WestJet ready for June takeoff of ultra-low-cost carrier Swoop
WestJet Airlines Ltd.’s new chief executive officer Ed Sims said the company is hiring some of its pilots from abroad for its new ultra low-cost carrier Swoop, while at the same time looking to close negotiations with its new pilot union by the end of the year.
Sims said in an interview with the Financial Post on Monday that the June 20 launch of Swoop is on schedule, with three pilot classes currently advancing through the training process.
“We’ve been very successful in bringing largely expat Canadians from other parts of the world, (including) the Middle East and Asia, where economic conditions for operations were not as favourable as they once were, so those pilots are keen to come back to Canada,” Sims said.
“At some stage if we find an opportunity that (Swoop) can be operated by WestJet pilots, then we need to discuss that and that will be part of those negotiations we have at the table.”
WestJet is in the midst of negotiating a collective agreement with the Air Line Pilots’ Association (ALPA), an international union that has been representing more than 1,400 WestJet pilots since May 2017. Negotiations between the two groups had grown tense earlier this year, with both sides filing labour complaints, and the union calling for fellow pilot unions to impose a so-called “recruitment ban” on Swoop.
Former WestJet chief executive Gregg Saretsky, who announced his abrupt and immediate retirement in March, had initially tried to recruit pilots from its mainline and Encore services to fly for Swoop by offering temporary leaves of absence. However, the company was forced to change its hiring strategy after an order by the Canada Industrial Relations Board.
Sims, who took over as chief executive in March, said his goal is to reach a deal with the union by the end of the year. He said he had met with ALPA’s executive council for WestJet in the first days of tenure, and is committed to reaching a “sustainable settlement … as quickly we we possibly can.”
While his promotion to CEO surprised many analysts at the time, Sims said the plan to replace Saretsky had been in the works since he first joined the company in May 2017, after having served as chief executive of New Zealand’s air navigation service provider Airways.
“The succession plan was a pretty well-planned and thought-through process and it was one that Gregg was very much part of and aware of,” he said.
“When the board out here reached a decision to retire, there was also a view that, in terms of a succession candidate, we didn’t need to go out to the market to look more broadly (for a replacement) … It was very much a realization from all sides that there needed to be a very clear and defined change of authority. That’s why things looked like they happened quickly from the outside, but it was actually part of a very deliberate process.”
When asked about whether Saretsky’s departure had anything to do with ongoing labour negotiations, Sims pointed to the former chief executive’s nine-year tenure, which saw profitability and the number of employees double.
“Airlines fly into headwinds every day of the week. Unionization is one of those, rising fuel prices is one of those, as well as challenges around launching (an ultra-) low-cost carrier against new competitors,” Sims said.
“There comes a time when you’re constantly flying into those and you say it’s as good a time as any for somebody else to take over.”
Analysts have cited concerns over execution risk when it comes to WestJet’s divergent growth strategy, which will see it pursue profits in both the ultra low-cost segment, as well as through wide-body, international expansion.
It’s a strategy that Sims has been involved with since his arrival at WestJet nine months ago, and one he plans on continuing to pursue.
“My background is about inducting wide-body aircraft, flying internationally, and using premium cabins like business class and full premium economy class,” Sims said.
“I’ve been down this road before, and I know the preparation you need.”