Air Canada strike looms in a year of transport "chaos" | The Big Story

frequency podcast Network stories that matter podcasts that [Music] resonate it's been a year full of Labor unrest in the transportation industry but this one has the potential to top them all Air Canada is finalizing plans to suspend several flights as soon as Sunday the decision was made to cancel most of the operations in preparation of a potential pilot strike the deadline for an air Canada pilot strike is not for another week but already passengers are scrambling to rebook flights and the airline is saying that it may start cancelling flights as early as this weekend days ahead of the strike deadline why so early well maybe they remember when their competitor WestJet went through the same thing earlier this year it didn't go so well I'm hanging in in nowhere right now um there two boys um we don't know what to do and um yeah Germany's on the other side from the planet so now Air Canada is much much bigger than WestJet it's the largest carrier in the country by a mile tens of thousands of people fly every day on their planes what happens when those planes just don't fly and why has this year seen so many transport disruptions on Rails in airports and at ports in can Canada and the United States what's changed I'm Jordan Heath Rings this is the big story John grck is an aviation industry expert he is a faculty lecturer and program coordinator in supply chain Logistics and operations management at McGill University he joins us from the side of the road in his car he's one of our favorite people to talk to when uh transportation in this country is in danger of breaking down John my pleasure to be here with you Jordan why don't you set us up by giving us a bit of context about Air Canada as everybody Frets about a possible upcoming work stoppage like what percentage of Canada's airline travel airline industry does this company make up I'd say air can is about 40 to 45% of the Canadian Aviation capacity you know it's number one by a fair degree number two is wisit number three probably Porter Airlines at this point in time and then flare holding up the uh the the top four if I had to ask you just off the top and we'll get into the details of it um to describe what kind of problem uh an Air Canada shutdown would cause in Canada what would you describe it as oh I'd say it's major it's a it's a it's an inconvenience it would be something where you have I would say somewhere in a range of 100 to 110,000 passengers a day day that have trips planned on Air Canada so it's not insignificant it is something that those passengers who are booked on Air Canada have a high level of anxiety today they're probably getting emails and messages from Air Canada because Air Canada's already started to look at uh potentially cancelling flights in preparation for a strike so they're getting emails advising them here are your options your flight's probably going to get cancelled we don't know when but here are some of the options to be available and we'll let you know if and when the flights actually do get cancelled you mentioned 100 to 110,000 people a day um in terms of the Air Canada Workforce themselves how many workers are we talking about here and uh if you can summarize for us what the issues are here that's threatening a strike well I think what what you're seeing happen here is you know one group of employees which are the pilots that have uh a new Union that's representing them they T the uh the previous Union which was the Air Canada Pilots Association so this is a new Union that's representing these Pilots there are 5,200 Pilots if the pilots you know are on strike for all intensive purposes Air Canada is shut down what happens to the rest of the workers at Air Canada if the pilots go on strike are they still getting paid what are they doing yeah Air Canada is going to be looking at taking some layoff notices fairly quickly to the other unionized employees that are part of their um Operations Branch so you've got flight attendants you've got mechanics you've got ground service workers so if the flights aren't going AIC Canada will be looking at somehow minimizing its costs and looking to see if they can in fact put these individuals on layoff status pending a resolution of the stke or lock out that they may have with you with the pilots so the deadline uh for this labor dispute is the 18th of September which is still a week away here so y are as you mentioned people already hearing about their flights potentially being canceled as early as this weekend and being told to make arrangements now like this is a a fair buffer usually for a labor dispute it is I think that you know we saw this same phenomena happen with the West labor issues that they were having with their pilots earlier this year where WestJet in fact took action I think three or four days before the actual threat of a strike to in fact start cancelling flights in anticipation stke uh because you're looking at you know trying to make sure that your uh your operations you know and your flights your aircraft and your staff are not stranded so when you've had the airplanes that are going around the world as Air Canada has you're looking at making sure that if when if and when the strike does happen that uh the airplanes and the crews are in a secure location and so if there's a issue about location that's causing Air Canada Gree air canada would in fact not dispatch an airplane to those locations uh a few days before the strike actually happens so that people are not stranded and equipment is not stranded so this is where it gets interesting and this is why uh we called you because that process sounds really complex can you kind of walk us through the actual Logistics of shutting down like the entire Air Canada operation uh what does that look like on the ground in practice Yeah it's it is complex you know you you basically we have to look at each and every single flight that you know is scheduled to operate you know as of the strike date September 18th which is the tentative dictator can has set so anything that's operating it's in the air as of that time will get to land wherever they happen to be the first stop for that aircraft to land so there's no risk to the passengers uh or the airplanes when the St gets called but once the airplane lands the pilots walk off and from that perspective you'd rather have these Pilots walk off at their home base you rather you know you not you rather not have these Pilots walk off in Dubai or in Singapore or in Bangkok or you know in CAD Lanka so our cidate is looking at what's it going to take for us to make sure that by the time we