WestJet Airlines Ltd. is seeking to expand operations under a two-tier structure, gambling on maintaining labour harmony by giving its non-union pilots veto power over the carrier’s bold plans to launch a regional service that will pay reduced wages.

Management and the WestJet Pilots Association signed a memorandum of agreement this week that establishes pay and work rules at a wholly owned sub

sidiary that has an operating certificate for flying 40 turboprops – an ambitious breakaway from its business model of flying Boeing 737 jets since 1996.
 

Calgary-based WestJet will conduct a vote among its 8,500 non-union employees from Jan. 23 to Feb. 3 on the idea of starting a new regional carrier, but the focus will be on the 1,050 pilots casting their ballots. “If the pilots vote No to the [memorandum of agreement], we will not move forward with the regional airline initiative,” management warned in an internal memo.

The creation of a regional carrier poses a challenge to the airline’s reputation for an egalitarian corporate culture, but WestJet is staking its future on winning support for its proposal to expand into short-haul flights, the better to battle Air Canada and its regional affiliates, notably Jazz Aviation LP.

The pay scale for pilots at the new unit will be less than market rates for regional carriers, the memo said. As well, pilots at the subsidiary would be allowed to contribute up to 10 per cent of their wages toward a stock purchase plan, half of what WestJet’s existing employees are allowed to contribute. And WestJet regional pilots face paying 50 per cent of premiums for health and dental benefits, a cost-sharing 

arrangement that’s sharply higher than peers at the mainline.

Some WestJet pilots say the subsidiary’s wage scale will amount to 80 per cent of the regional industry median. But management dismissed suggestions that salaries and benefits at the new operation will degrade the airline’s corporate culture. “The total compensation package uses a similar pay mix to current WestJet employees, with a reduction in the actual dollar values that makes it competitive with other regional carriers,” the five-page memo said. “Ultimately, the regional airline is about continued growth, which will optimize our network and feed our 737 flying, so the 737 can continue to grow.”

WestJet said the regional carrier will preserve the corporate culture, resulting in “no second-class citizens,” while “realizing that we do need best-in-class costs to be successful in the regional space.”

The company’s efforts to sway its staff come eight months after unionized members of the Air Canada Pilots Association rejected a tentative labour pact that would have cleared the way for the country’s largest airline to forge ahead with a discount leisure carrier. ACPA is holding bargaining talks this month, with the aid of a federally appointed conciliator.

A non-union WestJet Regional Pilots Association will be formed to represent the interests of pilots at the subsidiary, according to a separate 28-page presentation by management marked “restricted and confidential.”

WestJet views the proposed regional service as an apprenticeship program for its mainline, which currently has 97 Boeing 737 jets. Management is touting job advancement opportunities, saying that for every four pilots hired externally to fly Boeing 737s, one regional pilot will graduate to the mainline.

The Canadian-built Bombardier Q400, with a maximum cruising speed of 667 kilometres an hour, is on WestJet’s shortlist of turboprops, as is the French-Italian ATR 72-600 series of planes. The Q400 could be fitted to seat 74 passengers while the ATR 72-600 seats 68 people.