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Saretsky gone!


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At age 58 he did not retire. This is what getting fired looks like. GS was carrying around his anti-ALPA sentiment from Alaska.

He started a civil war with the WJ Pilots and with the recent CIRB ruling, the SWOOP rollout date is at serious risk.

All he had to do was be reasonable and that was apparently asking too much.

The new WJ CEO has a big mess to clean up.

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32 minutes ago, rudder said:

 

The new WJ CEO has a big mess to clean up.

Could be a face-saving maneuver - they couldn't cave-in on their position with regards to negotiations so replace the CEO and he can start with a new position.  Doesn't look as bad.

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1 hour ago, internet said:

How **bleep** must CB had been with how Greg handled all this?  

Clive doesn't pop in every once in a while to see how things are going at WestJet.  He's got his hands on everything that transpires.  It's just that he only likes his name and face attached to the good stuff and likes to take shelter for the messier stuff.

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Without a doubt, this is not a normal retirement, which would have begun with an announcement in conjunction with annual results or the annual meeting, and would have come with a bit of advance notice, i.e. a transition period of 45-120 days. It's not quite like a firing to me, more like everyone, including Saretsky, agreed that the labor situation is best handled with someone else in charge and there is no point having a "transitioning" period. If he wanted to stay and fight ALPA, the board probably handed him a sack of gold coins and told him to disappear ASAP.

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The Official News Release from WestJet. https://www.newswire.ca/news-releases/gregg-saretsky-retires-from-westjet-676230643.html

Gregg Saretsky retires from WestJet


News provided by

WESTJET, an Alberta Partnership

06:30 ET

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Ed Sims appointed new President and CEO

CALGARY, March 8, 2018 /CNW/ - WestJet today announced Gregg Saretsky, President and CEO, has advised the time has come for him to retire from the company. Having found his successor, he has agreed with the company that his retirement will be effective immediately.

Ed Sims, newly appointed WestJet President and CEO (CNW Group/WESTJET, an Alberta Partnership)
Ed Sims, newly appointed WestJet President and CEO (CNW Group/WESTJET, an Alberta Partnership)

"For the past eight years, it's been my privilege to lead team WestJet through a tremendous period of growth and success," said Gregg Saretsky. "I am pleased with the continued growth and profitability we've achieved together. With plans well underway for the launch of Swoop and the introduction of the 787-9 Dreamliners on the horizon, as well as the great work WestJetters do each day, I'm confident WestJet will continue to grow to the next chapter and beyond."

"Gregg has taken WestJet to new heights during his tenure and the airline would not be in the strong position it is without Gregg's business knowledge, drive and work ethic, and his focus on low costs," said Clive Beddoe, WestJet Board of Directors' Chair. "On behalf of the board, we sincerely thank Gregg for all of his contributions to WestJet. We wish him well in his retirement."

Mr. Saretsky joined WestJet in June 2009 as Vice-President, WestJet Vacations, before assuming the role of Executive Vice-President, Operations, in October 2009. In March 2010, he assumed the role of President and CEO. Under Mr. Saretsky's leadership, WestJet experienced its most significant growth period: the entire fleet nearly doubled ine size, WestJet Encore was launched, the first code-share partnerships were introduced, wide-body aircraft were introduced and service to Europe was started, as well as the introduction of the WestJet Rewards program, including the WestJet RBC World Elite MasterCard, which has become the fastest-growing, award-winning loyalty and affinity card program in the country.

"I am proud of the many great things we have accomplished together during my time as President and CEO, and I wish WestJet well in the next chapter of its growth and evolution," said Gregg Saretsky.

Current Executive Vice-President Commercial, Ed Sims, will assume the role of President and CEO beginning today. Mr. Sims has also been appointed to the Board of Directors effective immediately.

"I am honoured by the opportunity to assume the role of President and CEO, and believe strongly in WestJet's next global chapter and the growth potential ahead," said Ed Sims. "In my time at WestJet, I've been inspired by the team's ability to care from the heart while acting like owners. WestJet has a strong challenger's spirit, and I'm thrilled to be able to lead the team onward. I thank Gregg for his leadership, and for setting the foundation for WestJet's global evolution."

Mr. Sim's career spans more than 30 years in the tourism and aviation industries, encompassing airlines and tour operators, as well as air traffic control. He has worked in the European and Australasian markets, holding senior commercial and general leadership positions with Tui, Thomas Cook, Virgin Groups and Air New Zealand where he led the international wide-body business. Before joining WestJet as Executive Vice-President, Commercial, in May 2017, he was CEO of Airways, New Zealand's air navigation service provider.

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Perhaps not as big a sack of gold coins as you think, particularly if the WJ BOD was suggesting the alternative to retirement was to be discharged for cause.

