Finaly!

Blastor · Post by **Blastor** » Sun Mar 06, 2005 10:25 am

Airlines gear up fare wars

Airlines gear up fare wars

Jetsgo expands in west: WestJet leads price chopping in bid to protect share

Chris Sorensen
Financial Post

Wednesday, March 02, 2005

Travel agents say their customers are reaping the rewards of the battle to control Canada's skies.

That is particularly the case in Western Canada, which is set to become awash in commercial jet traffic this summer -- largely due to expanded service in the region by Jetsgo Corp.

Travel agents say Jetsgo's increased focus on the West, revealed late last week, has drawn an immediate response from Calgary-based WestJet Airlines Ltd., which has said it intends to protect its market share with aggressive fares.

"You can definitely see the drop in pricing in the last couple days," said Chris Shellard, who manages a travel agency in Vancouver. "I just booked someone to Calgary on WestJet 10 minutes ago. I think the fare was $58 each way.

"That's really cheap."

In fact, Jetsgo, Air Canada and WestJet all dropped their lowest fares from last week by about 20% on key routes, with even bigger reductions occurring in Western Canada, according to a survey released yesterday by Desjardins Securities.

WestJet led the pack with a 24% reduction in fares on its busiest routes. It's currently advertising fares to Western Canadian cities that are as much as 57% cheaper than they were one week ago.

Examples of WestJet's fare reductions (one-way) include:

- Winnipeg-Calgary down 36% to $83 from $130;

- Vancouver-Calgary down 38% to $58 from $93;

- Vancouver-Edmonton down 57% to $79 from $184.

"It was quite surprising," said Nadi Tadros, a Desjardins analyst. "It could very well be in anticipation of Jetsgo's arrival."

Jetsgo, on a growth streak for the last three years, said beginning in mid-April it will add Regina to its network, expand capacity on existing Western Canadian routes and launch 12 daily flights between Vancouver and Calgary, one of WestJet's original routes when it launched in 1996.

Meanwhile, Air Canada is going ahead with a plan to shift more of its domestic business over to Jazz, its lower-cost regional carrier, while Halifax-based CanJet Airlines will soon begin flying between Toronto-Calgary and Toronto-Vancouver.

"With these kinds of things it usually means a price war," said Allison Eaton, a spokeswoman for Flight Centre, a travel agency with 110 locations in Canada.

But while that would be good news for consumers, it is rarely positive for the industry, which is also suffering from sky-high fuel prices. And nobody knows the pain better than WestJet.

The airline, which last month posted its first quarterly loss, received another blow yesterday when Ben Cherniavsky, a Raymond James analyst, downgraded his rating on WestJet's shares to "underperform." Mr. Cherniavsky is now one of three analysts who are recommending people stay away from WestJet's stock.

Shares of WestJet, which closed yesterday at $10.80, down 23 cents, on the Toronto Stock Exchange, have dropped more than 20% since the beginning of the year.

In a research note, Mr. Cherniavsky said what finally "tipped us into the bear camp" were higher fuel prices, increased competition in WestJet's backyard and the growing likelihood that privately held Jetsgo will not disappear before the busy summer travel season.

Jetsgo has denied rumours it is in financial trouble.

© National Post 2005

Still like working for peanuts?

Canus Chinookus · Post by **Canus Chinookus** » Sun Mar 06, 2005 10:56 am

So I see that you have to start 2 threads now... what's next the same thread in every forum?

Flightlevels · Post by **Flightlevels** » Sun Mar 06, 2005 12:17 pm

gee blastor my t4 was WELL over six figures after just 4 yrs. is that not enough or is it still peanuts...lol. loser.

maxofthenorth · Post by **maxofthenorth** » Sun Mar 06, 2005 1:27 pm

So why did Jizgo pull out of YXX again Blastor?

Blastor · Post by **Blastor** » Sun Mar 06, 2005 1:47 pm

At first glance, WestJet looks, well, stingy: the airline pays employees below industry averages. At Air Canada, for instance, a starting captain earns about $80,000 annually. At WestJet it's $60,000. Yet there are millionaire employees at WestJet, thanks to its strongest glues: profit-sharing and an employee share purchase plan.

But..no profit share for 2005. There's always 2006 or 2007...

Great perk, but isn't there a risk of happy employees turning sour if the stock nosedives? "The fundamentals of the airline are solid," says Tim Morgan, co-COO, "and our people know this because they're part of it. So when the stock goes down, as it has in the past, they use it as a buying opportunity. They know they'll be much further ahead when the stock bounces up. Absolutely everybody is an entrepreneur in this company." And "everybody" isn't hyperbole: 87% of WestJet's employees own shares, investing an average of 13% of their salaries in stock purchases.

They will be buying, and buying, and buying, and buying, and buying....

WestJet has become an economic stimulus for many communities when they have started to fly into the area (ex. Kelowna, Kamloops). This has also encouraged the larger airlines to become more competitive and offer services to these areas as well.

Kamloops? Maybe they cancelled their first and only flight.

