The head of Air Canada's pilot's association says he's worried the airline's plan to start a low-cost carrier is just a way of outsourcing good jobs to other countries while offering no benefit to Canadians.
That's what Paul Strachan told the CBC's Lang & O'Leary Exchange in a recent interview. The head of the pilot's association worries that Air Canada's plan to launch a low-cost domestic carrier could simply be a red herring that would allow the airline to download the costs of the new venture on to the legacy carrier, while any new revenues move to a subsidiary.
He pointed to the example of Australia's JetStar, which started as a low-cost arm of Qantas for domestic flights in Australia. But it quickly grew to become a major cog in the carrier's Asia operations, all while operating outside its traditional business model so employees and travelers didn't see the same level of benefits.
He says the pilots aren't opposed to the new carrier per se, but they simply want to see more details to show its sustainability.
"We're looking at a business plan here," he said. "We want to see the revenue projections. Where will the costs reside? That's a big question for us."
He says pilots are best equipped to plan for the airline's future because they have far less turnover than the company's executive ranks. And he dismisses the notion that high employee costs have crippled the airline industry and caused it to be unprofitable.
"This is an $11 billion business, that's a heck of a lot of revenue," he said. "When you looks at pilot costs as a component of overall revenue, you're talking about less than four per cent," he said.
"So the concept of carving off 25 per cent from pilot revenue — which was already done about a decade ago — somehow improving the sitution to where it becomes profitable is ridiculous."
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