Encore WACON released and surprise, it sucks

[Ryan Coke2]

WJ guys...your T4 means f--- all.....(not suggesting wja esp is crap cuz its not..its pretty awesome)..what you take home means something...your T4 represents a wack of money you cant touch...or shouldnt touch...well you can if your wife/gf/fa wants a new car but then you cant pay your mortgage...or you risk your retirement...you make your hourly wage times your flying per month less taxes and anything you do over 80 hours or so....(that must suck having to do that to actually have a good income) how many hours do you work when you fly a 90 hour month...how many days away from home? ....thats what you make...just because rbc gave you a mortgage for a house in a good part of yyc doesnt mean you can really afford it...never understood why banks look at a wj pilots t4...very misleading...

This is so short sighted. You have the mindset of someone who only understands living pay check to pay check, and never trying to manage your money in a long term way. ESP and option money still spends...it buys cars with cash, or puts lump sums on mortgages, or pays for the boat straight up. Yes our pay checks are smaller every 2 weeks than most people of equivalent pay, but that other money is still just as valuable. There is nothing misleading about it.

If all you understand is what shows up in your bank account every two weeks then you have no concept of wealth management.

[complexintentions]

WestJet is still WAY better! You should have seen my T4 last year!

T4's are for suckers.

[complexintentions]

There are two story lines going on here.

One, starting wages. Yes I agree nothing really to see here. EVERYONE does it.

Two is the shift in the regional market place with the entrance of Encore and AC's ability to contract out prop flying below 80 seats and Jet flying below 75 seats to anyone they wish.

Encore is entering the market with a 50% cost advantage over Jazz.

This is the same dramatic change that occurred in the narrow body market when WJ entered it with one difference. CAIL and AC had to fail to reduce employee costs toward the new entrant. That is a slow process. 15 years so far and counting. Two CCAA's and another near miss.

This time Encore can be matched almost instantaneously by AC with a new CPA. AC isn't the slow rudderless opponent this time as it is outside the control of unions. Encore will not enjoy a 15 year period of competing with a company with vastly higher costs.

The result? These wages are the new benchmark. Match it or parish.

Cross subsidization to the regional market is about to end. A capitalist would call that a good thing. An astute pilot would look south of the boarder to see what the result is.

With that said. It was only a matter of time anyway. AC would have been looking to capitalize on their new found ability to reduce costs in the regional market anyway.

My point and only point. It is the dramatic change about to happen that I am focussed on. The only other poster that seems to understand the change underway is Realitychex's.

Do not expect these wages to go up. If anything we may see pressure for them to be reduced.

We do compete trans boarder after all. Without cross subsidization imagine the WAWCON required to be profitable on a stand alone basis with say Skywest?

This change is on our door step. This isn't WJ or AC's fault. They are responding to each other in a competitive environment. The fault belongs to us. Two pilot groups that could have, but didn't set minimum WAWCON even though you would have to be blind not to see what happened south of us.

Oh and this is absolutely spot on, and about the only sensible post in the whole thread. You can mark the current WJ mainline wages as the peak. With Encore/Sky Regional demonstrating that pilots will work for peanuts, and Air Canada becoming competitive overnight, there simply isn't a reason to pay the wages a few have boasted about.

Things are always changing, but the difference now is the speed of the changes. Hope everyone's ready.

[CAL]

Ryan I dont disagree with some of what you have said.
I have stated that your esp is very good.
But if you cant pay the bills for the next 5 years until you can liquidate some of your pension account...
well I would hardly call any of that 'wealth'
It may work for you and some others but disposable income is what counts when you only make 80-100k a year gross.

[tbaylx]

Canadian carriers are never going to be able to compete with the US regionals on a cost basis, so i sure hope no one in any sort of business management position thinks that by putting downward wage pressure on the industry they are suddenly going to be able to go head to head with the US carriers and be competitive or try and attract passengers back to Canada. You could pay your pilots nothing (and probably still fill the seats by the looks of it) and still be at a cost disadvantage to a US carrier. The taxes and fees are vastly different, as well as economy of scale on aircraft prices, fuel costs etc etc.