WestJet chose to eliminate the frills, and consolidate to a single class. By utilizing the internet for ticket distribution they are able to bring down their cost per transaction down to $1 whereas call centers cost $12 per transaction and customer service representatives cost $20 per transaction.

Elliminate frills by adding leather seats, Live TV, give away headsets etc...

In stark contrast to the other airlines, WestJet has no unions. They have a Pro-active Communications Team (PACT) which collects $2.50 per pay period from the employees. This team has the same privileges as a union but salaries are not negotiable.

A union that can't negotiate salaries? Way to go Clive

All of these incentives don’t come for free the employees do have to give up something, they do not receive the highest salaries in the industry. This is especially true with the pilots, who are provided with stock options to help bring them closer to the industry average on salaries.

Ouch!

http://www.albertapork.com/news.aspx?NavigationID=264
http://www.profitguide.com/magazine/art ... 71556_4580

Blastor · Post by **Blastor** » Sun Mar 06, 2005 7:44 pm

.....and no pension either

Way to go Westjet

. . · Post by **. .** » Sun Mar 06, 2005 8:12 pm

there's no pension plan at WJ?

Flightlevels · Post by **Flightlevels** » Sun Mar 06, 2005 10:44 pm

yes there is a pension of sorts...you put in as much as 20 percent of your earnings and the company will match it...at my wage thats over 30 thousand / yr and then I diversify it every year after the company's portion is vested. I could never get that outta my AC pension. Blastor knows all of this but he keeps trying to wish unwell to others. Profit share might be tight this year but moral is high and everyone is educated on it being a bonus and just that...don't depend on it as part of your wage.options paid well and pilots just had a meeting saying that we are happy with the wage...speaks volumes about the company...contrary to what blastor says. BTW a fellow with a masters degreehas chirped who mr blastor is and you wont be surprised..I wasn't. standby for new atis...lol

complexintentions · Post by **complexintentions** » Sun Mar 06, 2005 11:27 pm

Flightlevels,

that's great that you're pulling down the six figures (although I'm always a little leery of people who volunteer stuff like that - must be my Canadian nature).

But you might not want to mention that to any of the FO's hired in the last year or so. They're making their 40k, no profit share now, no hope for advancement anytime soon...talk about sailing into your uncharted waters for the company.

It would be insightful to study the history of airlines that implement different pay scales, which in essence is what you have now...those in at the beginning (at the top of the pyramid) certainly HAVE done very well...those at the bottom now...notsomuch. Short term pain? I don't think so.

I know for me, no matter how hard I tried to "keep my chin up" and give that "famous WestJet service", it would be difficult for there not to be resentment building at the fact that I was making about a third or less of what some of my colleagues were making...who'd been there maybe 2-3 years longer...owwwwch...

Various interesting scenarios come into play. For example, say they try to increase the FO pay to try and compensate a bit for the lack of profit share and the slowed promotions. Why would the senior pilots want that? It directly affects the bottom line, and the profit share...when it returns. Kind of interesting - how you would feel about THAT issue would certainly depend on when you were hired!

All I'm saying is any compensation scheme that has the potential to pit employee against employee is bound to hit some potholes. It's all well and good to present the happy face to the world from selected pilot quotes, but the rank 'n file might not always agree...when you're taking 700 bucks home every two weeks it's not much consolation to have dollar cost averaging explained to ya...

Blastor · Post by **Blastor** » Mon Mar 07, 2005 7:00 am

complexintentions: That's the most inteligent post I have read here in a long time. You got it right.

Flightlevels posted

BTW a fellow with a masters degreehas chirped who mr blastor is and you wont be surprised..I wasn't. standby for new atis...lol

A masters degree? (NOT dregreehas) My, my I'm touch. Realy!

By the way: I'm not the Queen of England, Elvis, Jimmy Hoffa, Clive Bedoe

.

Flightlevels · Post by **Flightlevels** » Mon Mar 07, 2005 9:00 am

complexintentions wrote:Flightlevels,

that's great that you're pulling down the six figures (although I'm always a little leery of people who volunteer stuff like that - must be my Canadian nature).

But you might not want to mention that to any of the FO's hired in the last year or so. They're making their 40k, no profit share now, no hope for advancement anytime soon...talk about sailing into your uncharted waters for the company.

It would be insightful to study the history of airlines that implement different pay scales, which in essence is what you have now...those in at the beginning (at the top of the pyramid) certainly HAVE done very well...those at the bottom now...notsomuch. Short term pain? I don't think so.

I know for me, no matter how hard I tried to "keep my chin up" and give that "famous WestJet service", it would be difficult for there not to be resentment building at the fact that I was making about a third or less of what some of my colleagues were making...who'd been there maybe 2-3 years longer...owwwwch...

Various interesting scenarios come into play. For example, say they try to increase the FO pay to try and compensate a bit for the lack of profit share and the slowed promotions. Why would the senior pilots want that? It directly affects the bottom line, and the profit share...when it returns. Kind of interesting - how you would feel about THAT issue would certainly depend on when you were hired!

