Strike threat stings Air Canada

With Air Canada's sales and service agents in a position to walk off the job, the timing couldn't be worse for an airline that only recently returned to profitability, analysts say.

"This isn't going to make life easier for them in any way, shape or form," said Douglas Reid, associate professor of international business and strategy at Queen's University. "If they're able to get the (planes as full) as I'm hearing, even with fuel prices this high, this is insane for them to be out of the air for even a minute."

And with the Canadian Auto Workers' 3,800 members in a position to have walked off the job late Monday, and other unions, including Air Canada's pilots and flight attendants still at the bargaining table, WestJet is ready to add seats.

CEO Gregg Saretsky said the Calgary-based carrier, which is not unionized, has 15,000 to 18,000 empty seats a day and could add additional early morning or late night flights if there is demand.

"We'll fly extra sessions if demand warrants it, but we are not counting our eggs before they're hatched," Saretsky said, adding that he believes any labour action will be resolved "fairly quickly."

WestJet spokesman Robert Palmer said their call centre has already noticed an uptick in bookings as the strike threat looms, and the carrier is looking at bringing in additional call centre and airport service agents.

Reid said with passengers concerned their flights might not take off, "WestJet is the default safe choice now. Their bookings will spike. Everyone wins but Air Canada."

Air Canada has said it will maintain its regular schedule in the event of strike action, using managers and non-union personnel, but that there will be delays and passengers should use online and selfcheck-in services as much as possible.

Canada's largest airline has just started to improve on its performance, returning to profitability last year.

Karl Moore, a professor at McGill University's Desautels Faculty of Management, doesn't believe any job action will have a huge impact.

And with Air Canada competing against non-unionized carriers such as WestJet, "unions are going to have to give," he said. "They're not thrilled about that, and I don't blame them."

While Air Canada and the CAW were reporting progress Monday, there was still a large gap on pensions and wages. Employees have taken issue with executive compensation packages, including CEO Calin Rovinescu's.

Reid said that to try to convince passengers to take on the risk of flying with an airline that could be on strike, Air Canada will have to look at dropping ticket prices as a lure.

"The only I'd go anywhere Friday and buy an Air Canada ticket is if it's the cheapest thing going," he said. "If you give me a cheap ticket, you can't make money. Wasn't that the whole point of trying to get the company fixed, so it could make money?

"Just dumb."

Moore said Air Canada will be challenged to get the pension question settled, and then to have a happy, helpful workforce greeting passengers.

Read full article: Calgary Herald, June 14, 2011

Watch Professor Karl Moore's commentary on Canada AM.