Spying led WJ to switch airports

[Kip Powick]

WestJet Airlines Ltd. shifted its eastern hub to Toronto from Hamilton after stealing confidential data from Air Canada in an elaborate spying scheme, according to new court documents that show what forensic auditors uncovered on a WestJet co-founder's hard drive.

Air Canada, in the latest instalment in the corporate espionage case that has gripped the country's airline industry, filed new exhibits in support of its $220-million lawsuit against WestJet. Since the lawsuit was launched nearly 13 months ago, Calgary-based WestJet has repeatedly denied wrongdoing.

Last fall, Montreal-based Air Canada and a unit received court approval to hire H+A Computer Forensics Inc. to seize and analyze seven WestJet computers, including the hard drive belonging to Mark Hill, a co-founder and former vice-president of strategic planning who resigned from the airline last July.

"The defendants used the plaintiffs' confidential information in order to assist them in planning WestJet's change of its eastern base from Hamilton to Toronto," said an affidavit signed by Benjamin Smith, Air Canada vice-president of planning.

Amid much fanfare, WestJet announced in January, 2004, that it would shift its eastern hub to Toronto's Pearson International Airport from Hamilton's Munro International Airport -- which it did on April 18, 2004, entering the lucrative Toronto-Montreal-Ottawa triangle.

Mr. Smith said Mr. Hill stored "flight comparison reports" on his hard drive, compiling "a detailed comparison of WestJet flights at specific times between Montreal-Hamilton and Air Canada's flights at specific times on its Montreal-Toronto route."

Mr. Smith also said Mr. Hill gathered data on WestJet's Ottawa-Hamilton route compared with Air Canada's Ottawa-Toronto service.

Spreadsheets found on Mr. Hill's hard drive, entered as Exhibit C attached to Mr. Smith's affidavit, show detailed information on Air Canada's flights, including their so-called load factor -- the proportion of available seats filled.

The spreadsheets from November, 2003, use airport codes for Toronto (YYZ), Hamilton (YHM), Montreal (YUL) and Ottawa (YOW), and line by line, show which Air Canada flights were most popular and which didn't perform so well. For instance, Air Canada Flight 415 at 2 p.m. on Wednesdays in November, 2003, from Montreal to Toronto had 96.9 per cent of the available seats filled, compared with a load factor of 61.5 per cent on Air Canada Flight 401 at 7 a.m. on the same route, also on Wednesdays. Mr. Hill's reports contain details on individual flights, such as Air Canada's average seat capacity and load factors Monday through Sunday.

Air Canada launched its lawsuit against WestJet on April 6, 2004, when it named Mr. Hill as a co-defendant and alleged that he was the mastermind behind WestJet's snooping into Air Canada's special reservations website.

WestJet spokeswoman Gillian Bentley declined comment yesterday, saying the case is still before the Ontario Superior Court, but the carrier has said that Air Canada's internal website wasn't confidential, and flight information could be obtained by counting passengers boarding planes.

Previous court exhibits, introduced last year, included shredded documents retrieved from Mr. Hill's trash outside his home in the Victoria suburb of Oak Bay by private investigators hired by Air Canada.

Air Canada, which emerged from 18 months of bankruptcy protection last September, alleges that WestJet gained an unfair competitive advantage by hacking into the special website for Air Canada employees. None of the allegations has been proved in court.

Mr. Smith's affidavit accuses WestJet of "identifying and targeting the plaintiffs' most profitable flights and times and adjusting WestJet's schedule accordingly, planning WestJet's expansion into new routes and optimizing WestJet's revenue on specific routes."

In another document found on Mr. Hill's hard drive, he "seems to provide instructions that WestJet should reallocate aircraft on specific routes because Air Canada had load factors above 75 per cent on these routes from mid-March through mid-April, 2003," Mr. Smith said.

Those popular routes included: Vancouver-Montreal, Winnipeg-Montreal, Victoria-Toronto, Vancouver-Ottawa, Calgary-Montreal and Calgary-Victoria.

A third document found on Mr. Hill's computer compares WestJet's load factors with Air Canada's in the second quarter of 2003.

