The startup cargo airline within the Canadian passenger carrier WestJet could be forced to suspend operations barely a month after launching commercial service if the company and its pilots can’t reach agreement on a new contract by Friday.
WestJet Group on Monday issued a lockout notice to pilots in response to a 72-hour strike notification from the Air Line Pilots Association. The union said about 1,850 pilots plan to walk off the job at 3 a.m. ET on Friday, effectively grounding all aircraft.
“The decision to issue a lockout notice, in response to the actions taken by the union today, was not one that was made lightly, and we sincerely regret the inconvenience and uncertainty this continues to cause for our guests,” said WestJet CEO Alexis von Hoensbroech. “It is our responsibility to ensure the safety and complete control of our network at all times, to minimize the risk of stranding our guests, our crews and our aircraft. Our commitment and priority remains at the bargaining table, where we will continue to work around the clock to come to a reasonable agreement as soon as possible, in an effort to prevent labor action.”
Calgary-based WestJet said it is beginning preparations to operate a reduced schedule and will work to manage cancellations as smoothly as possible.
Parties in airline bargaining talks are required by Canadian law to give 72 hours before they can take unilateral action to apply economic pressure on the other side. Tuesday is the first day pilots can legally strike after federally mediated talks failed to resolve differences and a 21-day cooling-off period ended.
The pilots complain the airline is trying to reduce costs by driving down wages and refusing to implement flexible schedules to allow for a better work-life balance. They are also seeking more job security. ALPA said WestJet is losing about 30 pilots per month and could lose up to 20% of its experienced pilot cohort within the next year. That is a refrain heard from many pilot groups locked in collective bargaining. But many airlines are facing attrition for reasons that include hiring competition as airlines recover from COVID, normal retirement rates and fewer people choosing piloting as a career, and it isn’t easy to discern exactly why pilots leave a specific company.
The union said the parties have made progress on most noncost items but remain far apart on other issues.
“After nine months of negotiating, management still fails to understand today’s labor market conditions, leading to a mass exodus of our pilots in search of better work opportunities, and more will follow if this agreement does not meet our pilots’ needs,” said Capt. Bernard Lewall, chair of the WestJet ALPA Master Executive Council. “Without the economic and job security improvements our pilots require, WestJet will be parking planes, as they will not have enough pilots to operate them or accomplish its own growth strategy.”
WestJet management said it has made a “generous” contract proposal that would make its first officers and captains the highest-paid narrowbody pilots in Canada and addresses concerns about job security and the ability to outsource flying to regional carriers.
“Despite efforts to be reasonable and provide significant improvements to the current contract, the union maintains its expectation of closing in towards U.S.-like wages, despite living and working in Canada. This expectation is not reasonable and is impeding the WestJet Group’s ability to reach an agreement in advance of the upcoming long weekend,” the company said.
Both sides said they will continue to negotiate this week.
Cargo impact
The impasse is another blow to WestJet’s fledgling all-cargo unit, which can’t seem to catch a break in its initial rollout. Customers that utilize the company’s three Boeing 737-800 converted freighters or the passenger network to move goods will be equally affected.
WestJet Cargo said it is still accepting bookings after Friday, but a shutdown could strand cargo in the system and cause shipping delays. The freighters operate between four Canadian cities, as well as to Miami and Los Angeles.
WestJet Cargo’s freighter business, a joint venture with aviation services company GTA Group, has had a rocky start. The company originally planned to launch service last summer and was caught off guard when Transport Canada took 10 months longer than expected to approve Boeing’s cargo-related modifications to the planes’ structural design. Meanwhile, a fourth freighter is taking longer to convert because it’s from WestJet’s own passenger fleet and required different changes than the ones acquired by the lessor from previous operators.
Stan Wraight, president and CEO of consultancy SASIWorld and a resident of Canada, said WestJet Cargo should be able to get past a temporary disruption without material harm.
“I am convinced calmer heads will prevail and a union agreement will happen. As most Westjet senior executives are non Canadians I hope they understand this is not Europe or the USA and sensitivities are different. Their freighter market entry is so fresh, I doubt any harm will come to their positioning if a strike does occur,” he said. “Every airline gets a honeymoon period to sort things out if your clients are convinced of the longer-term benefits.”
CEO von Hoensbroech is from Germany and previously led Austrian Airlines and Lufthansa Cargo.
WestJet and Unifor, the union representing the company’s employees at Toronto Pearson International Airport, recently finalized the first collective bargaining agreement between the organizations. The agreement takes effect June 1.
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Contact Reporter: ekulisch@freightwaves.com
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