First of all, I think that both of you are mostly right.
Unfortunately, the thinking that leads one to say "It's up to the work force to evaluate" is a very slippery slope.
The workforce doesn't get to evaluate anything. If they don't do as they are told, and accept whatever they are offered, their work will be farmed out to non - union, cheaper LCC's, and there is nothing they can do about it. It shouldn't be that way, but c'est la vie.
The operation is at an optimum size as it is. It is big enough to be able to take up the slack if the subcontractors raise their prices and need to be taught a lesson, and small enough to be efficient, especially if it becomes a "one type" (so slightly smaller) operation.
One thing they will not do is expand.
Past performance and seasonal expansion and contraction is not an indication of the future. (Maintenance will not be done "seasonally" anymore) Since TS236. the airline is seen as an expensive liability.
I don't agree that they will be sold, though. The uncertainty would rock the share price (sacred cow) and integrating workforces (for example with Westjet) would be difficult to do.
Just my thoughts, and an interesting discussion.