All I'm saying is any compensation scheme that has the potential to pit employee against employee is bound to hit some potholes. It's all well and good to present the happy face to the world from selected pilot quotes, but the rank 'n file might not always agree...when you're taking 700 bucks home every two weeks it's not much consolation to have dollar cost averaging explained to ya...

All true but if you find it tight on the 700 bucks don't do the full 20%, we all have been in the same boat finacially in the first year but it takes about 3 yrs to really get on the step and go. That is minimum of what you would take at AC mainline and Jazz fo's are sitting well past 6 years now and probably not making much more than 50 ish G's. It's not all about money either, this is by far a better place to sit with the equipment and type of flying varity. Stock goes up and down as I watched over the last few years and at times options weren't worth much or none at all but then it finally gets interresting when you have a tax problem for the first time in my life. Fairness is priority a good example is the bidding system for holidays and days off. This would never be so good at a seniority system in place with a company of this size. Blaster is it possible you have been filtering through a third party that has been decoding your encryption for things like email. just a thought.

Blastor · Post by **Blastor** » Tue Mar 08, 2005 5:37 pm

BTW a fellow with a masters degreehas chirped who mr blastor is and you wont be surprised..I wasn't. standby for new atis...lol

Blaster is it possible you have been filtering through a third party that has been decoding your encryption for things like email. just a thought.

Let me get this straight:

You’re publicly advertising the fact that you are so scared of me, that you are trying to “hack” my computer and my e-mail. Wow!

You can’t be that stupid? Can you? I’m sure Avcanada won’t have any issue by providing me with all your pertinent information if need be.

You are a sad, small, little man

Note: I’m sure this moron is not a representation of people working at Westjet, or their fans.

.

Flightlevels · Post by **Flightlevels** » Tue Mar 08, 2005 6:07 pm

not sure who the pot is here..lol, and no I'm not that stupid.lol...intresting stuff though.

Blastor · Post by **Blastor** » Tue Mar 08, 2005 8:08 pm

Too late

.

CanadaEH · Post by **CanadaEH** » Tue Mar 08, 2005 9:10 pm

Hey Blastor thats the most words you've strung together for as long as I can remember - you should do it more often!!!!!!

WS739 · Post by **WS739** » Tue Mar 08, 2005 9:31 pm

OHH Blastor is a little bitter now!
Too bad man get a life!
Everyone has their own opinion of their companies so grow up and stop bashing.
Ive been with Ws for 3 years now as a CSA and i tell ya that %20 helps enormously.

If the analysts are right next year about our stock price being around 25-30 then most of us CSA's should have banked around 40K.
Even without profit share thats a good chunk of money and we all know that noone can rely on profit share nowadays.

Rebel · Post by **Rebel** » Wed Mar 09, 2005 5:28 am

WJ stock price in the $25-30 range next year.
What sort of kool-aid are you drinking??? With oil in the $50 a barrel range and forecast to stay there and a fare blood bath with negative yields going on, I don’t think so..

Trickkles · Post by **Trickkles** » Wed Mar 09, 2005 11:43 am

WS739 wrote: If the analysts are right next year about our stock price being around 25-30 then most of us CSA's should have banked around 40K.

$25-30?

I'm a WJ employee and my Kool-Aid isn't even spiked that much!!

Blastor · Post by **Blastor** » Wed Mar 09, 2005 8:22 pm

Those days are over...

Typhoon pilot · Post by **Typhoon pilot** » Thu Mar 10, 2005 6:55 pm

In regards to the title "Finally" has two L's not one.

Kool Aid has way too much sugar in it.
Didn't really have anything intelligent to post and I was bored!

wingnhut · Post by **wingnhut** » Fri Mar 11, 2005 12:17 am

I personally like kool-aid, and resent it's good name being thrown around every time somebody decides to make an anti Westjet statement.

Jaques Strappe · Post by **Jaques Strappe** » Mon Mar 14, 2005 7:27 am

Defensive bunch........wholly crap! Is this an airline forum or an Amway convention?

What is this Flightlevels? In 3 years you are making more than an AC mainline guy is in 6? Hmmmm.......I would be willing to bet in some cases you are, depending on where that 6 yr guy at AC is. Unlike WJ he could be sitting on any number of aircraft. It only took me 4 years to get to the left seat of the DC-9. I understand though that it is not a "heavy Iron" like a 737 but at least the guy at AC can move up to something that is.

Your maturity gives you away my friend. When people make reference to the "KoolAid" at Westjet, it is usually as a result of reading a westjetters post.

Swamp Donkey · Post by **Swamp Donkey** » Mon Mar 14, 2005 2:25 pm

Jaques Strappe wrote:Defensive bunch........wholly crap! Is this an airline forum or an Amway convention?

Trickkles · Post by **Trickkles** » Mon Mar 14, 2005 9:02 pm

Amway, Watkins??

Now I'm having flashbacks to my tortured childhood.....

cyyz · Post by **cyyz** » Mon Mar 14, 2005 11:44 pm