Air Canada, WestJet Cabin Crew Unions implore Federal Government to ‘Let Us Work’...
 

Air Canada, WestJet Cabin Crew Unions implore Federal Government to ‘Let Us Work’, or bail us out

https://www.businesswire.com/news/ho...0731005394/en/

With low consumer confidence in travelling , a second wave already poking through https://www.bbc.com/news/health-53579731, it is certain that there is no way the quarantine measures should nor will be relinquished anytime soon. The other part of the crews argument , however , yes the aviation industry in Canada will need a lifeline eventually, as has been done here in Europe.

If this goes on much longer (it will) it would not surprise me to see many/most airlines being state owned or partially state owned. The airlines that refuse to take the medicine that come along with state "participation" will collapse.

I expect rather than taking a direct ownership role in Canada the federal government will instead offer loans to the aviation sector as were extended to automakers in the 2008 financial crisis. I believe some sort of sector support in inevitable given the unprecedented situation.

If there is no viable path back to profit for WestJet in the next few years, I expect Onex will cut their losses, shut the company down, sell off the assets and write down their investment, as opposed to taking on the financial burden of government loans.

I do not believe Mr Schwartz , whom after so long finally succeeded in entering the aviation world, will be so quick to exit this market.

A vaccine will be produced , and consumer confidence will return and the crisis will diminish. The international market is estimating to fully recover to last years level of traffic in 4 years , and in North America domestically it is estimated to have recovery of domestic traffic to 2019 levels by 2023. https://www.bbc.com/news/uk-scotland...iness-53628071

I believe Mr Schwartz was quoted as saying this crisis is an opportunity.

“Our focus will be on positioning our companies to navigate this downturn and to be ready to prosper in the recovery“

Read more at: https://www.bloombergquint.com/busin...tressed-credit


After this great crisis there will most definitely be a craving for revenge discretionary spending in the public and thus new growth opportunities for the aviation sector.

In Onex’s most recent earnings call , Mr Schwartz further elaborated

“ our private equity portfolio has several businesses directly and negatively impacted by COVID-19. Others that will suffer varying degrees of headwinds and several that aren't really affected much at all. In each case though, our businesses are important contributors to their markets, with a strong reason to exist and to grow.”https://finance.yahoo.com/news/edite...211128278.html

I am grateful it wasn’t an asteroid that devastated the world for that would have truly decimated the frivolous world of discretionary spending.

Shutting it down is unlikely. Letting it go into receivership and then the government can come in with a recovery plan more likely.

#RefundPassengers first, then Canadians might be willing to help.

I can believe that the WestJet that post-Covid Canada can support as it feels the full effects of an economic crisis resulting from the policy that condo flipping and subsidized windmills are suitable substitutes for manufacturing and energy production might not be a business Onex is interested in owning but I can't foresee a situation other than total societal collapse where WestJet as an operating entity is worth less than it's constituent parts that the market is already flooded with.

Hopefully they loan out on more draconian terms than their dance with automakers. The auto industry recovered, but the government still collected only 75cents on the dollar many years later:

https://www.theglobeandmail.com/repo...ticle23828543/

I remember hearing that however think government loans are a more likely aviation industry aid vehicle than assuming partial ownership of the company. That is of course just MHO.

These unions have some nerve! They're perfectly fine with packed flights with no seat blocking, unrestricted travel, no quarantine, no refunds - as long as they get paid to "work" (handing out a Ziploc bag with a bottle of water and a bag of pretzels while they spend the entire flight in a jumpseat because you know, the virus :D )

Yeah, it sucks about the times we're in. So many businesses have either shut down or have had to adapt to new protocols, buying PPE, plexiglass barriers, limited operations, whatever, without any government bailout. The government has decided (by ending CERB, changing EI policies with new job training, etc) that people need to seek different employment. That means flight attendants are going to have to work at Starbucks or Walmart, or do Uber Eats / Skip, or something else that's in demand right now.

To be clear what the union is asking for is:
- Canada to remove travel and 14 day isolation restrictions.
- Force the Airlines to provide PPE.

Item one is a non-starter. 80-90% of Canadians are happy with the boarder restrictions on Americans coming into Canada. That decision should be driven based on a risk assessment. Open up Portugal, Cuba or other markets with low infection rates. Keep the high risk ones closed.

Item two is a publicity stunt. The airlines are providing PPE. COVID or no COVID they are required to provide employees with appropriate PPE. It is not clear to me why the government should order the airlines to do things they are already doing.

They then are demanding if the government does not do their two asks they should bail out the industry. That a pretty big jump. So big that I would just toss the entire union move up to a publicity student and ignore it. IF they were serious at wanting to work on a solution for the industry they would have come with something than that.