Well that didn’t take long for Swoop FA’s to unionize

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aerobod
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by aerobod »

Mr. North wrote: Tue Jul 17, 2018 10:56 am That's all very sensible aerobod but that still doesn't rectify the fact that Swoop is using WestJet resources to operate. I know plenty of people in other mainline departments now taking on Swoop work. As JJJ mentioned, as long as Swoop is contracting services from the parent company for pennies on the dollar they can easily point to Swoop as being the most profitable airline ever (thereby deserving growth at the expense of mainline).

Most WestJet pilots understand the business reasons for Swoop. However the way it's structured allows for whipsaw which simply cannot be tolerated.
Swoop has to pay mainline rates for any work mainline does for them (although they don’t have to pay a profit markup) and if they can find a lower cost provider, they will take them.

My detailed experience is with IT systems, only about 5% of mainline IT systems are used by Swoop (mainly maintenance systems charge-backs and shared airport systems), Swoop has to also pay the salary of the relevant mainline IT people, approximately 5 FTEs on top of their own IT people. They don’t get anything for free, they have to pay the economic rate when economy of scale of shared services makes sense.

This is one of the reasons the airport staff in general, head office building, res system and call centre don’t utilize mainline resources, as mainline’s cost was higher than Swoop could get elsewhere, bearing in mind mainline could only offer more complex processes and systems than a ULCC needs, Swoop could get the necessary service elsewhere.

Swoop has been designed fairly pragmatically and should continue with more pragmatic decisions to ensure they meet the 7c ex-fuel target that is competitive against other ULCCs.

The rumour mill is rife with mis-information, if you are not getting your information direct from those who own the service, then I would treat it as suspect.
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Transonic
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by Transonic »

I think many will understand the reasoning behind having Swoop as a seperate company but what is not acceptable was using another OC. You can have all the above commercial initiatives but WestJet 737s are flown by WestJet pilots.

Now we have a mess of two seperate training systems, two SOPs and all the costs associated with a seperate OC plus bypass pay. This does not sound very ULCC.

The reasoning for a seperate OC was entirely to circumvent ALPA. That didn't happen.
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by aerobod »

Transonic wrote: Tue Jul 17, 2018 1:11 pm I think many will understand the reasoning behind having Swoop as a seperate company but what is not acceptable was using another OC. You can have all the above commercial initiatives but WestJet 737s are flown by WestJet pilots.

Now we have a mess of two seperate training systems, two SOPs and all the costs associated with a seperate OC plus bypass pay. This does not sound very ULCC.

The reasoning for a seperate OC was entirely to circumvent ALPA. That didn't happen.
The separate OC was not because of ALPA, it is basically to give significant operational and fiscal flexibility in the future. The debate on whether Encore should have had the aircraft type added to the WestJet OC or be on a separate OC was no different than the Swoop OC debate. Keeping them separate allows each entity to be sold or taken public in their own right in the future, amongst other things. Not having a separate OC makes it almost impossible to segment the different operations in the future, if that is something that is decided strategically will happen. Again, people like Harry, Barb or Candice can provide further insight into corporate decisions and why things are setup the way they are, if you get a chance to bump into them at the campus, or ask questions on Yammer that I'm sure they or their designates will be glad to answer.
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by cloak »

aerobod, thanks for the informative posts. As you say Westjet is becoming a full network airline with its codeshares, full service and multiple class, whereas Swoop will defend the rear and generate some new traffic too. Between the two and added tails and wide body, new duty regs and extra crew, there will be plenty of new opportunities at Westjet group.
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Re: Well that didn’t take long for Swoop FA’s to unionize

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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by altiplano »

aerobod wrote: Tue Jul 17, 2018 3:54 pm Keeping them separate allows each entity to be sold or taken public in their own right in the future, amongst other things. Not having a separate OC makes it almost impossible to segment the different operations in the future, if that is something that is decided strategically will happen.
You say that like it's a good thing...

Allows them to play you all off one another better to.
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by aerobod »

altiplano wrote: Thu Jul 19, 2018 7:30 pm
aerobod wrote: Tue Jul 17, 2018 3:54 pm Keeping them separate allows each entity to be sold or taken public in their own right in the future, amongst other things. Not having a separate OC makes it almost impossible to segment the different operations in the future, if that is something that is decided strategically will happen.
You say that like it's a good thing...