SWA dealt with the unionisation of almost 100% of its workforce without the ignorance and ineptitude being demonstrated by the current WJ senior administration.

Times are changing. The days of westjetitude, sharing the success, and ‘employees are the owners’ are over. The WJ BOD and senior management have made it clear that it is just about shareholder return. Long term employees have expectations that cannot simply be satisfied by ESOP. Coming from a fully unionised carrier (AS), GS should have been capable of managing WJ through the evolving labour situation. Instead, if you look at the shoddy labour relations history at AS under GS, one perhaps had a preview of the anti-union bias that GS brought with him. 

Perhaps a bigger question here is who else in the WJ decision making hierarchy shares this bias? CB? Others?

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I see posts on another site that, now that he has resigned, things will go back to the good old days and it is time to dump ALPA.  I guess some folks are enjoying their morning coolaid.  The real question is "How long" before a fix is devised , will the wide body purchase be delayed / cancelled and will Swoop really take off in June.

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The problem on the ‘business’ side at WJ is that it must devise ways to increase revenue as cost creep will erode yields in a static revenue environment. As growth in the core 737 network was no longer feasible, Encore (for a time) accomplished this objective. And now that Encore growth possibilities are also lessening, WB international routes and revenue may be all that is left for WJ to exploit.

SWOOP is just a distraction. It is at best a defensive initiative and will likely cannabilize existing WJ revenues notwithstanding that WJ plans to limit the SWOOP hubs to secondary airports collocated with major population centres. It is more likely that there is also a hidden agenda to migrate work from WJ to a lower cost SWOOP operation.

Unionisation. Expansion. ULC competition. Rouge. All challenges that are facing WJ senior management. GS was not up to the task. But he was not alone. Guess that CB did not want to fire himself.

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3 hours ago, rudder said:

At age 58 he did not retire. This is what getting fired looks like. GS was carrying around his anti-ALPA sentiment from Alaska.

He started a civil war with the WJ Pilots and with the recent CIRB ruling, the SWOOP rollout date is at serious risk.

All he had to do was be reasonable and that was apparently asking too much.

The new WJ CEO has a big mess to clean up.

Make no mistake this was a long time coming but allowed to drag on 2 long in the opinion of many. Prior to his replacement ES being brought in, two internal EVP's were also auditioning for the GIG but were unsuccessful. I think I called this about 18-20 months ago and was off by about 6-8 months. Expect to see at least 2 EVP changes before the end of the year. At the risk of p$@*ing off a few pilots, you and the ALPA were not the sole reason GS is gone today although it is definitely a contributing factor. You see, GS was successful in delivering on a number of initiatives, but it was how he did it and the fallout from how he did it that cost him his job. He ran out of EVP's and VP's ( I am sure several of them are smiling today as some very good people got ran out)to throw under the bus and at some point when you take on that role the only one left for the mess to stick to is you. Stripping the company of its culture, leaving anyone who has any sense of how it used to be at WS feeling worthless, crappy employee surveys, FA lawsuits, 767, Successful union attempts, Crappy handling of relationships with pilots starting swoop will be the things GS is remembered for  (anyone else add to the list?)and Ed Simms will have the opportunity to be the guy that turned WS into an international airline.

 

Jury is still out on ES as much like GS, now that the beauty contest is over and once the honeymoon is over we will see what to truly expect. Can only hope he has learned a little over the last few months about how not to do things at WS so as to get everyone rowing in the same direction again. If he has not WS will continue down the path of no differentiation an looking more just like everyone else.

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“ Cost Creep “ was a distraction of why casm went up. Having the largest q400 fleet in a country with 35 million people was the root problem. Large planes lower casm small planes raise casm.  Offering low fare tickets on a plane that requires high yields was foolish. There is no such thing as a low cost turbo prop operator! GS’s justification for the q400’s was that they needed smaller planes to feed larger planes. The problem was that WJ stumbled on the large plane implementation. First hint of trouble was when WJ asked Bombardier for a delay in deliveries, and they refused. Four 767’s (doing work of 3), static 737 fleet and over 40 q400’s. Do the math, CASM increase. Swoop won’t help as it might have lower cost but also lower revenue. Most labour groups on frozen wages and or below market. Cost creep is minimal at best. Successful wide body growth is the only way out of this. Along with successful management.

 

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Growth strategies are the air carriers Achilles heel; the method increases competition, which can be a good thing, but only if the market has tremendous potential, otherwise, casm will go up. Even worse, the moment the economy burps casm will begin to rise sharply, which quickly places a debt bound carrier in a bit of a spot and at risk of becoming an endangered species.

