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WestJet CEO plots bigger (or smaller?) fleet


CanadaEH
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Np, and thanks all the same.

What I have heard a few times is that Volaris is finding its routes to the US to be a hard slog since AM offers a higher level of service, the US carriers offer FF bennies, and Volaris' fares are usually no less expensive. Interjet, watching this, has thus far held off on expansion to the US (though I hear they're going to try their luck on one or two routes), and has instead decided to focus on Mexico, Guatemala and Cuba. Are you able to comment on that? Pardon my curiosity, but since neither company publishes financial data there's almost nothing to read about commercial aviation in Mexico, and things there have gotten interesting since MX's demise.

This info is in the public domain so I can share it:

Recent Volaris US L/F's:

1Q 2011: 82.0%

2Q 2011: 78.7%

2Q ASM's were 48% higher than 1Q ASM's, at about 481.5m transborder asms in 2Q

Their focus, for the time being, is on Guadalajara, Mexico's 2nd largest city, to the US, and are, for the most part, dominating their routes. They also run flights from the US to MLM, TLC, ZCL, MEX and, in what is likely a preemptive strike, MTY from LAX.

In 2Q, Viva Aerobus had a very limited US sched, with just Houston and Las Vegas to Monterrey, with barely a total of 15,000,000 transborder asms. They operated with a 69.4% l/f.

Interjet was not in the US in 2Q 2011. They recently started SAT on Dec 1 2011 to compete against Aerobus.

Neither InterJet or Aerobus have announced any routes where they'd have to go head to head against Volaris.

B)

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This info is in the public domain so I can share it:

Recent Volaris US L/F's:

1Q 2011: 82.0%

2Q 2011: 78.7%

2Q ASM's were 48% higher than 1Q ASM's, at about 481.5m transborder asms in 2Q

Their focus, for the time being, is on Guadalajara, Mexico's 2nd largest city, to the US, and are, for the most part, dominating their routes. They also run flights from the US to MLM, TLC, ZCL, MEX and, in what is likely a preemptive strike, MTY from LAX.

In 2Q, Viva Aerobus had a very limited US sched, with just Houston and Las Vegas to Monterrey, with barely a total of 15,000,000 transborder asms. They operated with a 69.4% l/f.

Interjet was not in the US in 2Q 2011. They recently started SAT on Dec 1 2011 to compete against Aerobus.

Neither InterJet or Aerobus have announced any routes where they'd have to go head to head against Volaris.

B)

Interesting, thanks.

I had noticed that Volaris was beefing up on routes to the US that had been left vacant following MX's collapse more than it was entering transborder routes where it would go head to head with AM. If the Mexican airlines avoid stepping on toes of the others, maybe they'll each carve out a niche of some sort.

As for Viva Aerobus, I hear they're scary. :)

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"I've heard WJ has a plan for an internal structure but that WJPA was cold on the idea and wanted it as a separate entity "

If this situation moves forward and is executed as a seperate entity, I can assure you the WJPA will no longer be the voice for the pilots.

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As an outsider, I will ask a question. Not to stir any pot, because the WJ pot is a well-stirred pot. Always has been. That's how a great meal is served. Well-stirred.

While at C3, we had a pay structure that was universal and based strictly upon years-of-service. There was a Captain payscale and a First Officer payscale. It didn't matter what airplane one flew. The issue became contentious with the introduction of the A330 and subsequently the 340 as these were much larger types with much greater potential for company income. Some of us wanted to maintain the equalized payscale, but increased substantially due to the company's increased potential; others wanted a formula pay variable upon such things as aircraft type (narrow vs wide) and a few other items.\

My question is why WJ, if they are looking at a second type such as the Q400, wouldn't consider an equalized payscale for both the 73's and the D8? A few benefits would occur. Some may wish to leave the 73 to fly more domestic routes; some may wish to have a better schedule; some may like the higher paced turnarounds at smaller stations; some may like differences that some may like!! It would certainly prevent aircraft hopping. Mind you, a separate company can accomplish the same thing. But a separate company, if not deemed as common ownership, will have its own growth aspirations. Look at Jazz (er, excuse me: Air Canada Express) and the growing rift between them and the mainline. Will Jazz (sic) survive this rift?

It is beyond my comprehension (as an outsider) why such a successful management team would foster division within the ranks. It has been said that managing pilots is like herding cats. I hope the company hasn't grown so much that there has developed a "me me me" attitude within some of the pilot group that is SO prevalent at lesser airlines.

Lots of big questions!

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Is this really that complicated?

Call it Westjet Express. Paint the planes the same. Use the same pool of FA's. Hire more mtc and qualify them on both the 737 and the new aircraft. Add pilots as necessary and make the entry level position the right seat of the smaller aircraft (or left seat if there are unbid vacancies). Will it pay the same as the 737? Of course not. But there will be tons of applicants from Porter, Jazz, and Skyregional anyway. A couple of years on a WJ 'Q' in exchange for a WJ career will still attract many qualified applicants (but perhaps less in the 5000 hr range). The in-house cost structure must be within a credible range of what an outsourced operation would otherwise cost (recognising that by insourcing that no margin component is required). The only negatives are increased training expense and that the debt associated with the expanded fleet will go on the WJ balance sheet. The upside is control and the preservation of culture and product.

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The cost assosiated with moving a pilot up from the dash 8 to the 737 and then replacing the dash 8 pilot is far greater than simply hiring a 737 pilot,(or visa-versa in a downturn) so why would WJ not want to run it as a seperate entity, The rest of the employee groups can be multi aircraft certified (F/As and AMEs ) so for them there is no cost with having common employer, but not so with the pilots.