Allows them to play you all off one another better to.
It is a strategic decision, pragmatically arrived at. Understanding why by talking to the people who are close to the decision will put it in context, otherwise it is easy to descend into paranoia by reading things into a decision that didn’t and don’t exist.
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FL410AV8R
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by FL410AV8R »

The decision may have been strategic but the lead up to it and the motivation behind it was as far from pragmatic as it could possibly be. Super charged emotion and bruised egos played a major part.

I, and a significant number of my peers do not trust this executive team. Their track record is mediocre at best and they collectively have destroyed the morale at a company I thought it was impossible to do that at. They have cut to the bone and beyond and incredulously wonder why employee groups are unionizing as fast as they can. Delusional springs to mind.

They have to stop just talking the talk and actually have to walk the walk. A new service introduction without a PR disaster would be a good start, that and owning your mistakes and learning from them as opposed to blaming everyone else for your poor execution. Oh yea and stop being so effing cheap, there is a significant difference between cost conscious and plain old cheap.
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by aerobod »

FL410AV8R wrote: Fri Jul 20, 2018 1:18 am The decision may have been strategic but the lead up to it and the motivation behind it was as far from pragmatic as it could possibly be. Super charged emotion and bruised egos played a major part.
The analysis and decision on Swoop's format, OC, cost structure, etc was based on input from dozens if not hundreds of people, it was pragmatically arrived at and formed the input for the Exec to "sell" to the rest of the company, the rhetoric during the selling job was certainly egotistical on all sides of the argument after that, but I'm a pragmatic person and know from the teams that provided the input into the decision, that there was a great deal of analysis and soul searching on how to compete with the new ULCC entrants attempting to enter the market.
FL410AV8R wrote: Fri Jul 20, 2018 1:18 am I, and a significant number of my peers do not trust this executive team. Their track record is mediocre at best and they collectively have destroyed the morale at a company I thought it was impossible to do that at. They have cut to the bone and beyond and incredulously wonder why employee groups are unionizing as fast as they can. Delusional springs to mind.
There is a mutual lack of trust in many areas of the company, which is an unfortunate side effect of company growth. This has been the case for the last 10 years, I believe this happens to most companies when passing through about 5000 employees, as there is another layer of separation added between employees that causes communications problems and distortion. No airline has managed to avoid unionisation of the pilot group when they are employees, when growing to the size WestJet is now. Unionisation has certainly been seen as inevitable at some point from the Durf era onwards. Another issue is that a very large number of employees (perhaps the majority) see the pilot group as entitled and not pulling in the same direction as they are trying to do to make the company successful, as can be seen in some of the Yammer and previous WestNet discussions. Exec changes happen due to lack of meeting targets, and there has been recent turnover, but WestJet has been very consistent in it's growth (by design) and has had reasonable profitability with 52 consecutive quarters in profit (who else in the industry has managed this consistency?), this is down to the current Exec and is a fundamental requirement in gaining the investment grade status that so few airlines have. I would argue that the company morale is as good as at most airlines and other billion dollar plus companies (this is borne out by the WHY survey results that still positions WestJet significantly above other companies, but no longer at the very top), but it feels like everything has gone to crap from the inside, whereas in reality it has just become more normal from an industry perspective. The problem is in how to get back to the top of the top quartile instead of the top of the third quartile.
FL410AV8R wrote: Fri Jul 20, 2018 1:18 am They have to stop just talking the talk and actually have to walk the walk. A new service introduction without a PR disaster would be a good start, that and owning your mistakes and learning from them as opposed to blaming everyone else for your poor execution. Oh yea and stop being so effing cheap, there is a significant difference between cost conscious and plain old cheap.
I wouldn't say service introductions are major PR disasters across the board (service changes have been introduced without issues, such as Rewards program revamp, MAX introduction, LOPA changes), but there have been too many that have been problematic, in my opinion due to trying to do too many things at the same time. Ed seems to be very aware of this problem and has cancelled or put on hold major initiatives with the aim of gaining control of project delivery.