 

 

 

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10 hours ago, Green **bleep** said:

“ Cost Creep “ was a distraction of why casm went up. Having the largest q400 fleet in a country with 35 million people was the root problem. Large planes lower casm small planes raise casm.  Offering low fare tickets on a plane that requires high yields was foolish. There is no such thing as a low cost turbo prop operator! GS’s justification for the q400’s was that they needed smaller planes to feed larger planes. The problem was that WJ stumbled on the large plane implementation. First hint of trouble was when WJ asked Bombardier for a delay in deliveries, and they refused. Four 767’s (doing work of 3), static 737 fleet and over 40 q400’s. Do the math, CASM increase. Swoop won’t help as it might have lower cost but also lower revenue. Most labour groups on frozen wages and or below market. Cost creep is minimal at best. Successful wide body growth is the only way out of this. Along with successful management.

 

Ahhh! A voice from the past! Great analysis **bleep** !

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The Globe and Mail has some analyst commentary on the change at the helm.

Quote


Citing the abrupt departure of Chief Executive Officer Gregg Saretsky and a reduction in first-quarter revenue per available seat mile (RASM) guidance, Raymond James analyst Ben Cherniavsky downgraded his rating for WestJet Airlines Ltd. (WJA-T) to "market perform" from "outperform."

"After sitting on the sidelines for the better part of three years, we elected to upgrade our WestJet rating to Outperform earlier this year [on Jan. 12]," said Mr. Cherniavksy. "With the stock trading near the same level today, we are downgrading back to a Market Perform rating … We don't take such seemingly capricious flip-flops lightly, but believe that this is the most prudent course of action given renewed uncertainties and our ability to 'get out even' on this call. We remain of the contrarian view that this stock is very washed out, but we see few near-term positive catalysts on the horizon with the possibility of more negatives ones to come. Visibility remains poor as a number of important issues highlighted below need to be resolved. While new leadership offers a fresh start, we need to understand what this change means for WestJet's strategy going forward."

The analyst called WestJet's plans to launch Swoop, a new ultra-low-cost carrier (ULCC), a complex and "particularly polarizing initiative," emphasizing a "tense" dispute with pilots, who see it as an extension of the current fleet while management aims to hire non-unionized pilots.

"All of this, we believe, proved to be the proverbial straw that broke the camel's back, triggering the change in leadership announced [Thursday]," he said. "We are hopeful that the new CEO, Ed Sims, will navigate a mutually-acceptable agreement, but we can't be certain at this point. With Swoop playing a key role in our decision to upgrade the stock in January, we prefer to see how the dust settles on this important issue over the next few months."

Further on Mr. Saretsky's dismissal, Mr. Cherniavsky said: "The abrupt departure of Gregg Saretsky brings to mind a meeting we had with him early in his tenure (2010) where he discussed his ambitious plans to change WestJet's strategy. We recall him telling us of a YouTube video titled Shift Happens, which is a high-impact visual essay about how quickly our world is changing. Mr. Saretsky was sharing this video with his fellow WestJetters at the time as a means of compelling them to embrace the inevitability of change or get out of its way. Ironically, eight years later, it appears to be Mr. Saretsky who was the victim of change. In our view, the board's decision to replace him is an acknowledgement that WestJet's ambitious strategies to grow the airline, explore new markets, penetrate new segments, expand and diversify the fleet, and offer a host of new 'frills' and services has taken its toll on the airline's once-prized culture. The culmination of all this stress was, in our view, the decision among the pilots to form a union last year … which had followed a number of previous fallouts between labour and management over the years."

With the announcement of the departure, the airline also reduced RASM expectations for the first quarter to an increase of 2.5-3.5 per cent, falling from 4.5-5.5 per cent. Domestic ASMs are projected to grow 5.5- 6.5 per cent, dropping from 7.5-8.5 per cent.

"The culprit is bad winter weather which severely impacted operations leading to a series of cancelled flights," said the analyst. "Although such disruptions are clearly evident in the OTP statistics for both of Canada's airlines recently, we remain hyper-sensitive about the need to get RASM up in light of rising fuel costs. This setback, in our view, will call into question these trends and WestJet's renewed goal to deliver margin expansion this year. … WestJet failed to deliver its margin expansion goals last year, making the achievement of the same goal this year paramount to management's credibility. There may be a new chief in charge, but the focus for investors remains the same: after five long years of share price underperformance, WestJet's financial performance must improve."

Mr. Cherniavksy dropped his target price for WestJet shares to $25 from $31. The average target on the Street is currently $27.21, according to Thomson Reuters data.

 

 

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WESTJET CEO ABRUPTLY EXITS

Silence on Saretsky feeds rumours

  • Calgary Herald
  • 9 Mar 2018
  • DEBORAH YEDLIN Deborah Yedlin is a Calgary Herald columnist dyedlin@postmedia.com
getimage.aspx?regionKey=Gx2ZTO%2fG7jvXgc9r601%2bdA%3d%3dJIM WELLS Gregg Saretsky, left, and Clive Beddoe, chairman of the Board of Directors of WestJet Airlines. The company’s shares have risen 85 per cent since Saretsky took over in 2010. After the former CEO’s exit was announced Thursday, the stock closed down $1.15 or 4.6 per cent at $24.15.

