Will employee discontent hurt WestJet?

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Nearly two years ago employees at WestJet overwhelmingly endorsed the creation of a new regional carrier to allow the airline to ratchet up revenue by serving markets that were too small for its Boeing 737s to serve profitably. Now at the beginning of 2014 WestJet finds itself facing growing employee frustration over the rapid-fire changes to its business and union drives among its flight attendants and pilots.

Cracks in WestJet’s historically favourable employee relations emerged in 2013 with the soft roll-out of its new Premium Economy seating in April. During that time, customer confusion surrounding the new product forced flight attendants to assume the role of traffic cop to ensure only passengers that paid for the upgrades benefitted from the extra legroom. Acknowledging the undue pressure placed on flight attendants, WestJet CEO Gregg Saretsky issued a public apology to the carrier’s frontline employees who dealt with the snafus.

During late 2013 the carrier’s pilots rejected a tentative agreement while a new new group dubbed the WestJet Professional Pilots Association (WPPA) is pushing to become the union representative. The Canadian Union of Public Employees (CUPE), meanwhile, is conducting a unionization drive among WestJet’s flight attendants.

In addition to the launch of its new regional carrier Encore and the introduction of fare bundles that feature the carrier’s Premium Economy option, WestJet during 2014 is spreading its wings with new long-haul flights to Dublin and establishing a crew base in Toronto.

Acknowledging that 2013 was a year of change at WestJet, a carrier spokesman says most of the new initiatives involved the carrier’s frontline employees, “and some anxiety was inevitable. Change is difficult and not everyone does well with it.”

Outlining its concerns, the WPPA warns the “increasing burden placed on all employee groups in pursuit of corporate profits is damaging our product”.

While WestJet’s mostly positive customer service has not yet suffered any major public setbacks, even a small number of disgruntled employees in a service industry like the airline business can threaten to diminish the passenger experience, says Hamlin Transportation president George Hamlin. “You don’t want that happening,” he says.

Positive relations with flight attendants are particularly important in today’s airline business, Hamlin remarks, as booking and check-in are increasingly done on the web and through kiosks. With so much automation embedded in the passenger experience, “flight attendants are where the real interaction takes place,” he notes.

With more than 85% of the carrier’s employees owning shares in the airline, WestJet’s spokesman concludes: “We have a vested interest in its [WestJet’s success]. It is our company and our money, and that’s how we see things at WestJet.”

Maintaining positive employee relations is especially important for WestJet at this juncture, given the carrier’s stated goal of expanding its share of higher-yielding corporate customers. Leisure travellers more motivated by price “will put up with quite a bit”, says Hamlin. Higher yielding corporate travellers expect a certain level of customer service, and those passengers “are where the profitability is,” he says. Those are the customers airlines “cannot afford to lose.”

It is tough to determine just how deep employee discontent runs at WestJet, or whether the threat to unionize is simply a bargaining tool. “There have been a handful of union drives over the years and none have been successful,” the carrier’s spokesman notes. “We believe strongly in PACT [Proactive Communications Team], as do our employees..we do not believe that a third party, an outside party with its own agenda, will be beneficial for either our WestJettters or our company.”

But union rhetoric continues as the WPPA declares that damage to employee morale and guest experience, “must be addressed”.

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