How recent crises have forced WestJet to rebuild trust with unhappy customers

WestJet has been taking its customers’ temperature.

In a biopsy of its base’s goodwill — via focus groups and customer surveys — it found concerns that could not be ignored.

“There was a clear message — like a wish from our guests — to actually get a bit more background on what actually happened,” Diederik Pen, WestJet Airlines Ltd. president and chief operating officer, said in an interview.

This year, WestJet has endured a string of isolated crises — two extreme weather events and one strike — together causing more than 2,000 cancelled flights, stranding passengers across the continent with few options for immediate recourse. It has contributed to a dour mood among WestJet’s client base.

But despite it all, aviation experts aren’t convinced WestJet is facing an immediate threat as broader forces continue to unravel in Canadian commercial air travel.

After a promising post-pandemic 2023 in which WestJet said it posted a profit and centralized its offerings in Western Canada, a multi-day deep freeze across the Prairies in January cancelled more than 460 WestJet flights. Chaotic negotiations with its mechanics then led to an unexpected strike on Canada Day long weekend, which forced nearly 1,200 flights to be cancelled. That was followed less than two months later with a midsummer hailstorm in northeast Calgary that damaged 20 aircraft — a 10th of its fleet — and cancelled at least 590 flights. As of its most recent update, eight aircraft remained out of service.

Displeasure among its customer base prompted the airline to respond with a direct letter to rewards members in early October, calling it a “tough summer” that “didn’t meet the expectations of travellers.” In the letter, WestJet committed to improving its online experience for people managing cancellations or travel changes, standardizing cabins in aircraft it integrated and acquired from Sunwing Airlines, Swoop and Lynx, and refreshing its food and beverage options.

The decision to send the letter “was not taken lightly,” Pen said in an interview at WestJet’s headquarters at Calgary International Airport in October.

What headwinds has WestJet faced?

With operations based out of Calgary, WestJet was disproportionately affected by the cold snap and hailstorm, while Air Canada and Porter were relatively unscathed.

It has nevertheless heaped on fresh challenges for an airline already undergoing significant changes, particularly in its retrenchment in Western Canada and retreat from Eastern Canada.

Duncan Dee, former chief operating officer at Air Canada, a role he left in 2006, said the past year in isolation shouldn’t concern WestJet. However, more troublesome has been employee shortages at air-traffic control centres and labour disputes involving security screeners in recent years, both factors out of WestJet’s control.

“If you just take the year in isolation, then I would probably not be concerned, but I don’t think you can do that,” Dee said in an interview.

“(From) 2022 to 2024, they’ve had a significant number of challenges.”

WestJet has suffered self-inflicted wounds in recent years, Dee argued. Since moving private under private-equity firm Onex Corp., WestJet has drifted from its “employees as owners” model, which encouraged employees to become financial stakeholders in the company.

As of late, the airline has gone through several labour disputes, beginning with tense bargaining with its 3,100-person cabin crew in 2021. WestJet narrowly avoided strike action from its mainline pilots in August 2023 with an 11th-hour deal, and stared down another picket line this spring amid bargaining with WestJet Encore pilots responsible for its regional aircraft, which rejected its first tentative agreement but reached an agreement two days before a planned strike.

Those conclusions were not reached in WestJet’s first-ever period of collective bargaining with its mechanics, represented by the Aircraft Mechanics Fraternal Association (AMFA). A chaotic week ahead of Canada Day long weekend saw the two parties’ tentative deal break down, prompting the federal government to send them into binding arbitration. But mechanics defied that order, striking for 48 hours as Canadians attempted to fan out across the country for the holiday.

Pen said he’s reflected on those negotiations, saying it’s generally in the best interest of all parties “that you finish what you started.”

“I think the lesson both AMFA and us could do differently is not walk away from the negotiations,” Pen said. “I remember they got very angry . . . and walked out. I think together, we should have just taken the responsibility upon us to finish that negotiation.”

But those negotiations have thrust WestJet into a new era in which it appears to be coming into increasing levels of conflict with its employees, Dee said.