So as owners one would think that all employees (except the pilots) would endorse the plan. (tongue firmly in cheek :whistling: )

One question though... What does Alaska/Horizon do?

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You cannot have AMEs and FAs as a common employer and not the pilots. That would sink before it floated. Common employer is common employer for all. It is either a seperate company under some form of CPA to WJ or its the same company.

Moon. It's still Jazz. The company is Called Jazz Aviation Inc. Operating as Air Canada Express and Thomas Cook Canada.

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Moon said: "My question is why WJ, if they are looking at a second type such as the Q400, wouldn't consider an equalized payscale for both the 73's and the D8?"

I'm in full agreement with you Moon, I think it's the fairest and most "WestJetty" way to pay the pilots (yes, even if/when we eventually move to a LARGER fleet type).

-T9

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"The cost assosiated with moving a pilot up from the dash 8 to the 737 and then replacing the dash 8 pilot is far greater than simply hiring a 737 pilot,(or visa-versa in a downturn) so why would WJ not want to run it as a seperate entity,"

"Moving up" only exists when pilot pay is based on a given aircraft size. 'Moving across' types is consistent with a 'staus' pay system. Type ratings are not transferable, as far as I know? Therefore, all pilots transitioning to a new type within a corporation must complete the applicable full approved training program, regardless of 'past' experience.

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First time poster, long time lurker.

To T9,

I'm not sure if the status pay system is well understood or not (no offense to anyone, I'm not even sure I totally understand it) :Grin-Nod: I for sure would NOT want to see this implemented at WestJet with the acquisition of a Q400 fleet.

Here's why:

We are payed industry standard or some variation there of, assuming the Q400 drivers are also worth industry standard, the status pay formula works like this :Clever: (737 industry standard + Q400 industry standard) /2 = Status pay. Effectively a pay cut for all who are now working there.

Maybe down the road when the fleets are comparable in size, maybe it would be beneficial, or if a larger aircraft is added.

But for now for me no thanks.

My two cents

Cheers all :icon_jook:

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Westjet business practice seems to be:

1. It has to make sense

2. It has to make money

Paying the Q400 at current WJ 737 rates would not meet either criteria. Would the 737 pilots be willing to take a nominal pay cut (probably about $15/hr for Capt and $10/hr for FO fully implemented) to subsidise the Q400 pilots? If so, make it status pay. That presumes that the Q400 fleet never exceeds 20% of total fleet.

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Status pay belongs in a system where the fleet variations are relatively small or involve common type ratings (B757/767 or A320/A330). IMO it does not belong in a mixed fleet of regional turboprops and continental jets. I know that some Jazz folks will disagree with me.

That said, it can be sold to the pilot group when your fleet growth is in the form of an up-gauge. When you're down-guaging, you have a much tougher sales job ahead of you. For sure the company is not going to agree to pay B737 rates for a regional turboprop and while the WS pilot group may have a unique level of cooperation with their employer, that much of a give-back to achieve status pay is probably above even their level of generousity. It sure would be for me.

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Actually, the best place for status pay is in a company that has a variety of aircraft that can be effectively grouped into 2 or less pay categories. WJ effectively has such a system with 1 pay category that spans aircraft from 119-166 seats (with higher max seating capacity numbers applicable).

AC would be better served to use a model used by some US operators which have just 2 pay categories - widebody and narrowbody.

Jazz is a slight aberration on the concept with the addition of the 757. It will remain to be seen of it can withstand the test of time given the aircraft size disparity in the operating fleet.

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AC would be better served to use a model used by some US operators which have just 2 pay categories - widebody and narrowbody.

Yes, Air Canada (the corporation) would benefit greatly from grouping aircraft however the pilots would not. The savings produced need to be shared between the company and the pilots to offset the losses to lifestyle and career however the recent failed contract offer from the company, which had aircraft groupings, would have paid the pilots (on average) less than now. I'd be very happy to see the company save money on training but if I'm giving up significant bidding options and the company refuses to share the savings, well, why would I do that?

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With respect Seeker; if the Company was to place any savings directly realized as a result of type grouping etc into the pension deficits instead of executive bonuses, it might be a wise use of that cash? In that respect; both pilot & the shareholder would be winners.

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With respect Seeker; if the Company was to place any savings directly realized as a result of type grouping etc into the pension deficits instead of executive bonuses, it might be a wise use of that cash?

Oh yeah, I agree with that. Absolutely. The problem is that the company doesn't want to do this either.

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Sounds to me like WJ wants to have its cake and eat it too when it comes to labour.

'Sister company operating a single fleet of turboprops' implies a new entity with a separate Operating Certificate and separate employees which seems to assure WJ the benefit of 100% new employees starting at year 1 pay levels at Westjet Express. It also suggests no employee cross qualification or utilisation. Serves no purpose to hire and train and train/endorse a pilot or AME on the Q400 only to have them then transfer to a vacancy at WJ mainline so I wonder if employment portability will even be an option?

Looks like WJ may be trying to steal a page from the AC playbook.......aka Skyregional. Watch out Westjetters - this is how the cancer begins.

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It also suggests no employee cross qualification or utilisation. Serves no purpose to hire and train and train/endorse a pilot or AME on the Q400 only to have them then transfer to a vacancy at WJ mainline so I wonder if employment portability will even be an option?

Looks like WJ may be trying to steal a page from the AC playbook.......aka Skyregional. Watch out Westjetters - this is how the cancer begins.

There are provisions for transfer between the two operations.

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I'm more in favour of doing it in-house than contracting or buying another airline (i.e. Porter). Hopefully we can learn from everything that isn't working at AC/Jazz/Sky Regional and make this work from the get-go. At least Westjet is doing it the right way by engaging its employees.

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