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WestJet “disappointed” over cabin crew certification, plus fare increases...

WestJet “disappointed” over cabin crew certification, plus fare increases likely coming

Wednesday, August 1, 2018

CALGARY — WestJet says the Canada Industrial Relations Board has issued an interim order to allow the Canadian Union of Public Employees to represent cabin crew members.

The union had filed an application with the CIRB on July 10 to represent the flight attendants after a majority signed cards stating they supported joining CUPE, including WestJet’s mainline carrier and low-cost carrier Swoop.

But WestJet said Tuesday night that the interim order does not include members of Encore or Swoop cabin crew.

The airline also said it has until Aug. 10 to make submissions on which positions to exclude from the bargaining unit.

The move by CUPE to sign up flight attendants follows the unionization of the airline’s pilots who are represented by the Air Line Pilots Association.

“We are disappointed by this outcome but respect the rights of our employees to choose their representation,” said WestJet president and CEO Ed Sims in a statement. “We now shift our focus to working effectively with CUPE in the interest of success for WestJet as a whole.”

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News of the CIRB decision comes hours after the airline said it had posted its first quarterly loss in 13 years.

WestJet said it lost $20.8 million in the second quarter and warned that passengers should expect to see higher fares later this year to compensate for rising fuel costs that contributed to the loss.

“I think this is the way guests now need to think is that airfares will be rising just as they did back in 2010, 2011 when we had the last major fare spike,” Sims said in an interview.

The increases will likely be felt this fall after the negative effects on demand from a threatened pilots strike dissipate.

“We firmly believe that by the time we get to late September, October we’ll start to see more of those fare increases sticking and more guests understanding that we are passing on the cost of the fuel increase.”

Even though the second-quarter results beat analyst expectations, Sims conceded they were “disappointing” and that its 2018 results are “off track”.

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“We are now operating in a very different fuel and competitive environment,” he said during a conference call.

The Calgary-based airline said it was forced to offer discounts that partially offset five fare increases this year to stimulate travel and restore passenger confidence.

“To build flow-on benefits like ancillary revenues, we had to be aggressive both to recover those guests who would otherwise have booked away or booked with a competitor but also to compete with this almost unprecedented level of peak season capacity,” Sims added.

The threat of the strike wiped out tens of millions of dollars in profit in the second quarter that pushed the airline to break a 52-quarter streak of profitability, chief financial officer Harry Taylor said in a conference call.

“We start rebuilding from today,” Sims said in an interview. “I think when any sports team breaks their winning streak their first focus is how do you rebuild that streak.”

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