Chief executive Gregg Saretsky’s sudden departure from WestJet, followed by the airline’s silence on the matter, raises many questions and answers none.

Saretsky, whose exit was announced before sunrise Thursday, has been replaced by Ed Sims, a 30-year industry veteran who joined the company last May as executive vice-president, commercial.

“Gregg is busy with transition work, wrapping up final details and is unavailable for comment,” was the airline’s response to an interview request.

“Ed (Sims) won’t be providing media statements today either, as he is meeting and speaking with multiple stakeholders, with WestJetters as his first priority. Once he has had an opportunity to accomplish this and review the priorities with the executive team, he will be able to speak with media.”

WestJet has prided itself on its transparency with all stakeholders — employees, investors and the Calgary community. Its past CEOs — Clive Beddoe, Sean Durfy and now Saretsky — have been seen making announcements on flights, helping the cabin crew with beverage service and even cleaning the aircraft upon arrival.

Thursday’s response was entirely counter to WestJet’s outward-facing philosophy.

It should have held a conference call, if not before markets opened, then immediately after they closed to offer more clarity.

The lack of communication only leaves outsiders to speculate.

From a public relations perspective, that Saretsky’s last day of work coincided with the related news release — rather than laying out a planned time frame for his departure — suggests a high level of discord.

In the world of governance, the most important task of any corporate board of directors is to hire and fire the CEO.

In the absence of any clarity Thursday, the immediate conclusion drawn is that Saretsky was shown the door.

Such decisions are not taken lightly and most often involve discussions over several months. Any decision to remove a CEO is also done at considerable expense. The last thing a company wants is to find itself in court over disputed compensation.

But before that, the board needs to be sure a succession plan is in place. Sims’ hiring last year was not telegraphed as a succession plan.

While his experience is heavily weighted to international markets — where WestJet sees its future — it wasn’t clear he was being groomed to take over from Saretsky, who, at 58 years of age, didn’t appear short on energy.

“This is highly irregular on a number of levels. The suddenness of the announcement. The finality of it, the immediacy of it, the lack of line of sight on the future,” Adam Pekarsky, founding partner of executive search firm Pekarsky & Co., said in an interview.

“The announcement really didn’t set the successor up for success ... such as providing a description of Ed’s credibility or his background.”

Saretsky certainly faced some challenges at WestJet as the company grew, which inevitably caused a change to the company’s folksy corporate culture. For example, no longer was it possible to have crews located only in Calgary and bases were established in key markets across the country.

But there is no disputing the fact Saretsky took the airline to new heights. He leaves as it’s transitioning from a low-cost carrier to one that is a network carrier with a global reach.

Not only did WestJet reach code share agreements with 16 different airlines, it also established 27 interline agreements — all aimed at being able to fly passengers well beyond Canada.

The company’s overseas expansion plan began with some turbulence due to reliability challenges with the Boeing 767 aircraft it purchased from Australia’s Qantas Airlines. Next year, it will start taking delivery of 20 Boeing 787 Dreamliners, which will allow WestJet to offer flights to Europe, Asia and South America.

Saretsky also oversaw the establishment of WestJet Encore, a regionally focused subsidiary flying into smaller airports across the country, and the soon to be launched Swoop, which will take a page out of the ultralow-cost carrier models of Ryanair and easyJet.

Pilots on the main line and Encore have unionized, and just this week the airline had its wrists slapped by the Canadian Industrial Relations Board over its hiring practices for Swoop. There were also ongoing issues regarding a lawsuit launched by a former flight attendant alleging the company failed to provide a harassment-free workplace for its female employees.

In January, the Supreme Court of British Columbia refused to throw out a class-action lawsuit that accuses the company of fostering a culture that tolerates harassment.

It’s no secret labour issues have been a challenge and it’s fair to ask the question whether this was a factor in Saretsky’s departure.

WestJet shares, which have risen 85 per cent since Saretsky took over from Durfy in 2010, sold off on Thursday. The stock closed down $1.15 or 4.6 per cent at $24.15.

Some of that decline was likely due to the lack of clarity around Saretsky’s sudden retirement, which was not hinted at during the company’s most recent investor day in late 2017.

One need only refer to the announcement at the Cenovus investor day last June, when its CEO, Brian Ferguson, announced he would leave the company in October as to how things could have unfolded.

The immediacy of Saretsky’s departure, coupled with WestJet’s lack of communication, leaves many questions.

In today’s world, it means WestJet does not have control of the narrative over a change at the top, which is not good for its brand.   

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