WestJet complains in Ottawa about Air Canada pension request
Thread Starter
WestJet complains in Ottawa about Air Canada pension request
Good Morning All:
I have no problems for excutives of a company to lobby government but when it is at the expense of people who are retired with no representation I find this to be amoral.
It would suggest something about their culture.
From the Toronto Globe and Mail
WestJet complains in Ottawa about Air Canada pension request
Randall Palmer
Ottawa — Reuters
Published Tuesday, Dec. 18 2012, 3:01 PM EST
Last updated Tuesday, Dec. 18 2012, 3:04 PM EST
WestJet Airlines Ltd. is concerned about special treatment for its main competitor, Air Canada, which is seeking leniency over a gaping pension fund deficit, and records show that WestJet launched a concerted lobbying campaign with the federal government over pensions.
Executives from WestJet, the country’s second-largest airline, held a series of meetings on pension issues on Nov. 20-21 with four members of cabinet, including Finance Minister Jim Flaherty, who is in charge of the Air Canada pension file. WestJet executives also met with numerous senior officials as well as lawmakers from the governing Conservative Party.
The meetings and the topic of pensions are recorded in the federal Register of Lobbyists.
Mr. Flaherty is considering a request filed by Air Canada for a 10-year extension to the cap on special payments it must make to reduce the deficit in its defined-benefit pension funds, which reached $4.2-billion at the start of 2012.
“We won’t comment on the specifics of individual meetings like these,” WestJet spokesman Robert Palmer told Reuters. “But at a general level, we are concerned about the impact on the state of competition caused by Air Canada repeatedly asking the federal government for special assistance, especially at a time when they are expanding their fleet, buying new aircraft and have billions of dollars on the balance sheet.”
In 2009, Air Canada won agreement from the government for a moratorium on making special pension deficit payments through 2010. After that, Ottawa agreed to a cap on such payments that would rise from $150-million in 2011 to $225-million in 2013.
Air Canada chief executive officer Calin Rovinescu wrote Mr. Flaherty on April 26 to ask for a cap of $150-million a year in special payments from 2014 through 2023.
The airline has won the reluctant support of its unions for the plan, as well as the backing of its retirees, which Mr. Flaherty had said was a prerequisite for him to consider an extension. Air Canada was hoping for a decision by Mr. Flaherty this year.
A decline in interest rates used to calculate solvency gaps in the plans has badly hurt Air Canada, as with other employers with defined-benefit pension plans.
A reduction in the discount rate to 3.3 per cent from 4.5 per cent resulted in an approximate doubling of Air Canada’s pension gap to $4.2-billion last year.
It was not clear whether WestJet was lobbying against any extension of Air Canada’s pension cap, or seeking a higher cap, or pushing for other changes. Mr. Flaherty’s office declined to say whether he was moved by WestJet’s representations.
“We cannot comment on the specifics of individual companies. We also do not speculate about possible policy actions or discuss what might be under consideration,” Mr. Flaherty press secretary Kathleen Perchaluk said.
WestJet has been able to compete successfully with Air Canada as a no-frills carrier largely because it has a cost structure about one-third lower than Air Canada’s, though the spread between the two has shrunk as the result of aggressive measures by Air Canada.
In its representations to the government, WestJet met Transport Minister Denis Lebel, Labour Minister Lisa Raitt and Citizenship and Immigration Minister Jason Kenney, who is the senior minister for Alberta, where WestJet is based.
WestJet also talked pensions with the most senior bureaucrat in the government: Privy Council Office Clerk Wayne Wouters, deputy finance minister Michael Horgan and assistant deputy finance minister Jeremy Rudin, the point man on pensions.
Unlike Air Canada, WestJet does not have a defined-benefit pension plan. It offers an employee share purchase plan, and matches employee purchases of shares 1:1.
Air Canada’s legacy as a national carrier once owned by the government has worked for and against the airline. The government is unlikely to allow it go under, but its past means it is saddled by decades of regulations, crippling labour agreements and pension obligations.
The airline has worked hard to whittle back the costs, and on Tuesday it was unveiling a new low-cost leisure carrier, Rouge, intended to attract budget vacationers.
I have no problems for excutives of a company to lobby government but when it is at the expense of people who are retired with no representation I find this to be amoral.
It would suggest something about their culture.
From the Toronto Globe and Mail
WestJet complains in Ottawa about Air Canada pension request
Randall Palmer
Ottawa — Reuters
Published Tuesday, Dec. 18 2012, 3:01 PM EST
Last updated Tuesday, Dec. 18 2012, 3:04 PM EST
WestJet Airlines Ltd. is concerned about special treatment for its main competitor, Air Canada, which is seeking leniency over a gaping pension fund deficit, and records show that WestJet launched a concerted lobbying campaign with the federal government over pensions.
Executives from WestJet, the country’s second-largest airline, held a series of meetings on pension issues on Nov. 20-21 with four members of cabinet, including Finance Minister Jim Flaherty, who is in charge of the Air Canada pension file. WestJet executives also met with numerous senior officials as well as lawmakers from the governing Conservative Party.
The meetings and the topic of pensions are recorded in the federal Register of Lobbyists.
Mr. Flaherty is considering a request filed by Air Canada for a 10-year extension to the cap on special payments it must make to reduce the deficit in its defined-benefit pension funds, which reached $4.2-billion at the start of 2012.
“We won’t comment on the specifics of individual meetings like these,” WestJet spokesman Robert Palmer told Reuters. “But at a general level, we are concerned about the impact on the state of competition caused by Air Canada repeatedly asking the federal government for special assistance, especially at a time when they are expanding their fleet, buying new aircraft and have billions of dollars on the balance sheet.”
