Be Ready

[Fanblade]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

[digits_]

My comments were "tough and cheek".

I can see where your disdain for teachers comes from

Both my parents were teachers. Dont know where thats coming from........you're reaching I guess.

I think you're missing the joke.

Hint: Were any of them English teachers?



(https://dictionary.cambridge.org/dictio ... e-in-cheek)

[aerobod]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

[Fanblade]

Aerobod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted and other speculative post like it. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

Yes I am pro union. But I’m not anti management. I’m anti being taken advantage of by management. There is a difference.

[cdnavater]

If you know anyone at WS who was there before mid 2018, many who work in HQ know who I say I am is exactly right. Sorry if it doesn't meet your narrative or assumptions. In some cases they may not know me by name, but they will recognise the green Caterham I have in my avatar (the photo is actually from when it was in that parking lot, near the fence on 78 Av NE), often driven under the barrier at the end of the west parking lot by the fire station, to avoid holding up the people behind in the morning, due it being a hassle to undo my harness to get the badge out.

Sorry that facts and analysis are not something you want to look at, preferring ad-hominem, attacks over analysis to provide a sound reasoned alternative view.

Aerobod,

There was nothing factual in this statement. Maybe re read it.

Frankly I’d be disappointed if WS went under as I have many friends there that would be affected and also that would be the end of my retirement privileges, but I’d give it 50/50 chance of surviving at the moment if a lengthy (3 months or more) strike happens. I can’t see Onex stepping in to provide any additional capital once all the aircraft have been leased to provide more working capital (as was the main source during Covid). As a private company it will be a lot easier to wind up operations as opposed to filing for bankruptcy as a public company - pay off the liabilities, employees laid off with at least legal minimums of severance. Written off by Onex as a failed experiment in airline ownership, with tax relief on the initial investment as a business loss against their other profitable ventures. I can’t see a bunch of angry pilots having much influence over any financial decision Onex is going to make. Tick tock!

Every last word dripping of speculative fear mongering. Built into a classic burning platform.

Maybe I have who you are wrong. But the writing speaks directly to motivation. Why you have a motivation to build a fear based message based on a burning platform model I can only speculate. Maybe you have been subjected too or been indoctrinated into it to often.

It is also possible you had no idea how you came across. However your claimed management experience makes that difficult to believe.

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

I could be wrong, didn’t your analysis on RASM and CASM talk about having to increase the ticket price and whether or not the market could/would support that? Seems speculative as well.
I’m with Fanblade, this is pure fear mongering at its best, you have no idea whether or not the increase in CASM will be the nail in the coffin, the only way to find this out is to see if after the cost of the high priced autopilots increases, enough revenue comes in to offset, anything else is speculating.
The other thing, it isn’t WJ purchasing Sunwing is it? Even if it is officially WJ buying, the money is coming from Onex and this seems like part of a long term plan to dominate, also seems like a poor business decision to write it off because employees in demand want a raise!

PS; If the airlines simply looked at pilots as parts(autopilots) that cannot be MEL’d, and those parts have increased due to supply chain disruption, maybe they could stomach it. Any employee who needs a specific skill and is in demand can and should expect a significant pay increase, if you can be replaced with a short company training course, maybe not so much.

[SeaBat]

Oh no! Please Mr. 182E... please don't leave us and go to another airline. There. Does that make you feel better? We honestly don't give a flying fu@& when a passenger states, "I'll never fly on your airline again." To be honest, we normally make fun of you later that night while having a beer at the bar.

Well good for you. Maybe if you were better paid you wouldn’t be such an asshole? Nah. I doubt that

HaHaHa, good one... some more bar room fodder.

[Montroyal]

Westjet is going out of business because the pilots want industry rates...lol

Reminds me of when AC pilots were told they needed a 10% paycut to fly cargo...something they were already doing on a machine they were already flying. The operation was already stood up, planes ready for conversations but that 10% pay cut was the "make or break"

Or the latest MOA at AC and the pilots were told this pilot shortage was "temporary". Looks like it is getting a lot worse...

Fact is...union busting 101 is to lie, distort and manipulate. This is no different

Well done WestJet for not buying into the endless lies management will throw out there

[aerobod]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

[cdnavater]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

Super information, the part that is missing, is the actual cost to give pilots what they are asking for. Of the 13 million per day operating cost, what is the pilots salary?
Obviously if pilot wages go up and what you say is true, outgoing equals incoming, incoming has to go up, by how much is not really the pilots job. Your argument also assumes WJ is the only company who’s cost are going up, in the current environment that is highly unlikely.