Plain old cheap is core to the heart of the original WestJet culture, vis in the "good old days" office supplies were never bought, but pens were acquired from staying in hotels, team building events were never on work time but held as social events, aircraft grooming was always done with out grumbling, WestJetters auditioned for roles in ad campaigns and pot-lucks were the norm for team gatherings as opposed to the company catering them. CASM was the edge that WestJet used to have over direct competition, the result of keeping it low through "cheapness" was good profit share cheques and good stock price for a great retirement fund, it is now close to the competition so that edge has been lost. So be it if costs stay the same as everywhere else, people get paid a higher base wage and little from an incentive payment perspective, but the fiscal edge has then been lost and the incentive to push harder is not there any more. You can't have it both ways - "the good old days" and "give me the money now and cost be damned".
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Transonic
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by Transonic »

aerobod wrote: Thu Jul 19, 2018 8:30 pm
altiplano wrote: Thu Jul 19, 2018 7:30 pm
aerobod wrote: Tue Jul 17, 2018 3:54 pm Keeping them separate allows each entity to be sold or taken public in their own right in the future, amongst other things. Not having a separate OC makes it almost impossible to segment the different operations in the future, if that is something that is decided strategically will happen.
You say that like it's a good thing...

Allows them to play you all off one another better to.
It is a strategic decision, pragmatically arrived at. Understanding why by talking to the people who are close to the decision will put it in context, otherwise it is easy to descend into paranoia by reading things into a decision that didn’t and don’t exist.
Thanks for the input aerobod. It's well appreciated.

I find it difficult to understand you can "pragmatically" conclude that circumventing unionized labour is low risk. This during a time when an Air France executive had his shirt torn off by a angry mob over the start of Joon.

The decision of a separate OC and therefore separate labour group resulted in the 91% strike vote. Even Gregg in the Q4 conference call stated that "bad things happen when you violate scope clauses" and that we had a "virtual scope clause" with our pilots.

The pragmatic solution would have been to work with your existing labour groups and not bypass them.
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by aerobod »

Transonic wrote: Fri Jul 20, 2018 6:41 pm
aerobod wrote: Thu Jul 19, 2018 8:30 pm
altiplano wrote: Thu Jul 19, 2018 7:30 pm

You say that like it's a good thing...

Allows them to play you all off one another better to.
It is a strategic decision, pragmatically arrived at. Understanding why by talking to the people who are close to the decision will put it in context, otherwise it is easy to descend into paranoia by reading things into a decision that didn’t and don’t exist.
Thanks for the input aerobod. It's well appreciated.

I find it difficult to understand you can "pragmatically" conclude that circumventing unionized labour is low risk. This during a time when an Air France executive had his shirt torn off by a angry mob over the start of Joon.

The decision of a separate OC and therefore separate labour group resulted in the 91% strike vote. Even Gregg in the Q4 conference call stated that "bad things happen when you violate scope clauses" and that we had a "virtual scope clause" with our pilots.

The pragmatic solution would have been to work with your existing labour groups and not bypass them.
The separate OC was determined the best part of a year before ALPA certified, as part of the decision on the best way to setup Swoop to respond to the ULCC threat. It is unfortunate that it became the centre of the union issues. I’m sure Gregg thought he could work through the issues, but the effect on labour of having a separate OC was only a small part of the decision, unfortunately timing is everything and it ended up being a red flag in front of a bull. The reasons for having a separate OC are still sound, effectively giving Swoop a very independent capability to run their own operation as they see fit, diverging significantly from the way WestJet operates.

From my perspective (at least before I moved into Retiree state last quarter) one specific example of how a separate OC was beneficial is the setup of Trax. Everything is compartmentalised for Swoop, using slimmed down processes and parts inventory just for 189 seat 737-800s, governance and documentation is simplified and not polluted by the far more complex mainline requirements and things as simple as email and audit trail in Office 365 can be accomplished at 10% of the cost compared with mainline. The overall knock-on effect of the separate OC, with simplified and very reduced IT requirementsis across the board is that Swoop IT costs less than half the cost of mainline IT per ticket (which itself is only about 2/3 of industry average for legacy airlines).
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Re: Well that didn’t take long for Swoop FA’s to unionize

Post by Lt. Daniel Kaffee »

Is that you MrBean????
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