Greg Saretsky Immediate Retirement

[a330pilotcanada]

Good Morning All:

The question that begs to be asked “did he fall or was he pushed”?



Effective immediately, WestJet Airlines chief executive Gregg Saretsky retires - Calgary - CBC News (http://www.cbc.ca/news/canada/calgary/westjet-saretsky-retires-calgary-airline-1.4567268)

[Commander Taco]

Retire at 4:30 in the morning? I think the answer to your question is rather obvious. The only mystery is the nature of the shortcomings that led to his early AM “retirement”.

[+TSRA]

I would gather that no one involved in the process was actually awake at 0430. Perhaps the timing of the release was to give a couple hours before the markets opened to limit the inevitable slide in stock price. From what I’m told, rumours about GGG’s imminent demise were floating around the Teal Palace late yesterday afternoon, so perhaps not so sudden.

I would expect nothing less than an immediate departure of a CEO upon notifying the BoD of intent to retire as it keeps the leadership going in the right direction rather than floundering through a couple weeks or months.

The fact that GGG was not fired nor was language used similar to that for Luc Jobin (CN) says this was likely a mutual decision. Whether the offer to retire was extended by the Chairman of the Board or whether he is leaving of his own accord, I doubt we will ever know.

[a330pilotcanada]

Good Evening All:

Of interest at close of market today (just a snapshot) Air Canada closed at $27:03 up .28% which gives it a market cap of 7.38 Billion with a P/E of 3.67
West Jet closed at $24:18 down 4.55% which gives it a market cap of 2.75 Billion and a P/E of 9.99

[J.O.]

Normally, the announcement of a CEO’s retirement from a publicly traded company is made when financial results are published. They almost always include a transition period to allow the new CEO to be mentored into the role.

IMHO, this was a BOD decision. The B767 mess put him on the brink but the decision was almost certainly prompted by the company's recent loss at the CIRB over Swoop’s efforts to recruit pilots from mainline.

[Mostly Harmless]

I am glad he is gone. He personally destroyed the entire culture of the company. I will be cautiously optimistic that the new guy is better.

Interesting, if not poetic timing, announcing his retirement and a new CEO at the dawning of new day.

[Willie Everlearn]

Westjet seems to have lost its way, judging by the decisions taken over the last 4 years. 757s, 767s, Encore, 787s and now Swoop?
Historically, the longevity of airlines in Canada isn’t impressive. Certainly, from what we know of the LCC model, their demise generally stems from abandoning the LCC model, which Westjet have clearly chosen to do.
This may be the beginning of the end for Westjet if a suitable CEO can’t be found to exit the present self-induced turbulence.

Willie :confused:

[extreme P]

WJ market cap is shown at 2.77 billion dollars. I predict they might be able to hang on a bit longer.

[Mostly Harmless]

https://www.youtube.com/watch?v=WD73a1trdJ0

[Willie Everlearn]

Oh, oh... now disgruntled Flight Attendants stirring the pot. Is this yet another sign of the turbulence within?
Disgruntled pilots still without a CBA. (Sound familiar? C3 management successfully dodged that bullet for quite awhile.)
Saretsky resigns with no "airline god" in Canada ready to step in and manage the company.
Swoop's creation causing an internal bun fight.
Westjet management seriously modifying the "LCC model" that made them successful.

Okay, I'm awake now. Nothing to see here.

Willie :ok:

:confused::confused::confused:

[extreme P]

Oh, oh... now disgruntled Flight Attendants stirring the pot. Is this yet another sign of the turbulence within?
Disgruntled pilots still without a CBA. (Sound familiar? C3 management successfully dodged that bullet for quite awhile.)
Saretsky resigns with no "airline god" in Canada ready to step in and manage the company.
Swoop's creation causing an internal bun fight.
Westjet management seriously modifying the "LCC model" that made them successful.

Okay, I'm awake now. Nothing to see here.

Willie :ok:

:confused::confused::confused:

You paint a pretty bleak future for WJ.

Any chance your crystal ball knows when the doors are closing? I'd settle for a major stock correction for the short opportunity.

"In its fourth quarter and year-end results for 2017, the airline has announced its 51st consecutive quarter of profitability..."

[Willie Everlearn]

I seriously doubt WJ is going to disappear anytime soon. :ok:

I DO think the model modifications to what makes them successful triggers the Master Caution.
When the employee/investor/owner wakes up and realizes WTF is going on around him/her it could cause some issues for management. (IMHO)
Which begs the question, how do you make a small profit in the airline business? Or, how long does it take to turn quarters and quarters of profits into quarters and quarters losses?
I guess that depends on how much you dilute your product and to what extent you compete against yourself.

Willie

[extreme P]

So your argument is that 51 consecutive quarters of profitability is getting away from the success of the LCC model?

[Willie Everlearn]

I didn’t say that.
There is obvious and apparent unrest at WJ and extreme change surrounding their original LCC model. Which is a dangerous environment, 51 quarters or not.

Profit in any quarter can abruptly come to an end in the airline business and go on for more than one or two quarters. I’m not naive enough to think otherwise.