get to a potential lockout or strike on the 1st of September you know what's the was where are our people where are our airplanes and you know what is is it that we have to do to make sure that when the strike or lockout does happen they're safe and so that will require the airline to cancel flights that are planned to operate before the strike or walkout date and to make sure that that operation that Air flight that flight and then those crews are not sent out under Mission because the odds of them making it back are not good let's talk about what passengers are experiencing as you mentioned right now you know they're probably getting emails about a potential cancellation of their flight uh in a couple of days even they could start getting emails that their flight has been canceled what options do they have and like what kind of uh compensation are they entitled to here if this goes down fire can has been very very uh upfront in telling passengers that once your flight is cancelled you know you have options including refunds so Air Canada will look at refunding your your ticket uh once a flight has been declared can and you're on your own after that if you have a trip that was planned there is no uh requirement by your Canada to in fact booked you uh on another flight you have to fend for yourself and making sure that you have you know your your your trip protected on your own so they got to go and look for another airline themselves and then pay for that ticket themselves as well that's correct you know the question is how fast is a Canada going to refund you right am I going to wait six months to get a refund or am I going to get the refunded in 10 or 15 days you know that's a interesting question that has yet to be answered by a Canada but you know in terms of other compensation we have the air passenger protection rights that are out there that do cover flights that are delayed or cancelled in you know in normal operations during the schedule and there is compensation you know if the flight is cancelled and it's out of the airlines control there is no compensation but in this case I I think Air Canada and the Canadian Transportation agency have concluded that this is an event that is outside the airlines control and that uh there would be no compensation provided by the carriers other than just a refund of the ticket and what about the rest of and I'm assuming this is covered by what you just mentioned but I got to ask it because I know a lot of people and I've heard this mentioned uh book holiday packages right that include your Air Canada flight but also uh lock you into a hotel or a rental car or whatever else it is people are just on the hook for those you know one of the things we always talking about in the industry is to ensure that you when you buy these these packages or these chores that you also buy insurance the insurance uh side of it you know is basically your your protection for this type of eventuality you as long as you're insurance qualy has coverage for it but you know that's probably the only saving grace um that you'll get out of this one is to look for insurance [Music] coverages you mentioned the WestJet strike and I know that lasted like just a couple of days but it still managed to shut down a ton of flights and strand people in Canada and other countries do you think there were Lessons Learned From that that Air Canada will use now well I think what you see happening with Air Canada it's a little different than what happened with WestJet is that Air Canada is taking the initiative to let passengers know that you know there is a potential for disruption that you know there is something that's that's going to be sent to you uh at the time of a cancellation uh it's just a the cancellations are not going to be a surprise that you know you should expect communication from Amic Canada and I think that whole process is little different than what we had when WestJet uh was going through its machinations with its Pilots so I think aican has learned a lesson from the WestJet Fasco and has me is trying to manage it a little differently I'm not sure whether in fact airic Canada you know is is looking at a strike or is looking at a lockout uh I'm not sure how that's all going to work out but yeah there there has been listings aler I think Eric Eric is applying it in general why has there been so much labor unrest in the airline industry specifically uh but also just in transportation uh in general you know we saw a rail uh work action just a few weeks ago yeah I think this is a situation of Air Canada's own design you know Air Canada back in the mid-2010s 2013 2014 uh had some issues with respect to his financial viability and they decided one of their answers as was to in fact go into these long-term contracts with their employee groups so that they would minimize any disruption to the airline so they entered into 10-year contract in in 2014 with the pilots uh in 2015 with the flight attendants and uh the price they paid was Labor peace for 10 years now the crows have come home to roost and you're paying a price for that 10-year contract now and so that's what's going on with there Canada that you know would they repeat this 10-year contract deal again I don't think so I think the unions kind of got their lessen talk to them and they're Canada as well so I think that we've seen the last of these long long-term agreements uh we're back to a three or four year agreement if at at at the most and that should you know come up with fixing the problem with the airline industry but transportation in general um you know is having a problem you know there there's a lot of things going on in transportation in terms of collective agreements that are expiring people have gone through covid have gone through layoffs have gone through salary freezes salary reductions and the industry cross various modes are looking to catch up so whether you're talking about the BC Port strike the Montreal Port strike you're talking about CN cpkc you're talking about WestJet you're talking about a cany even talking Air Transat you know Transportation seems to be in the in the in the in the bullseye for organized labor to kind of catch up on on wages and to make sure that you know they people understand that they are an ingal part of the supply chain the supply chains are important to keep economic stability in our country and the union is taking advantage of that but it's not just in Canada the US east east coast ports are facing a a strike on October 1st that would shut down 77 ports in the US and the um you know the provision for those ports is that they're looking for a are you sitting down 77% wage