“We’re running with almost no margin for error and when there’s the slightest disruption it goes through the whole system,” he said.
"I think that there are forces, such as labour shortages, entering the market that are really bringing the whole system down to its knees."
A dire labour shortage is "at the heart" of the WestJet / pilot standoff, he noted. As Open Jaw has reported, pilots in the U.S. have achieved unprecedented, rich contract gains in the last few months as the number of qualified pilots has dwindled.
WestJet pilots and their union, ALPA, have made an "industry- or North American-standard" contract the cornerstone of their demands, even as the airline insists the Canadian market is much different than the U.S. air market and can't sustain similar compensation models.
“We truly value the work and contributions of our pilots,” said a steadfast but conciliatory WestJet's CEO Alexis von Hoensbroech 16MAY as Open Jaw has reported. “We believe with a commitment from both parties, an agreement is achievable and are committed to offering pilots a competitive collective agreement with meaningful improvements for the Canadian market, whilst remaining competitive at the same time.”
WestJet insists that its offer to pilots will make them the best-paid in the country.
But WestJet pilots are still so far not budging. That means, no matter what deal is finally reached by WestJet and its pilots, the results will apply pressure to other airline labour negotiations.
Air Canada Pilot Crisis Around the Corner?
As Open Jaw has noted, Air Canada pilots are pressing for higher salaries and better scheduling. Reuters reported the contents of a letter from the Air Canada Pilots Association (ACPA) highlighted pilots' concerns about working at a disadvantage compared to other North American pilots, and expressed their refusal to accept concessions.
That pilots' union is currently evaluating whether to continue within an existing 2014 agreement or trigger an escape clause for comprehensive negotiations before 29MAY.
Fees and New Compensation Rules Are the Cherry on Top
If there's a 'perfect storm' brewing that will lead to a predicted "air transport crisis," the fee structure of the industry and new, higher pax compensation costs will also contribute.
“A lot of the rules, a lot of the fees are going to have to be examined and we have to look at what it’s going to take for airlines and airports to actually earn revenue in a decent manner that still allows Canadians to fly,” Pavelka said. “The whole sector is deregulated and we want to believe that the market is going to take care of that, and it has for a very long time."
Now, he says, there may need to be systemic changes at the federal government level.
WestJet's CEO has been vocal and in the forefront of airline executives demanding a new deal for the industry from governments.
As Open Jaw has reported, in his 1st anniversary 'state of the union' release, von Hoensbroech criticized the high costs charged by 3rd parties, like NAV CAN, which add to the costs of airfares.
He noted that in Canada, air travel is not a luxury, but necessary given Canada's size and the distances between destinations, and added that it should not be penalized with added costs, but subsidized by the government, like rail travel in Canada's most populated areas.
The CEO has also, as the Calgary Herald reports, "called for a privatization of Canada’s major airports in attempt to lower airport fees and encourage private investment."
Ottawa has already gotten more involved in regulating one aspect of air travel - and new passenger rights and compensation rules are not in the airlines' favour.
WestJet's CEO has demanded that other air industry stakeholders whose performance can affect flight delays and cancellations also be on the hook for passenger compensation, especially as Ottawa institutes new, tougher and more expensive passenger protection rules.
While airline delays can be caused by a variety of issues, such as border issues, airport delays, or security, under Canada’s updated the air passenger bill of rights, airlines are solely responsible for compensating passengers, von Hoensbroech pointed out during a Calgary Chamber of Commerce meeting. He concluded that means airlines effectively act as insurance for the entire industry as they have to cover the full cost of delays.
WestJet had to pay out tens of millions of dollars to passengers in 2022, von Hoensbroech said, and those costs can lead to higher fares and make it unsustainable for airlines to continue to operate profitably.
Any work stoppage due to labour action would add financial pressure and strike at consumer confidence - potentially a straw that breaks the camel's back for an industry that's still recovering.
