A labor dispute between WestJet (TSX: WJA), Canada’s second-largest airline, and its mechanics has led to widespread flight cancellations, disrupting travel plans for thousands during the Canada Day long weekend.
The strike, which began on Friday, has resulted in over 800 flight cancellations, affecting an estimated 110,000 travelers.
The Airplane Mechanics Fraternal Association (AMFA), representing about 680 workers, initiated the strike after failed negotiations with WestJet over salaries and working conditions.
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The union claims that their proposed wage increase would cost WestJet less than 8 million dollars beyond the company’s offer for the first year of the contract. WestJet, however, maintains that it offered a 12.5% wage rise in the first year and a compounded increase of 23.5% over the five-and-a-half-year term.
On Thursday, Canadian Minister of Labour Seamus O’Regan issued a directive calling for binding arbitration to settle the dispute. This move initially led WestJet to believe that a strike would be averted. However, the Canada Industrial Relations Board (CIRB) unexpectedly ruled that the strike was lawful, stating that the “ministerial referral does not have the effect of suspending the right to strike or lockout.”
This ruling caught both the airline and the government off guard, with WestJet calling it a “deliberate disruption.” The airline has had to reduce its active fleet from 180 to just 32 aircraft as of Sunday.
Many have criticized O’Regan’s handling of the situation, with some accusing the government of ineptitude in managing the labor dispute. Don Braid described him as “a bumbling minister,” and wrote that the minister initially appeared unaware that his binding arbitration order would not prevent a strike, leading to confusion and a rapid escalation of the conflict.
WestJet said in a statement early Monday morning that as of 10:30 PM MT on June 30, the labor action has ended with the Aircraft Mechanics Fraternal Association withdrawing the strike action, and moving to restore the network.
“The damage to Canadians and our airline is massive, a swift resolution was necessary; we take no victory laps on this outcome but will sleep better tonight knowing further harm has been prevented. We will see no further labour action coming out of this dispute, as both parties agree to arbitrate the contract in the case of a failed ratification,” commented WestJet COO Diederik Pen in a statement.
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