[aerobod]

Aerbod,

I read your posts on CASM and RASM. Yes I understood them. They were very well thought out and articulated well. It’s why I believe you when you say you know quite a bit about the industry. Probably management. If you had stopped at facts I wouldn’t have called you out.

The problem I have is the post above that I quoted. A person who clearly knows WJ. Clearly knows the business. Clearly knows how to articulate financial metrics. Yet they take that credibility and translate it into a summary where every last word is dripping of speculative fear mongering. Worse it looks like a classic burning platform.

What do you think I’m going to think?

The conclusion was based on the analysis, I do regret posting the "Tick Tock" bit as being a bit below my usual standard of discussion, as I had been irritated by some of the previous posts, but I stand by the conclusions.

The conclusions as expressed that Onex may close down WS (50/50 was my opinion in terms of probability, if a labour dispute lasted 3 months or more) is based on the outcomes of the analysis that:

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

Super information, the part that is missing, is the actual cost to give pilots what they are asking for. Of the 13 million per day operating cost, what is the pilots salary?
Obviously if pilot wages go up and what you say is true, outgoing equals incoming, incoming has to go up, by how much is not really the pilots job. Your argument also assumes WJ is the only company who’s cost are going up, in the current environment that is highly unlikely.

They are expected variables which I looked at earlier in the thread, basically:

- expected increase in ticket prices over a 2 year period with a lag (I expect about 20% due to current lack of profitability in the industry), but discounting or similar prices as now for as long as recession is likely and ULCCs are taking new aircraft to provide excess capacity.

- first one in to increase cost (WS) will be the first to increase losses that will need capital to finance.

- wildcard is what ULCCs do to WS in the time it takes the market to stabilise at a new higher RASM across the board.

- AC is insulated from the competitive pressures WS is under due to their much better RASM driven by business travellers.

- Bankruptcy of a couple of ULCCs would probably be the best news for WS, taking the pressure off not being able to grow RASM, but I wouldn't bet on it as the most likely saviour.

All of these factors work into my initial CASM/RASM discussion earlier in the thread: viewtopic.php?p=1238881#p1238881

[Fanblade]

Aerobod,

Your analysis is assuming the parties involved in the labour impasse take the labour dispute to mutually assured destruction. How often have you seen this happen? Realistically speaking do you really think Onex and ALPA are that stupid? ALPA has one of the largest and respected Financial Data & Analysis department in North America. They know what WJ can and can not afford. We can do all the speculative napkin math we want, but it won’t tell us anything we can hang our hat on. The only thing that is relevant is that the Union and company know exactly where the red lines are. And they do. It would be irresponsible as a union not to know.

http://nowaydpa.alpa.org/ALPAADVANTAGES ... fault.aspx

Maybe you are not used to normal positional bargaining.

It untimely is adversarial. Unfortunately most positional bargaining just ceases to continue progressing without starting the clock ticking toward work stoppage. The only way for a union to start that clock in Canada is to request conciliation. It is rare for bargaining to proceed any differently. What is going on is completely normal. I get many people at WJ may not be used to this normal.

You have to understand I’m reading your posts and seeing someone, articulated and educated at that, take what is normal for early stage bargaining in Canada, and making a massive leap to a three month strike ending in Mutual Assured Destruction.

I’m thinking WTF? Chill bro.

There is a lot more water yet to go under the bridge. It absolutely is stressful. May I suggest if you care about your friends at WJ that you don’t make it worse by taking your napkin math down a rabbit hole toward Armageddon. If your concern is that ALPA will push too far? I can assure you they won’t. I can also assure you they will push further than WJ wants them to.

Unfortunately our system is set up in an adversarial manor. A system where it isn’t resolved until both parties put a gun to each other’s head. This isn’t just the union choosing this route. It is also WJ. Nevertheless normal.