[Fanblade]

Canadian carriers are never going to be able to compete with the US regionals on a cost basis, so i sure hope no one in any sort of business management position thinks that by putting downward wage pressure on the industry they are suddenly going to be able to go head to head with the US carriers

On a trans boarder sector ( YYC- EWR for example) the fixed costs for both a Canadian regional and an American regional are similar. The major difference is total compensation or total cost of the employees. Wages, benefits, pension ect. The surge in the Canadian dollar has widened the discrepancy.

But you could be right. Nothing stopping AC from signing a CPA with an American regional to do the transboarder work.

The Transboarder Joint Venture will likely bring us there anyway. A virtual merge. Imagine AC and United sitting around the table discussing who will operate YYZ-EWR? AC? United? Jazz? SR? Expresjet?

The thing is revenue sharing is based on the percentage of Transboarder flying. No flying? No revenue.

So to answer your question. Will executive management think putting downward pressure on wages allow them to go head to head with US regionals?

Within the transboarder JV? Absolutely they do. SR is much more than a Jazz or Porter threat.

With the acquisition of 15 175's, SR is now the Transboarder Joint Venture weapon of choice to protect the YYZ hub. Within the JV AC must be competitive to be profitable. Not competitive? Cost will exceed revenue sharing.

[RustyDeuce]

Ryan I dont disagree with some of what you have said.
I have stated that your esp is very good.
But if you cant pay the bills for the next 5 years until you can liquidate some of your pension account...
well I would hardly call any of that 'wealth'
It may work for you and some others but disposable income is what counts when you only make 80-100k a year gross.

You do not understand wealth management. You've posted two posts that clearly demonstrate that.

[GravelOpsRock]

Of course there was an abundance of applicants.. anyone who applied is seeing this as the "short track" to the 737... as much as they say they will draw from outside and encore for the 737, in time they are just going to pull from Encore... why wouldnt they... they already know you and your habits. It even brings up the 737 on the encore application... My guess is if you're an outsider and don't get on mainline this year... its going to be a looooooooooong wait....

[Fanblade]

in time they are just going to pull from Encore... why wouldnt they... they already know you and your habits. It even brings up the 737 on the encore application... My guess is if you're an outsider and don't get on mainline this year... its going to be a looooooooooong wait....

Why wouldn't WJ want to hire from Encore? $$$$$$$$$ is why.

You move someone from Encore up to the 737 and it will cost WJ 2 courses. Hire direct to WJ? One course.

I doubt you will see more than the 1:5 bone already on the table.

Just ask a Jazz pilot how it has worked for them and AC.

They had better luck at WJ. I suspect Encore pilots will have better luck at AC.

It is all about the pennies. A cost sensitive operation like WJ wont be throwing them around.

[Kosiw]

The term Indentured servitude comes to mind.

[North Shore]

I suspect Encore pilots will have better luck at AC.

Can't see much of that happening, IMHO. I'm sure that guys would want to stay with a 'winning team,' despite the poor initial pay, and with a shot at WJ, rather than transfer into the AC mess..

[yycflyguy]

That AC "mess" is a result of different pay rates, different aircraft types, different work conditions and different expectations... oh, wait. The same thing that is about to happen for Westjet. Jazz has been Westjet's training academy for years now. I bet AC will preferentially hire Encore pilots in the future.

[Joe Blow Schmo]

I think you'll find that pilots account for 20-25% of total salary cost for airlines. That 3% is just union spin.

EMPLOYEE costs are probably in the 20-25% range. Pilots are just a small percentage of that though. The 3% is not far off.

[URC]

EMPLOYEE costs are probably in the 20-25% range. Pilots are just a small percentage of that though. The 3% is not far off.

According to WestJet's latest quarterly report, for the first 9 months of 2012, total employee compensation represented 21.5% of total operating expenses. Compensation related to Flight Operations, which includes pilots and dispatchers, represented 32.9% of the total employee compensation. This represents 6.5% of total operating expenses.

