WestJet as part of its goal of saving costs is having discussions about merging the two aircraft maintenance units of its mainline carrier and its regional airline Encore, pending a report by Seabury Consulting about the potential benefits of that option.
The Calgary-based airline is “very seriously considering” this merger that could save costs to fund its ambition of becoming a global carrier but which could present the challenge of what to do if some positions overlap and become unnecessary, says John Kelly, vice-president of technical operations at WestJet, at the MRO Americas summit in Atlanta.
Integrating the workforces of its two maintenance organisations is “going to be one of our key challenges” if WestJet decides to pursue a merger of the two, he says.
Seabury, an Accenture subsidiary focused on aviation, is expected to complete a report analysing a potential merger this year. Conversations about this merger option within the maintenance groups and with its vendors have reached a point where WestJet is comfortable discussing it publicly for the first time, says Kelly.
A 90% majority of WestJet maintenance engineers represented by the Aircraft Maintenance Engineers Association have approved a five-year agreement with the carrier effective 1 May, which is aimed at offering competitive compensation for the airline’s maintenance engineers.
WestJet Encore now has 47 aircraft in service compared with 115 in service for the mainline WestJet, according to Cirium’s Fleets Analyzer, which is one of the reasons the airline considers it may be time to combine maintenance operations.
The WestJet fleet includes 13 Boeing 737 Max 8 aircraft that are in storage while Canada’s aviation regulator has grounded 737 Max aircraft for safety reasons. The airline has deployed aircraft in its fleet to operate flights on routes previously serviced by 737 Max 8 aircraft, which has “put a lot of stress” on maintenance crews to keep all the aircraft operating amid their increased flights, he says.
“Everybody pulled together to overcome this grounding of the Max airplane,” Kelly says. “We’re doing a good job.”
WestJet suspended all 2019 financial guidance provided in December and February after Canada’s aviation regulator grounded the 737 Max aircraft, highlighting uncertainty about how long they could remain grounded. The airline had a tough year in 2018 following investments aimed at expanding and strengthening the company, including the launch and subsequent expansion of ultra low-cost carrier Swoop. During 2018, WestJet's operating profit dipped 64% to C$155 million ($118 million), while net profit plunged 67% to C$91.5 million.
Regulators grounded the 737 Max following two fatal crashes of the aircraft within five months of each other. Safety officials worry the crashes could be linked to flight control software created for the aircraft designed to automatically adjust the stabiliser to prevent the aircraft from stalling. Following the fatal crash of Lion Air flight 610 in October 2018, Kelly says WestJet changed its procedures for its Max 8 flight crews to cut electricity to the stabiliser and operate it manually at the first sign of trouble with that flight control software, called the manoeuvring characteristics augmentation system.
Source: Cirium Dashboard