[Curiousflyer]

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

You’re analysis failed to account for cumulative inflation. 50% over the next 4 years could only be a real gain of 20%. The overall increase to CASM you calculated at 8.8% doesn’t include inflation and also includes profit share, which in your predictions there wouldn’t be any.
Trying to guess a private corporations finances from the outside like this is somewhat ridiculous. We have no concept of the CASM, and likely ONEX doesn’t either, as it’s primarily used by publicly traded airlines to compare to one another. What we do know is that WestJets compensation package is not enough to retain or attract experienced pilots. We also know that ALPA has WAY more financial data on WestJet than any other entity, so ALPa will now be making their case to a federal conciliator on why they think they should get what they want, and with way better financial information than we do.

From Onex’s quarterly report “ The net gain from Onex Partners V was primarily due to the underlying fair value increases of Acacium Group, Convex, Imagine Learning and WestJet.”

[aerobod]

Aerobod,

Your analysis is assuming the parties involved in the labour impasse take the labour dispute to mutually assured destruction. How often have you seen this happen? Realistically speaking do you really think Onex and ALPA are that stupid? ALPA has one of the largest and respected Financial Data & Analysis department in North America. They know what WJ can and can not afford. We can do all the speculative napkin math we want, but it won’t tell us anything we can hang our hat on. The only thing that is relevant is that the Union and company know exactly where the red lines are. And they do.

http://nowaydpa.alpa.org/ALPAADVANTAGES ... fault.aspx

Maybe you are not used to normal positional bargaining.

It untimely is adversarial. Unfortunately most positional bargaining just ceases to continue progressing without starting the clock ticking toward work stoppage. The only way for a union to start that clock in Canada is to request conciliation. It is rare for bargaining to proceed any differently. What is going on is completely normal. I get many people at WJ may not be used to this normal.

You have to understand I’m reading your posts and seeing someone, articulated and educated at that, take what is normal for early stage bargaining in Canada, and making a massive leap to a three month strike ending in Mutual Assured Destruction.

I’m thinking WTF? Chill bro.

There is a lot more water yet to go under the bridge. It absolutely is stressful. May I suggest if you care about your friends at WJ that you don’t make it worse by taking your napkin math down a rabbit hole toward Armageddon. If your concern is that ALPA will push too far? I can assure you they won’t.

Unfortunately our system is set up in an adversarial manor. A system where it isn’t resolved until both parties put a gun to each other’s head. This isn’t just the union choosing this route. It is also WJ. Nevertheless normal.

I agree we are still in mutual posturing, I’m hoping there is a mutual position that both sides can agree on, as I have said a short strike wouldn’t be much of an issue. Hopefully you are right that ALPA won’t push too far.

I still worry that Onex is too much driven by the finances of the decision (which they have demonstrated in the past, they have no skin in the game of WS brand or any remaining “culture”), as GS is now in more of an advisory role for his “vendetta” against AC to likely have much sway, but things should still have them in the long term game if there isn’t too much further impairment to their WS asset.

[aerobod]

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

You’re analysis failed to account for cumulative inflation. 50% over the next 4 years could only be a real gain of 20%. The overall increase to CASM you calculated at 8.8% doesn’t include inflation and also includes profit share, which in your predictions there wouldn’t be any.
Trying to guess a private corporations finances from the outside like this is somewhat ridiculous. We have no concept of the CASM, and likely ONEX doesn’t either, as it’s primarily used by publicly traded airlines to compare to one another. What we do know is that WestJets compensation package is not enough to retain or attract experienced pilots. We also know that ALPA has WAY more financial data on WestJet than any other entity, so ALPa will now be making their case to a federal conciliator on why they think they should get what they want, and with way better financial information than we do.

From Onex’s quarterly report “ The net gain from Onex Partners V was primarily due to the underlying fair value increases of Acacium Group, Convex, Imagine Learning and WestJet.”

Yes, all valid points, but I think I stated earlier that inflation would be on top of that 20%, if not that is what I based assumptions on. CASM in this case has all been based on published 2019 figures before Onex, they won’t have shifted by much without a major change in internal processes, the non WS factors such as fuel can be obtained from similar airlines, but private obscurity of the WS figures will mean some drift.

I would argue that Onex is very aware of the CASM figures, as I was still at WS in the early days of the negotiations and had to provide my very specific contribution to it relative to my IT teams. They seem to be very much a cost vs value (benefit) organisation, CASM gives them a somewhat standardized benchmark, although from a standard metric perspective we actually tracked 4 CASM specific metrics in the Data Analytics team on behalf of The Business, as there are some CASM subtleties that have to be taken into account in certain analyses.