Mr. Smith alleges in his affidavit that WestJet's planning, bolstered by obtaining confidential Air Canada data, extended into the Atlantic, with WestJet carrying out Mr. Hill's recommendations to add afternoon Montreal-Halifax flights and Halifax-Montreal night service in September, 2003.

Two other WestJet co-founders -- chief executive officer Clive Beddoe and executive vice-president of guest service Donald Bell -- are also among the co-defendants.

[wizard]

Good stuff Kip.

[Guest directlaw]

"WestJet spokeswoman Gillian Bentley declined comment yesterday, saying ..... that Air Canada's internal website wasn't confidential,"

[AIP]

"WestJet spokeswoman Gillian Bentley declined comment yesterday, saying ..... that Air Canada's internal website wasn't confidential,"

Stand by for more of Clive distancing himself from MH and the whole mess.

Curious, still waiting for a link or two where this information might be found elsewhere.

Not a great defence Clive, either you are not being completely truthful or you were incompetent for not knowing what was going on. Waiting for selective amnesia to kick in, ala the sponsorship scandal, this has been smelling the same for quite awhile now too.

[Maverick]

Hmm, A flurry of bad press released by Air Canada against WestJet. Nothing new mind you, just a few selected pieces.....I guess AC's first quarter must be due for release soon! Any bets?

[beaverboy]

I was thinking the same thing. No new information, just the same old stuff. So any idea when AC will post their 1st quarter? Should be interesting.

[Guest directlaw]

Yup

Turn it into bad ole AC.....the evil empire.......come to the dark side Mav.

A flurry Mav.....looks like one release to me. Yesterdays stuff was yer own doing.

Yes there is new info.

Hard evidence on hard dives to back to back up allegations.

[Maverick]

Well, I guess that's settled then isn't it?

And you guys accuse us of a Kool-aid culture?

[AIP]

Hmm, A flurry of bad press released by Air Canada against WestJet. Nothing new mind you, just a few selected pieces.....I guess AC's first quarter must be due for release soon! Any bets?

Mav, I guess you missed another one of Clive's rants against AC after your poor results last week Eh, Or are you just choosing to ignore it.

How he ever came up with Open Skies being AC's way of having other carriers hurt poor ole WJ is way way beyond me. He has gone round the bend and should move on before he does more damage to WJ.

Funny though, WJ seems only interested in competition when it was them creeping up the ladder. The rant to the fed's shed some real light into the "culture" that is WJ.

I will give you credit, at least you are all on the same page in the hymm book.

[Flapsforty]

Well then,

Lets have a look at AC management hard drives. Do any of you for one minute think that AC has doesn't know what WJ, CJ, or SS loads are on particular flights on particular days? That's part of the Marketing departments job is to know what the competition is up to. There is nothing new in this article, there are still no conclusions drawn (Except by the forum court) and no judgement has been rendered.

Cheers.

[Guest directlaw]

"For instance, Air Canada Flight 415 at 2 p.m. on Wednesdays in November, 2003, from Montreal to Toronto had 96.9 per cent of the available seats filled, compared with a load factor of 61.5 per cent on Air Canada Flight 401 at 7 a.m. on the same route, also on Wednesdays. Mr. Hill's reports contain details on individual flights, such as Air Canada's average seat capacity and load factors Monday through Sunday."

If those numbers were lifted from AC's confidential website then yes this is news. It provides proof that the confidential info was used for financial gain.

No longer just an allegation.

[Guest rattler]

Mav, I guess you missed another one of Clive's rants against AC after your poor results last week Eh, Or are you just choosing to ignore it.

How he ever came up with Open Skies being AC's way of having other carriers hurt poor ole WJ is way way beyond me. He has gone round the bend and should move on before he does more damage to WJ.

Funny though, WJ seems only interested in competition when it was them creeping up the ladder. The rant to the fed's shed some real light into the "culture" that is WJ.

I will give you credit, at least you are all on the same page in the hymm book.

I think that the words to the song have changed since their last view of open skies. Is Mr Morgan still with Westjet???

