened in a given market. JetBlue is getting there but hasn’t made it yet. WS has been trying but hasn’t made any substantial headway. I think the market is just too small in Canada for 2 network carriers.

[Mostly Harmless]

Hey WestJet pilots…..all you need to know is Air Canada pilots are rooting for you! We are going to be in the same boat this year. Time to have some pilot unity. Go get ‘em!

Thanks for the support. I really do appreciate it and I will be there for you when the time comes.

[Loon-A-Tic]

Hey WestJet pilots…..all you need to know is Air Canada pilots are rooting for you! We are going to be in the same boat this year. Time to have some pilot unity. Go get ‘em!

Thanks for the support. I really do appreciate it and I will be there for you when the time comes.

Ok I'm calling the bluff on this one. WHEN in the history of Canadian aviation has one pilot group stepped up in support of another in a strike, let alone from a competing airline. The management teams know this, count on this and revel in the knowledge of.

PLEASE, PLEASE someone prove me wrong, PLEASE

[Mostly Harmless]

Ok I'm calling the bluff on this one. WHEN in the history of Canadian aviation has one pilot group stepped up in support of another in a strike, let alone from a competing airline. The management teams know this, count on this and revel in the knowledge of.

PLEASE, PLEASE someone prove me wrong, PLEASE

[Loon-A-Tic]

Ok I'm calling the bluff on this one. WHEN in the history of Canadian aviation has one pilot group stepped up in support of another in a strike, let alone from a competing airline. The management teams know this, count on this and revel in the knowledge of.

PLEASE, PLEASE someone prove me wrong, PLEASE

They are not Canadian, look like Delta pilots to me. All ask it another way, when has a Canadian pilot group refused to cross another Canadian picket line in support of a strike mandate ?

[Mostly Harmless]

Quick question for Aerobod. If the WJ group of companies, and Onex, are so tight on margins and profit that pilots wages will bankrupt the company, why/how did they buy another airline (Sunwing)?

I am going to stay and fight for a better life, offering the executives the opportunity to accept and embrace change. If the executives decide to burn the place to the ground, well, I have a lovely bag of marshmallows I will roast over the fire before doing exactly what the executives will do; go to another company and start the whole process over again.

Since AC needs to hire as many pilots as WJ has, I am not worried about my career prospects should WJ decide to self destruct rather than pay what the market demands.

As for the pilots wages and their effects on the other employee groups; Not My Problem. The executives of the company made it very clear a long time ago that we no longer have a voice in how the company is run, what decisions are being made, how those decisions affect us, and that we are a liability not an asset. We are not owners anymore.
The core business of WJ is an airline. Without pilots it is impossible to have an airline. This is now the reality of running an airline in Canada, the company who has the pilots win. Swoop is already unable to recruit because everyone else pays more.

The day I see the executives say, "We are overpaid and are lowering our wages" is the day I will believe the argument that wages will down the company. I don't begrudge an executive for making a money until they are reaching into my pocket and taking my money to paying themselves.

They can fight it all they want but, the wages will rise.

[Mostly Harmless]

They are not Canadian, look like Delta pilots to me. All ask it another way, when has a Canadian pilot group refused to cross another Canadian picket line in support of a strike mandate ?

I just pulled the first picture on the google search. Go and do your own search. There were pilots from many other airlines on the line that day.

[Loon-A-Tic]

They are not Canadian, look like Delta pilots to me. All ask it another way, when has a Canadian pilot group refused to cross another Canadian picket line in support of a strike mandate ?

I just pulled the first picture on the google search. Go and do your own search. There were pilots from many other airlines on the line that day.

So you don't have an answer; just noise, sort of says it all about Canadian pilot unity.

[aerobod]

Quick question for Aerobod. If the WJ group of companies, and Onex, are so tight on margins and profit that pilots wages will bankrupt the company, why/how did they buy another airline (Sunwing)?

I am going to stay and fight for a better life, offering the executives the opportunity to accept and embrace change. If the executives decide to burn the place to the ground, well, I have a lovely bag of marshmallows I will roast over the fire before doing exactly what the executives will do; go to another company and start the whole process over again.

Since AC needs to hire as many pilots as WJ has, I am not worried about my career prospects should WJ decide to self destruct rather than pay what the market demands.

As for the pilots wages and their effects on the other employee groups; Not My Problem. The executives of the company made it very clear a long time ago that we no longer have a voice in how the company is run, what decisions are being made, how those decisions affect us, and that we are a liability not an asset. We are not owners anymore.

The core business of WJ is an airline. Without pilots it is impossible to have an airline. This is now the reality of running an airline in Canada, the company who has the pilots win. Swoop is already unable to recruit because everyone else pays more.

They can fight it all they want but, the wages will rise.

Covid changed a lot, messed up the previous direction, allowed the ULCCs to gain a strong foothold. I think WS may have been able to follow the JetBlue evolution without Covid, now they have cost and revenue challenges that are not nearly as controlled as before due to the nature of the current labour market for all employees and the accumulated debt from lack of operations during Covid shutdowns, but without the relief from fixed costs. Fortunes can change very quickly, I think WS and the pre-Covid strategy had a decent future, now I think it is uncertain. I encourage others to bring forward their whole analysis of the company’s financial position, as opposed to just looking at specific points in isolation.

I’m glad (as I’m sure are many others) that the Onex deal crystallized my substantial (for me) share holdings, if Covid had hit 3 months earlier, Onex may not have completed the deal, I couldn’t see myself holding WS shares at the moment, if it was still publicly traded.

[skyhighh]

Ok I'm calling the bluff on this one. WHEN in the history of Canadian aviation has one pilot group stepped up in support of another in a strike, let alone from a competing airline. The management teams know this, count on this and revel in the knowledge of.

PLEASE, PLEASE someone prove me wrong, PLEASE

They are not Canadian, look like Delta pilots to me. All ask it another way, when has a Canadian pilot group refused to cross another Canadian picket line in support of a strike mandate ?

Here you go… these are Air Canada pilots. I personally know a couple on this picture. It was only 5 years ago and the WestJet pilots were well aware of their brothers/sisters support. Either you’re too new to remember or have a short memory. Cheers.

[Loon-A-Tic]

They are not Canadian, look like Delta pilots to me. All ask it another way, when has a Canadian pilot group refused to cross another Canadian picket line in support of a strike mandate ?

Here you go… these are Air Canada pilots. I personally know a couple on this picture. It was only 5 years ago and the WestJet pilots were well aware of their brothers/sisters support. Either you’re too new to remember or have a short memory. Cheers.

So what tells you they are AC, at least the other guys are wearing their uniform in solidarity. I don't see an "identifying" feature on any of your AC pilots. By the way, if young is 35 years of Canadian commercial aviation it must be my memory I guess.

[Airbrake]

Quick question for Aerobod. If the WJ group of companies, and Onex, are so tight on margins and profit that pilots wages will bankrupt the company, why/how did they buy another airline (Sunwing)?

They used Kestral (MidCo) shares for the purchase. There was no cash that changed hands from what I was told.

[skyhighh]

Look at the picture I attached (not the one from MH). And I personally know 2 of them, you can take my word for it but one of them was actually a nationally elected ACPA (P4C) guy until recently.
Must be your memory then… That’s okay, mine isn’t what it used to be either, I woke up this morning not knowing where I was