“They’ve now seen an entire year of labour conflict at WestJet, which is something their consumer base is not necessarily used to and, in many cases, (they) probably chose WestJet because they felt it wasn’t subjected to the same labour strife as other airlines,” Dee said.

What is the impact of WestJet’s new focus on Western Canada?

Meanwhile, the hailstorm that knocked 10 per cent of its fleet out of commission was yet another calamity for the airline. “You can’t even comprehend that, and that just caused mayhem,” Pen said.

It was a strange coincidence, experiencing two massively disruptive weather events over eight months — both of which had little effect on WestJet’s competitors, and was partly a result of the airline consolidating its base in Calgary over the past two years. In doing so, it has ceded much of Eastern Canada to Air Canada and other small airlines. (WestJet, for example, currently operates one to two continuous daily flights from Calgary to Halifax, though it has said it is planning to increase its connectivity between Western and Atlantic Canada.)

Barry Prentice, transportation expert and professor at the University of Manitoba, said WestJet has used this shift to offer more flights to international locations because those trips are often more profitable than long-distance domestic flights. By taking hold of Western Canada, he said, WestJet has also reduced competition with Air Canada, which has reduced its services in the western market.

But a spate of weather events wouldn’t be enough to convince WestJet’s executive class that hunkering down in Calgary was the wrong move, Dee said. “There is no other hub (in Canada) that isn’t subject to severe weather,” he said. Pen said WestJet is leasing facilities for its service equipment so it’s not stuck outdoors during cold weather, and it’s been working with airport authorities to adjust materials and practices during deep freezes.

The 18-month closure of Calgary International Airport’s B concourse, the result of significant damage sustained during the hailstorm, has also been a major disruption, Pen said, resulting in longer taxi times for planes.

“No one wants to take responsibility for it, but an entire concourse is gone for the next 18 months,” Pen said. “We’re not throwing rocks at Calgary airport — they’re our partner — but it has an impact.”

YYC Airport has insisted the situation has had “no impact to our guests and passengers.”

Pen also said WestJet refinanced 100 per cent of the debt it incurred during COVID-19 in 2023.

How does WestJet fit into Canada’s current airline market?

Despite its challenges, WestJet remains one of the few players in a relatively uncompetitive Canadian market. The Competition Bureau recently obtained court orders requiring WestJet and Air Canada to provide information for its study launched this summer to examine potential changes to improve competition in Canada’s passenger air travel industry. WestJet argued in a submission that airline competition in Canada is currently the most intense it’s been over the past five years.

“(WestJet is) protected in the domestic market because we have so few choices, and as a result of that — even if they do have reputational damage — the public has no choice but to forgive them and carry on,” Prentice said.

Between Lynx Air’s bankruptcy and WestJet folding Swoop Airlines into its mainline, Canada’s ultra-low-cost-carrier industry has suffered several blows that only consolidated WestJet and Air Canada’s position as one of the few airlines on which Canadians can spend their travel dollars.

WestJet CEO Alexis von Hoensbroech has lamented high airport fees as one of several barriers to lowering ticket costs in Canada. The airline has attempted to offer a semblance of low-cost flying with its no-frills UltraBasic offering that allows one small carry-on and seats passengers at the back.

“It sends a signal into the market that we are not about to cede a centimetre of our market share to anyone,” Dee said.

Irrespective of its challenges and advantages, WestJet will need to restore trust in its brand over the coming years, Dee and Prentice both said. WestJet will need to reinvigorate its passenger protections, Dee said, and reinvest in self-service customer tools that can help in moments of crisis — the latter a move WestJet promised to customers in its apology.

Pen, meanwhile, has recently held several internal meetings to better understand where the airline can improve.

“I have sleepless nights and I can’t hide it,” he said. “We regroup, we evaluate, we learn. I make myself vulnerable. I’m not someone who yells, I’m not someone who points fingers.

“What went well? What did we learn? So it is stressful, (but) I’ve got a very mature team.”

mscace@postmedia.com
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Editor’s note:?An earlier version of this article misstated the number of aircraft currently out of service due to the August hailstorm. Additionally, the article has been amended to say WestJet refinanced debt it incurred during the pandemic, rather than having repaid it.