In 2009, Air Canada won agreement from the government for a moratorium on making special pension deficit payments through 2010. After that, Ottawa agreed to a cap on such payments that would rise from $150-million in 2011 to $225-million in 2013.
Air Canada chief executive officer Calin Rovinescu wrote Mr. Flaherty on April 26 to ask for a cap of $150-million a year in special payments from 2014 through 2023.
The airline has won the reluctant support of its unions for the plan, as well as the backing of its retirees, which Mr. Flaherty had said was a prerequisite for him to consider an extension. Air Canada was hoping for a decision by Mr. Flaherty this year.
A decline in interest rates used to calculate solvency gaps in the plans has badly hurt Air Canada, as with other employers with defined-benefit pension plans.
A reduction in the discount rate to 3.3 per cent from 4.5 per cent resulted in an approximate doubling of Air Canada’s pension gap to $4.2-billion last year.
It was not clear whether WestJet was lobbying against any extension of Air Canada’s pension cap, or seeking a higher cap, or pushing for other changes. Mr. Flaherty’s office declined to say whether he was moved by WestJet’s representations.
“We cannot comment on the specifics of individual companies. We also do not speculate about possible policy actions or discuss what might be under consideration,” Mr. Flaherty press secretary Kathleen Perchaluk said.
WestJet has been able to compete successfully with Air Canada as a no-frills carrier largely because it has a cost structure about one-third lower than Air Canada’s, though the spread between the two has shrunk as the result of aggressive measures by Air Canada.
In its representations to the government, WestJet met Transport Minister Denis Lebel, Labour Minister Lisa Raitt and Citizenship and Immigration Minister Jason Kenney, who is the senior minister for Alberta, where WestJet is based.
WestJet also talked pensions with the most senior bureaucrat in the government: Privy Council Office Clerk Wayne Wouters, deputy finance minister Michael Horgan and assistant deputy finance minister Jeremy Rudin, the point man on pensions.
Unlike Air Canada, WestJet does not have a defined-benefit pension plan. It offers an employee share purchase plan, and matches employee purchases of shares 1:1.
Air Canada’s legacy as a national carrier once owned by the government has worked for and against the airline. The government is unlikely to allow it go under, but its past means it is saddled by decades of regulations, crippling labour agreements and pension obligations.
The airline has worked hard to whittle back the costs, and on Tuesday it was unveiling a new low-cost leisure carrier, Rouge, intended to attract budget vacationers.
Be careful what you wish for.You might just get it.
If a level playing field is what is sought,would anyone really be happy if the Calgary based company had to follow the same rules as the Montreal based company.
Nes pas ?
If a level playing field is what is sought,would anyone really be happy if the Calgary based company had to follow the same rules as the Montreal based company.
Nes pas ?
Thread Starter
Air Canada, WestJet settle spying lawsuit
Last Updated: Tuesday, May 30, 2006 | 9:30 AM ET
CBC News
WestJet apologized to Air Canada on Monday and will pay $15.5 million to settle a lawsuit over a case of corporate espionage.
In a joint press release, WestJet apologized to its competitor and Air Canada top executive Robert Milton. Calgary-based WestJet will pay $5.5 million to cover Air Canada's investigation and litigation costs, and make a $10-million donation to children's charities in the names of both airlines.
The lawsuit centred on allegations that WestJet management used the password of a former Air Canada employee to access a website maintained by Air Canada to download "detailed and commercially sensitive" information.
"This practice was undertaken with the knowledge and direction of the highest management levels of WestJet and was not halted until discovered by Air Canada," the two companies said in a statement.
"This conduct was both unethical and unacceptable and WestJet accepts full responsibility for such misconduct."
Air Canada has accepted WestJet's apology and both companies have dropped their litigation against each other.
Air Canada filed suit against WestJet in 2004 seeking $220 million. WestJet countersued later that year, alleging Air Canada used private investigators to search through recycling material at the home of a WestJet executive in Oak Bay, B.C.
Shares of WestJet rose 55 cents to $11.63 on the TSX, while shares of Air Canada's parent company, ACE Aviation Holdings, were up 20 cents at $32.73.
Last Updated: Tuesday, May 30, 2006 | 9:30 AM ET
CBC News
WestJet apologized to Air Canada on Monday and will pay $15.5 million to settle a lawsuit over a case of corporate espionage.
In a joint press release, WestJet apologized to its competitor and Air Canada top executive Robert Milton. Calgary-based WestJet will pay $5.5 million to cover Air Canada's investigation and litigation costs, and make a $10-million donation to children's charities in the names of both airlines.
The lawsuit centred on allegations that WestJet management used the password of a former Air Canada employee to access a website maintained by Air Canada to download "detailed and commercially sensitive" information.
"This practice was undertaken with the knowledge and direction of the highest management levels of WestJet and was not halted until discovered by Air Canada," the two companies said in a statement.
"This conduct was both unethical and unacceptable and WestJet accepts full responsibility for such misconduct."
Air Canada has accepted WestJet's apology and both companies have dropped their litigation against each other.
Air Canada filed suit against WestJet in 2004 seeking $220 million. WestJet countersued later that year, alleging Air Canada used private investigators to search through recycling material at the home of a WestJet executive in Oak Bay, B.C.
Shares of WestJet rose 55 cents to $11.63 on the TSX, while shares of Air Canada's parent company, ACE Aviation Holdings, were up 20 cents at $32.73.