[lostaviator]

I do believe Onex is actively evaluating their holdings. All investors should.

That being said, if they decide to close this shop down, it will be because of the horrible mismanagement and lack of direction over the last few years and NOT because of any employee group. ES was perfectly happy carrying on down this path of making WJ an AC competitor. even though it was clearly costing us. Now we AVH who has pretty much said ES and his vision were wrong. Yes I know GS started the WB program but ES was vital to the growth of the 787 product as chief commercial officer and then the 787. It was his baby.

They used to talk about the need to balance the needs of our three pillars - our customers, our people, and our business. I don't think we are focusing on any of those three pillars anymore. We are off course and that will be the reason for the wreck.

WJ closing down will be unfortunate and I will miss the people I work with. With all the new market entrants, someone is bound to fail eventually. I'd rather get this over with at a young age when I have the ability to start over.

I think I am going to refrain from contributing further to this thread. We all know these forums are frequented by management and we are feeding them things that make us nervous. We can expect "we will shut down" as a threat going forward based on the 8 pages of comments dedicated to the subject here. I'll trust the economic advisors at ATPL - they've all been in their positions longer than any of our current executives (combined).

[Conflicting Traffic]

- WS was originally worth about $4bn when purchased by Onex, with most of that value being in owned aircraft and WestJet brand goodwill

- Covid hammered the asset value, difficult to say exactly from the Onex corporate statements, but going by the increased lease-back amount to provide capital and approximate halving of owned assets, I would say that the value of the company dropped by $1.5bn due to physical owned asset reduction and about $0.5bn in the brand value loss if the company was to be sold for it's name due to negative press and decline in customer service

- Therefore post Covid I would put the company value at $2bn.

- In a protracted labour dispute (I stated 3 months), the initial cost before staff layoffs across the workforce is about 50% of normal operating cost, with fuel, airport and nav fees being reduced to close to zero, but employee cost besides the pilots and other aircraft related costs not reducing by much, as an approximately a $13m per day revenue company and costs and revenue being close to equal at the moment, 3 months would cost about $593m in keeping the operations ticking over and ready to resume, if other staff are laid off, then restart will take a lot longer.

- APPR refunds or re-accom on other airlines would remove most of the forward bookings, typically between 2 and 3 months for most airlines, so lets take 50% refund for 2.5 months of bookings and a cost of re-accom of 50% more than operating by WS itself, leading to 0.5x2.5 + 1.5x0.5x2.5 = 3.125 months of revenue to be returned or used for re-accom, about $1,235m

- on operations re-start, the booking curve has to be rebuilt again, but most flights will have to be flown with low load factors as opposed to much in the way of flight cancellations. This will lead to costs on average about twice revenues for the 2 month period to build the booking curve from 0 to 100%, about $6m per day loss on average, so another $365m charge.

- total capital needed from the beginning of a strike to 100% restoration of service would therefore be about $2.2bn.

So WS could dip to somewhere between a negative and $1bn asset value based on the above (as the forward booking refund amount is not an asset, but still affects immediate capital needs and goodwill value is difficult to pin down), if capital is financed through remaining owned aircraft sale and the brand still has some value left in it. On resumption of service, once the forward booking curve is rebuilt, there would be more working capital again, perhaps WS would just delay APPR refunds and paying suppliers until the strike was over? This would likely put even more pressure to strengthen APPR enforcement across the industry.

At this point, this is where I believe Onex has the hard decision to fold or continue, as they will likely have to provide some working capital to WS if they continue and the brand value is diminished, as is the value of physical assets owned. They would have to see good profits ahead to continue, in my opinion.

What is your interpretation of the above?

My interpretation is the WestJet management should try really hard to avoid a strike. I wonder how they could do that?

[cdnavater]

You obviously missed or didn't read the CASM/RASM analysis and if you did either didn't understand it, or are not willing to present a counter-point based on alternative figures or interpretation of the figure I presented (which I provided the info to where that public info was from). The snipets of other parts of the thread that you have just posted in this reply are meaningless without the context of the analysis parts.

It is certainly speculative, but based on analysis and reality, not fear mongering. Investment companies such as Onex are in the business of levering assets, not subsidising businesses that have become loss makers.