Edmonton Journal, Jan. 27, 2004

U.S. wants to fly our skies

But WestJet would welcome chance to compete with American carriers for lucrative routes: official

Canadian Press

The U.S. wants to open the skies with new regulations that would allow its airlines to offer flights in Canada, while giving Canadian carriers access to lucrative new routes in the United States.

The proposal for cross-border free trade for North American airline companies is being pressed by U.S. Ambassador Paul Cellucci, who says Washington wants talks on liberalized aviation policies that would include allowing U.S. carriers to transport passengers between points in Canada.

The prospect of new competition in Canada was brushed off by a WestJet official, who says new opportunities in the U.S. would more than compensate.

"If the door was open we would try it -- I'm sure we would," said Tim Morgan, a senior vice-president with Calgary-based WestJet Airlines.

"And, I'm sure we would compete handily on those markets. The up side for us is that the fuel would be cheaper, and we would (receive) U.S. dollars by doing it."

[Flapsforty]

Direct Law,

A company does everything for finacial gain. That's what companies do. When you saw older articles about the lawsuit did you think or were you led to believe that WJ only knew the total number of pax out of YYZ? So again, I ask, what did you learn that you didn't already know? If you went to your marketing office (and they would give the info) don't you think they would know the loads for WJ 663 YYC/YYZ for the past 6 months?

Cheers

[AIP]

Direct Law,

A company does everything for finacial gain. That's what companies do. When you saw older articles about the lawsuit did you think or were you led to believe that WJ only knew the total number of pax out of YYZ? So again, I ask, what did you learn that you didn't already know? If you went to your marketing office (and they would give the info) don't you think they would know the loads for WJ 663 YYC/YYZ for the past 6 months?

Cheers

I am guessing that they might know if they cared.

BUT

I will guarantee you they do not know the loads and forecasted loads of flights in the FUTURE.

Hence the lawsuit, the rest of what you and otheres here are purporting is spin and nothing more (unless your prefer the term B.S.)

[Guest directlaw]

"A company does everything for financial gain. That's what companies do"

Yes but most companies draw the line at breaking the law.

"When you saw older articles about the lawsuit did you think or were you led to believe that WJ only knew the total number of pax out of YYZ? So again, I ask, what did you learn that you didn't already know? "

I was lead to believe that WJ had used AC's confidential info to plan their expansion/move to YYZ. I was also led to believe that WJ has also used this info system wide to increase their yields at AC's and the publics expense.

Both were and remain allegations.

What we learned today is that the confidential info was used.

Repeat it was used.....up until now we just assumed it was used. Now there is proof.

Westjets defense is or has been:

1) The site wasn't confidential

2) The info is available elsewhere

and

3) Even if the info is deemed to be confidential we didn't use it

Strike three

[Seeker]

Well then,

Lets have a look at AC management hard drives. Do any of you for one minute think that AC has doesn't know what WJ, CJ, or SS loads are on particular flights on particular days? That's part of the Marketing departments job is to know what the competition is up to. There is nothing new in this article, there are still no conclusions drawn (Except by the forum court) and no judgement has been rendered.

Cheers.

Hey Flaps, I'm still waiting for the judge to throw it out of court. Any chance you want to increase your bet?

seeker

[Arctic Ace]

"For instance, Air Canada Flight 415 at 2 p.m. on Wednesdays in November, 2003, from Montreal to Toronto had 96.9 per cent of the available seats filled, compared with a load factor of 61.5 per cent on Air Canada Flight 401 at 7 a.m. on the same route, also on Wednesdays. Mr. Hill's reports contain details on individual flights, such as Air Canada's average seat capacity and load factors Monday through Sunday."

If those numbers were lifted from AC's confidential website then yes this is news. It provides proof that the confidential info was used for financial gain.

No longer just an allegation.

"financial gain"???

Might want to take a look at WestJet's load factors on the triangle back when this all started. The way I see it - Air Canada owes WestJet.

[CanadaEH]

WestJet Airlines Ltd. shifted its eastern hub to Toronto from Hamilton after stealing confidential data from Air Canada in an elaborate spying scheme, according to new court documents that show what forensic auditors uncovered on a WestJet co-founder's hard drive.