increase wow so yeah they were all catching up and I think that there's a lot of work that has to be done to kind of press the reset but in terms of making sure we we somehow have Labor peace and that we have Collective agreements that reflect the the actual needs of organized labor as well as the operators is part of this because um you know they're pressing their advantage because during covid I think the general public learned a lot more rapidly about how uh integral these folks are to the supply chain and the transportation chain and now you know the public has a better understanding of where they fit into all this yeah there is and you know I think that you know you go back to the pilots for a few minutes and just talk about you know how this thing kind of got to where it's at you know there is a pilot shortage in North America I would say I would say even globally you know the manufacturers are producing tons and T you know thousands of airplanes and there's not enough Pilots to to get these airplanes flying so the larger carriers are very concerned about about getting your pilot resources and retaining the pilot resources they need and their answer uh has been to increase wages and to pay to pay more than anybody else so that they have the ability to retain their their pilots in this case so Delta American you know United uh signed massive wage increases over the last 18 to 24 months ranging from 35 to 45% wage increases as a means of retaining people retaining pilots and that has a Cascade effect and we're seeing that tasting effect very much both in the WestJet negotiations earlier this year and and very much so now with a Canada when we talk about Air Canada if this uh strike happens is there a role for the government to play here I realize that's a kind of a delicate question to ask but obviously it is a huge part of the infrastructure you mentioned almost 50% of our Airline capacity yeah it's an issue that we have to somehow deal with um you know the question is you know what's the what's the government role in in labor negotiations and in collective bargaining what I see happening is that there seems to be in my opinion you know an advocation on the part of management to be willing to negotiate because they know that the government will step in and will in fact take action you know in spite of the fact that negotiations have been slow so we saw that with with the West J Pilots we saw that most of definitively with the WestJet mechanics very obvious with the rail strike that you know there was in my opinion an addication of willingness to negotiate on the part of management and they're saying well that doesn't really matter we're going to get them we're going to get either binding arbitration or Back To Work legislation so let's not sweat it you know we'll get a public outry so you know the country was in crisis economic crisis with a real strike and the government took action 18 hours after the strike was launched it was over but with Canada there is no economic emergency there is no National Emergency there is no crisis that we have to deal with because we do have competition thank you very much in Canada that you know have flying 200 some odd airplanes and as far as I'm concerned there is going to be inconvenience for sure you know those 110,000 passengers a day are going to get inconvenience and it's going to cost them more but that's the game that are being that's being played between management and Union and Air Canada is not recognizing you know its need to to Hy up to to meet the union requirements because they're saying the government's going the legisla fact to work anyway so no big deal if this strike does happen and continues for some time like you know you mention again 100,000 people a day how does that compound day after day I mean we saw WestJet which didn't even really have a work stoppage still took like a couple of weeks to get back up to full strength like what kind of uh I don't know if chaos is the right term but what kind of mess would it cause if this strike happens and goes for a week and then continues yeah I you know I'll use the term chaos it's okay it is going to be chaos you know and it's going to take at least a couple of weeks for Canada to get back into some shape or form of current self it's going to take them a couple weeks to get their act together the other carriers in Canada will try as much as they can to supplement their services but uh it's going to take at least 10 days to two weeks to come back last question then uh what do you wish uh we all understood better the public understood better about this whole uh labor issue in the airline industry or with air canum particularly what do we not know that we need to this is a an issue uh in transportation that um has been you know on the back burner for for years if not decades that you know who has control of the destiny of you know employees in the airline industry and it is a fundamental issue that I think ER Canada and the unions are coming to to grips with that you know when you talk about who has the final say in terms of making sure that workers rights uh are being recognized and being acted upon and I think that that's where we have to somehow some way really change our Labor Relations practices and our you know labor negotiation practices to recognize that you know the conundrum that we're facing in Canada in transportation is serious that you know the collective bargaining process that we have probably needs to get retuned to something else the current process isn't working as we can see in various domains but we do need to have somehow some way recognition that Supply chains uh are very very critical to the success of the country we can't afford to have all of these supply chain interruptions happen because it affects our credibility in in World Trade so we need a new mechanism uh to kind of figure out how do we negotiate without causing all of this chaos as we say in the supply chains and in your transportation John thank you so much for this and speaking of Transportation chaos I will let you get back in your car before you get pulled over by the cops and thanks again for spending some time with us I think they called for a tow truck which is cool all right no I'll be okay take care have a good one John grck of McGill University hopefully not getting a ticket right now that was the big story for more from us head to the big story podcast.com podcast.com and leaving us a message the big story is available on every single podcast player in the world and that now includes Seeker s KR you should check it out if you haven't thanks for listening I'm Jordan Heath Rawlings we'll talk tomorrow