Try presenting a financially based analysis of why you think Onex should continue to keep WS in the portfolio, if not who do you think would buy WS in a state where assets have been exhausted in a protracted labour dispute (bearing in mind foreign airline ownership rules pretty well restricting the buyer to being majority Canadian)?

I know you are very pro-union and anti-management in your comments across various forums besides WS, but financial analysis should be possible without any assumed starting bias, the figures should be a basis for discussion that opinions of what they mean can be formed from. I don't see where you have made any attempt to provide a quantitative or even qualitative analysis that in any way backs up your position or gives you any reason to give a reasoned counterpoint to my analysis that leads to my conclusions (that you have quoted and criticised because you don't like them).

You’re analysis failed to account for cumulative inflation. 50% over the next 4 years could only be a real gain of 20%. The overall increase to CASM you calculated at 8.8% doesn’t include inflation and also includes profit share, which in your predictions there wouldn’t be any.
Trying to guess a private corporations finances from the outside like this is somewhat ridiculous. We have no concept of the CASM, and likely ONEX doesn’t either, as it’s primarily used by publicly traded airlines to compare to one another. What we do know is that WestJets compensation package is not enough to retain or attract experienced pilots. We also know that ALPA has WAY more financial data on WestJet than any other entity, so ALPa will now be making their case to a federal conciliator on why they think they should get what they want, and with way better financial information than we do.

From Onex’s quarterly report “ The net gain from Onex Partners V was primarily due to the underlying fair value increases of Acacium Group, Convex, Imagine Learning and WestJet.”

Yes, all valid points, but I think I stated earlier that inflation would be on top of that 20%, if not that is what I based assumptions on. CASM in this case has all been based on published 2019 figures before Onex, they won’t have shifted by much without a major change in internal processes, the non WS factors such as fuel can be obtained from similar airlines, but private obscurity of the WS figures will mean some drift.

I would argue that Onex is very aware of the CASM figures, as I was still at WS in the early days of the negotiations and had to provide my very specific contribution to it relative to my IT teams. They seem to be very much a cost vs value (benefit) organisation, CASM gives them a somewhat standardized benchmark, although from a standard metric perspective we actually tracked 4 CASM specific metrics in the Data Analytics team on behalf of The Business, as there are some CASM subtleties that have to be taken into account in certain analyses.

This quote from another post,
“I agree we are still in mutual posturing”

Sometime words can mean more than just the literal. Was this a slip, perhaps but if you combine some things you’ve said, I would not be surprised if you gain somehow for all your posts on this subject.
You have been using inside information to make your assumptions, albeit slightly outdated but I would think you need permission to make these types of posts public.
If not, you seem to be walking a fine line of confidentiality, and again you come across as someone with more to lose than retirement passes.
Question for the WJ pilots, have you already voted for the strike mandate?

[aerobod]

You’re analysis failed to account for cumulative inflation. 50% over the next 4 years could only be a real gain of 20%. The overall increase to CASM you calculated at 8.8% doesn’t include inflation and also includes profit share, which in your predictions there wouldn’t be any.
Trying to guess a private corporations finances from the outside like this is somewhat ridiculous. We have no concept of the CASM, and likely ONEX doesn’t either, as it’s primarily used by publicly traded airlines to compare to one another. What we do know is that WestJets compensation package is not enough to retain or attract experienced pilots. We also know that ALPA has WAY more financial data on WestJet than any other entity, so ALPa will now be making their case to a federal conciliator on why they think they should get what they want, and with way better financial information than we do.

From Onex’s quarterly report “ The net gain from Onex Partners V was primarily due to the underlying fair value increases of Acacium Group, Convex, Imagine Learning and WestJet.”

Yes, all valid points, but I think I stated earlier that inflation would be on top of that 20%, if not that is what I based assumptions on. CASM in this case has all been based on published 2019 figures before Onex, they won’t have shifted by much without a major change in internal processes, the non WS factors such as fuel can be obtained from similar airlines, but private obscurity of the WS figures will mean some drift.

I would argue that Onex is very aware of the CASM figures, as I was still at WS in the early days of the negotiations and had to provide my very specific contribution to it relative to my IT teams. They seem to be very much a cost vs value (benefit) organisation, CASM gives them a somewhat standardized benchmark, although from a standard metric perspective we actually tracked 4 CASM specific metrics in the Data Analytics team on behalf of The Business, as there are some CASM subtleties that have to be taken into account in certain analyses.