Where in this article does it prove that allegation?

"The defendants used the plaintiffs' confidential information in order to assist them in planning WestJet's change of its eastern base from Hamilton to Toronto," said an affidavit signed by Benjamin Smith, Air Canada vice-president of planning.

*YAWN* Again, where's the proof in this article?

Mr. Smith said Mr. Hill stored "flight comparison reports" on his hard drive, compiling "a detailed comparison of WestJet flights at specific times between Montreal-Hamilton and Air Canada's flights at specific times on its Montreal-Toronto route."

Mr. Smith also said Mr. Hill gathered data on WestJet's Ottawa-Hamilton route compared with Air Canada's Ottawa-Toronto service.

Spreadsheets found on Mr. Hill's hard drive, entered as Exhibit C attached to Mr. Smith's affidavit, show detailed information on Air Canada's flights, including their so-called load factor -- the proportion of available seats filled.

The spreadsheets from November, 2003, use airport codes for Toronto (YYZ), Hamilton (YHM), Montreal (YUL) and Ottawa (YOW), and line by line, show which Air Canada flights were most popular and which didn't perform so well. For instance, Air Canada Flight 415 at 2 p.m. on Wednesdays in November, 2003, from Montreal to Toronto had 96.9 per cent of the available seats filled, compared with a load factor of 61.5 per cent on Air Canada Flight 401 at 7 a.m. on the same route, also on Wednesdays. Mr. Hill's reports contain details on individual flights, such as Air Canada's average seat capacity and load factors Monday through Sunday.

Ok, so there was a spreadsheet that showed "detailed information" (load factor) for flights in November, 2003, was compiled in November, 2003. That rules out any peeking into the future for loads theory..

I'm not defending where the information was taken from, but for all you Kool-Aid drinking AC employees in here there is nothing new in this article. You can make a mountain out of a mole hill if you want... or until the Puppeteer arrives to give the Puppets some ammo, or at the very least, a new catch phrase.

[newgirl]

CanadaEh

The new catch phrase is " Westjetiquette "

[FA@AC]

The prospect of new competition in Canada was brushed off by a WestJet official, who says new opportunities in the U.S. would more than compensate.

"If the door was open we would try it -- I'm sure we would," said Tim Morgan, a senior vice-president with Calgary-based WestJet Airlines.

"And, I'm sure we would compete handily on those markets. The up side for us is that the fuel would be cheaper, and we would (receive) U.S. dollars by doing it."

I too am sure that Clive would love access to the US market (as long as he was given the authority to decide what all of his competitors should charge and under what conditions other carriers should be permitted to operate on routes that Westjet flew).

Actually, Clive has been so visionary as a policy guru of late that I'm beginning to wonder if a career in politics is his future. If Westjet could find someone to replace him, perhaps Clive should become Harper's Transport Minister after the election.

[ceesix]

You know guys, from someone who has sat back and watched this whole soap opera unfold from the beginning and followed the diatribes from both sides, this is my humble take on it all (or as I so often see..IMHO...):

WJ..you're in some serious ka-ka and I would get that next quarter's earnings up cause you're gonna need it...

AC..I wouldn't skip Friday night mass just yet if I were you..keep on with the Hail Marys, lots and lots of 'em

Remember, this is simply IMHO....

[Fido]

...AC..I wouldn't skip Friday night mass just yet if I were you..keep on with the Hail Marys, lots and lots of 'em

....

I don't see the downside of continuing the court case for AC, even if they lose.

Right now it is costing WS about a million dollars a quarter in lawyers fees.

[ceesix]

I 1000% agree!

[FA@AC]

Westjets defense is or has been:

1) The site wasn't confidential

2) The info is available elsewhere

and

3) Even if the info is deemed to be confidential we didn't use it

You omitted one vital part of Westjet's defense:

4) Mark Hill has OCD.

[Flightlevels]

I don't see the downside of continuing the court case for AC, even if they lose.

Right now it is costing WS about a million dollars a quarter in lawyers fees.

that's right, AC is getting thier lawyers to work for free...not!