Compared with all other employee groups compensation attributed to Flight Operations increased the least amount in the first 9 months of 2012, 7.8% vs the highest of 18.6% for Administration. These period-overperiod increases in Adminstration compensation were primarily attributable to increases in incentive accruals. This 18.6% increase in Adminstration compensation represents 6.8% of compensation attributed to Flight Operations.

Dividends paid in the first 9 months of 2012 represent 18% of compensation attributed to Flight Operations. The company started paying dividends for the first time in its history during the first quarter of 2011.

A $0.01 (1 cent) drop in the price of fuel paid per litre would represent 5.4% of compensation attributed to Flight Operations.

Income Tax expense represents 48.9% of compensation attributed to Flight Operations.

[mbav8r]

In other words 3% is not just union spin, and to set the record straight, the only reference I've heard regarding 3% from the union, is that pilot wages represent 3% of the price of a ticket. Airlines have other sources of revenue, but based on the above, if you strip out dispatchers wages 3-5% is pretty close

[URC]

pilot wages represent 3% of the price of a ticket.

At WestJet in 2011 compensation attributed to Flight Operations represented 5.9% of total revenue. If we assume the base fare of the ticket attributed to the airline is 75% of the total cost once you add on the extra fees (AIF, security, GST), then the compensation attributed to Flight Operations represents 4.6% of the total ticket cost. Take out dispatchers and I would guess the total cost attributed to pilots would work out to around 4.3% ?

[Eric Janson]

I think you'll find that pilots account for 20-25% of total salary cost for airlines. That 3% is just union spin.

I'm the one who originally posted the 3% figure. This represents Pilot Salaries as a percentage of total Airline operating costs.

The source for this information is my CEO.

When looking at costs it is critical to get a detailed breakdown. Otherwise it's meaningless.

My point is that a single salary scale for both companies would not have as negative an effect as a lot of people seem to think.

[True North]

My point is that a single salary scale for both companies would not have as negative an effect as a lot of people seem to think.

Are you suggesting WestJet Encore Q400 pilots should be paid the same as WestJet 737 pilots?

[yycflyguy]

My point is that a single salary scale for both companies would not have as negative an effect as a lot of people seem to think.

Are you suggesting WestJet Encore Q400 pilots should be paid the same as WestJet 737 pilots?

It's been done before. B757 CAs getting the same pay as Smash-8 guys. Lots of international carriers use a status system between multiple fleets.

[Green Onions]

.

[7thirtyseven]

From what Im hearing the WestJet pilot do not want one list, they want a seperate list for the Encore crews. Seems like this will mean starting at the bottem again for pay and upgrade when Encore crews move to the 737.

Granted this isn't set in stone yet, and I really hope what I'm hearing is wrong. I'm not sure how you continue to promote and protect the current culture well at the same time creating division.

Completely and utterly false... Huge push for one list and from what I hear there are just a few details in the way of it. My (uneducated) guess as soon as the operation is up and running and the potential for an entire airline purchase diminishes the two lists disappear. Two lists is almost universally disliked by Westjet pilots and the sooner we can get rid of it the better.

[flyer 1492]

Care to comment on your quote "Potential for an entire airline purchase ". Last I heard Encore was OWNED by WJ.

[Kosiw]

Looks like things are progressing a little slower than planned according to this.

http://www.brandonsun.com/local/westjet ... html?thx=y

[True North]

My point is that a single salary scale for both companies would not have as negative an effect as a lot of people seem to think.

Are you suggesting WestJet Encore Q400 pilots should be paid the same as WestJet 737 pilots?

It's been done before. B757 CAs getting the same pay as Smash-8 guys. Lots of international carriers use a status system between multiple fleets.

With a very small 757 fleet and a large DH8 fleet sure, you pay the 757 guys DH8 wages. Show me a company paying $150,000/yr+ for DH8 captains and I'll show you a company going broke.

[Fanblade]

Care to comment on your quote "Potential for an entire airline purchase ". Last I heard Encore was OWNED by WJ.

I think he is referring to the on again off again rumor that WJ has been kicking Porter's tires. If WJ were to purchase a going concern some of the absorbed employees will have more length of service than WJ employees.

7thirtyseven,

I hope you succeed. Problem is WJ already has what it wants.