This quote from another post,
“I agree we are still in mutual posturing”

Sometime words can mean more than just the literal. Was this a slip, perhaps but if you combine some things you’ve said, I would not be surprised if you gain somehow for all your posts on this subject.
You have been using inside information to make your assumptions, albeit slightly outdated but I would think you need permission to make these types of posts public.
If not, you seem to be walking a fine line of confidentiality, and again you come across as someone with more to lose than retirement passes.
Question for the WJ pilots, have you already voted for the strike mandate?

“I agree we are still in mutual postering” refers to the time frame things are in in the negotiations “mutual posturing” being that phase, no different than the statement “I agree we are still in the last phase of the moon”, nothing to do with me or anyone else in this thread actually being involved in the negotiations.

I have no net gain from my posts other than an interest in WS surviving for me to still have retiree benefits, but it wouldn’t be the end of the world if they no longer existed from my travel planning perspective. I have an intellectual interest in continuing to understand airline operation subtleties, although I’m currently consulting in a different industry.

Any info I have used is always from publicly available data from things such as annual reports and Investor Days presentations, that’s why I include links to the data sources, I’m very careful of that. Other than that my quoted expertise and team involvement at WS in the past is nothing other than would be included in a job resume.

[Mostly Harmless]

Issues with the economic analysis presented here:

Information is dated. 3, and now pushing 4, years out of date.

Assumptions based on growing uncertainty in the absence of real time data.

Changes in corporate structure and costs since you left/covid. IE: There are a lot less office staff, no ground handlers, etc.

The assets "sold" by the company remain within control of the Onex operation. So, those lease payments from one division go to another division but remain within the organization... great tax avoidance potential and income stream.

Forward ticket sales used by Onex to fund other operations and investments... again, the great accounting shell game of money flowing around the same organization but remaining within the overarching corporate structure.

The eventual return of the company to Public status, a company that will be beholden to Onex for Leases, Services and Financing for decades after the company goes Public once again.

WJ is a cash machine for Onex. One that would be difficult to shut down because they have a flow of income combined with a tax write-off.

[cdnavater]

Yes, all valid points, but I think I stated earlier that inflation would be on top of that 20%, if not that is what I based assumptions on. CASM in this case has all been based on published 2019 figures before Onex, they won’t have shifted by much without a major change in internal processes, the non WS factors such as fuel can be obtained from similar airlines, but private obscurity of the WS figures will mean some drift.

I would argue that Onex is very aware of the CASM figures, as I was still at WS in the early days of the negotiations and had to provide my very specific contribution to it relative to my IT teams. They seem to be very much a cost vs value (benefit) organisation, CASM gives them a somewhat standardized benchmark, although from a standard metric perspective we actually tracked 4 CASM specific metrics in the Data Analytics team on behalf of The Business, as there are some CASM subtleties that have to be taken into account in certain analyses.

This quote from another post,
“I agree we are still in mutual posturing”

Sometime words can mean more than just the literal. Was this a slip, perhaps but if you combine some things you’ve said, I would not be surprised if you gain somehow for all your posts on this subject.
You have been using inside information to make your assumptions, albeit slightly outdated but I would think you need permission to make these types of posts public.
If not, you seem to be walking a fine line of confidentiality, and again you come across as someone with more to lose than retirement passes.
Question for the WJ pilots, have you already voted for the strike mandate?

“I agree we are still in mutual postering” refers to the time frame things are in in the negotiations “mutual posturing” being that phase, no different than the statement “I agree we are still in the last phase of the moon”, nothing to do with me or anyone else in this thread actually being involved in the negotiations.

I have no net gain from my posts other than an interest in WS surviving for me to still have retiree benefits, but it wouldn’t be the end of the world if they no longer existed from my travel planning perspective. I have an intellectual interest in continuing to understand airline operation subtleties, although I’m currently consulting in a different industry.

Any info I have used is always from publicly available data from things such as annual reports and Investor Days presentations, that’s why I include links to the data sources, I’m very careful of that. Other than that my quoted expertise and team involvement at WS in the past is nothing other than would be included in a job resume.

Ok, fair, like I said sometimes words can mean something other than. I would’ve said, “they” are still in mutual posturing but maybe that’s because I’ve never been part of the WJ group.
I do hope WJ survives this as I can’t stand the thought of Flair being the new WJ, that’ll set us back a decade or so.