ANALYSIS: ALPA warns of strike as WestJet readies Swoop
The union representing WestJet’s pilots has warned of a possible strike on 19 May, marking further escalation of a labour battle made contentious by WestJet’s plans to launch ultra-discount unit Swoop.
Despite pressure from the union, WestJet’s new chief executive Ed Sims has remained steadfast in the need for WestJet to get into the ultra-low-cost market as soon as it possibly can.
“We need to launch the airline as soon as possible. Every day we don’t have that airline in operation is a day we ask our guests to go down the lane to a … a competitor,” he told FlightGlobal on 20 April.
On 25 April, the Air Line Pilots Association, International (ALPA) announced it had asked pilots to vote on whether they approve of strike against WestJet, according to ALPA.
A chief unresolved issue: WestJet’s plan to staff Swoop’s cockpits with pilots who do not currently work for the company and who are not covered by the union.
“Unfortunately, [WestJet] believes there is no issue with outsourcing our work and our careers. They expect us to just stand in place, be grateful to work for the company we helped build, and be willing to accept terms that are substandard compared to our peers,” ALPA representative Rob McFadyen says in an ALPA release.
A federally-required 60-day period of WestJet-ALPA conciliation ends on 27 April. Then follows a 21-day required cooling-off period, after which pilots can strike, ALPA says.
“Pilots are still open to negotiating… during this period,” adds McFadyen.
“A strike authorisation vote is a common step by unions in context of the overall labour negotiation process,” says WestJet’s Sims in a statement. “We remain focused on successfully negotiating an agreement that will benefit our pilots and WestJet.”
Even Air Canada commented, saying it is “ready to adjust its schedules and capacity to limit disruptions for the travelling public” should WestJet pilots strike.
WestJet pilots had not been unionised until May 2017. ALPA and WestJet have been negotiating a pilot contract for eight months, Sims tells FlightGlobal.
But during that period, WestJet advanced a plan to launch ultra-discount unit Swoop, with the first flight scheduled to depart on 20 June. Swoop will operate 189-seat Boeing 737-800s.
WestJet has said it intends to pay Swoop pilots wages in-line with other ultra-low-cost carriers – in other words, less.
WestJet’s initial plan called for those pilots to come from WestJet or regional subsidiary Encore; they would transfer to Swoop under WestJet’s “leave of absence” policy, former chief executive Gregg Saretsky said in February.
ALPA stomped that idea, filing an unfair labour practice complaint with the Canadian Industrial Relations Board. That board sided with the union, ordering WestJet on 2 March to abandon the leave of absence idea.
In the days that followed, WestJet underwent a management overhaul, with Sims, formerly executive vice-president of commercial, replacing Saretsky as CEO.
Some analysts viewed the move as a board effort to smooth over or reset relations with pilots.
Sims told FlightGlobal on 20 April that ALPA wants Swoop pilots covered under a contract. But WestJet has concern about keeping Swoop’s costs in check, he said.
Sims said he is “determined to keep a CASM gap” between Swoop and WestJet, and between Swoop and other carriers like Air Canada.
Therefore, Swoop will launch 20 June with non-WestJet pilots.
“We will launch with newly-hired pilots,” Sims said. “My preference is those aircraft one day be flown with WestJet [crew].”
WestJet’s discussions with pilots have been broad because the parties negotiating the deal from scratch, according to Sims.
“When you do a first negotiation, everything is on the table,” he says. “There’s a lot of recent history and a lot of ancient history that’s brought to the negotiation.”
ALPA could not immediately be reached to comment about negotiations.
Sims says he has stressed to the union the importance that the contract reflect the market in which WestJet operates, noting that customer drive across the US border to catch flights on US-based discounters like Allegiant Air, Frontier Airlines and Spirit Airlines.
WestJet has sought to demonstration to pilots “the economic rationale” behind Swoop, while also stressing that “the biggest danger for WestJet is not developing our own ULCC”.
“[Pilots] are looking at this first negotiation as an opportunity to operate Swoop with no distinction,” says Sims. “We have a different view. We have taken, effectively, a more cautious approach by bringing in Canadian pilots from overseas.”
In addition to US discounters, WestJet competes against Air Canada and that company’s discount Rouge unit, and faces threats from a prospective start-up out of Vancouver called Jetlines.
Then there is Flair Airlines, an already-operating ULCC that launched scheduled flights as NewLeaf Travel Company in 2016.
Flair has largely flown under the radar, but has continually expanded, having recently added routes to several cities, including places like Calgary, Halifax, Prince George, Saskatoon and Victoria, FlightGlobal schedules data shows.
Sims also has an eye trained on a certain Arizona-based private equity company called Indigo Partners, which is run by former Spirit board chair William Franke.
In addition to having ties with Jetlines, Indigo holds order for 430 Airbus A320-family aircraft. Though non-Canadian carriers will reportedly operate those aircraft, the existence of such a large order gives Sims pause.
“I’m trying to make Canada one of the less-attractive options because of the level of competitive opportunity, rather than looking like a soft underbelly,” he says.