Argument? I’m not arguing anything. I’m simply making a personal observation that reflects a personal opinion. Whether or not you agree is immaterial to me.

I doubt WJ is going to disappear anytime soon. I do believe competing with yourself has a history in the airline business of not going very well for those who choose to do that. WJ, through Swoop and to a certain degree Encore, is nothing more than competing with oneself.

Willie :ok:

[+TSRA]

I don't necessarily see Encore and Mainline as being in competition. Encore serves many markets that are simply not suitable for a 737 service and help to feed passengers onto those jets. The fact that some of the 737 routes were transferred to the Q400 simply means the route was better served by the smaller aircraft and that frees up a 737 to go somewhere else the Q400 can't (either because of range or size).

If all WestJet did was keep the LCC model with both the 737 and Q400, things would go swimmingly.

Swoop, on the other hand, is using the same aircraft on a relatively similar route segment. I doubt highly that WestJet is about to abandon the YVR-YYZ sector when Swoop starts YXX-YHM, yet they're damned near the same route for a lot of passengers going somewhere in the western GTA. The company is definitely competing against itself for the same passenger. I can't wait for the first IROP when a teal coloured tail is pushed into service for a pink coloured one, or vice versa. I may even send that pic to the WJ MEC, buy some popcorn and a lawn chair, and sit back and watch the fireworks.

The biggest problem WestJet has right now is they are abandoning more than just the LCC model. I don't know how many years it took them, but it was a long time from when they started to when they first operated sectors out of YYZ. They've always been the slow-build airline, and that is what has brought 51 quarters of profit. Now they're trying to finish building a regional airline, at the same time as they are building a ULCC, at the same time they are trying to build a long-haul segment, as well as the infrastructure that goes along with this massive expansion. I hope not, but the Calgary Airport Authority might be moving into an unused hangar just as the GTAA did if things do go down the wrong path.

Maybe this new CEO will put the brakes on some of this expansion after he realizes it is far easier to lose a billion than make a million in aviation.

But then, if anyone can do it, WestJet can, right? :rolleyes:

[Willie Everlearn]

I’m expecting WJ to steady the ship, so to speak, and I don’t see them disappearing any time soon but I maintain the possibility of shutting down is not impossible.

My sense is they’re entering or have already found themselves in financial turbulence. Their strongest market, Alberta has fallen on hard times and the WJ passenger market has fallen by over 40% as a result. Not good.

Wardair switched from charter airline to scheduled airline almost over night. They needed feeder traffic too because Time Air and Air Nova had already partnered up so it meant buying MD88s and F100s to provide that feeder traffic. Lots of hiring ($$$).
Lots of new planes ($$$)
Lots of pilot training ($$$)
Increased maintenance costs ($$$)
Increased fuel costs($$$)
Increased airport fees ($$$)
..I could go on.
Where is Wardair today?

My sense is that Westjet have just entered a similar phase at a time when Canadian oil is all but off the market, fuel prices are on the rise. Load factors on the decrease. Not at all encouraging.

51 quarters of profit, yes. But the reality is, those quarterly profits are down. Significantly. Most recently, down by almost half compared to the same period last year. How can that be positive.

I think I’ll wait and see how things go. Swoop or no Swoop.
Willie :ok:

[Left Coaster]

In a move that will reduce competition in domestic air travel in Canada to only two significant carriers, the PWA Corporation announced today that it planned to acquire all outstanding shares in Wardair Inc. of Toronto.

The offer of $17.25 a share ($14.40 in United States currency) has been valued at $248 million ($207 million) and was accepted by Wardair's founder and controlling shareholder, Max Ward, a former bush pilot. Wardair's class A shares soared $7.25, ($6.05) today, to $15.875, ($13.25) on the Toronto Stock Exchange.

The deal, announced by PWA, owner of Canadian Airlines International, will end a campaign by Wardair, using cut-rate fares, to challenge Canadian Airlines and the state-controlled carrier, Air Canada.

In addition, the deal is expected to hasten moves by the Canadian Government to sell its 55 percent stake in Air Canada. Some industry analysts expect a new share offering to come later this year.

Established in 1953, Wardair pioneered the air transport of heavy equipment in Canada's Far North. In the 1960's and 1970's the airline grew rapidly as a charter operator to Europe. But it ran into financial difficulties in the last two years as Mr. Ward fought to turn the airline into a scheduled carrier.

At a news conference in Toronto, Mr. Ward said that recent losses had forced the sale. ''We had cash-flow problems that were going to catch up with us,'' he said.

Continue reading the main story

That's actually what happened...sorry for the the drift. As for Mr Saretksy and his foibles at WS, he ran into a problem when he attempted to put his greasy paws on the culture and make it his own...pushed too hard and too far and look what he got.

[Willie Everlearn]

Thank gawd Mr. Easton and friends bought the operation before those cash flow “concerns” turned into no cash
“problems”.

Rapid expansion. THAT’s actually what happened to Wardair.

The present similarities at Westjet should be concerning to Westjet Owners. This is a critical phase for them I’d say.

Let’s hope for the best.

Willie :ok: