Canada's WestJet Airlines cancels flights as pilot strike looms

By Rajesh Kumar Singh and Allison Lampert

(Reuters) -Onex Corp's WestJet Group on Thursday began cancelling flights ahead of a potential strike by pilots even as negotiations over a new contract continue.

The Canadian airline, which has about a third of the domestic market share, has scrapped 31% of its scheduled flights, according to data from flight-tracking website FlightAware.

WestJet pilots gave a notice on Monday that could allow for strike action as early as 0300 MT (0900 GMT) on Friday, raising the possibility of travel disruptions during the upcoming Victoria Day holiday weekend.

"Negotiations are ongoing," said Bernard Lewall, head of WestJet's pilots union. "We recognize flight disruptions are never an ideal outcome in this process for our pilots or passengers."

If WestJet's 1,800 pilots do walk off the job, it would be the first major pilots' strike in Canada since 1998.

For both sides, pay remains a hurdle. While WestJet is pricing salaries to the Canadian market, pilots want to narrow the pay gap with their U.S. counterparts. Pilots also want better scheduling.

WestJet said that it is "firmly committed" to reaching an agreement with pilots, but said agreeing to "unreasonable" wage expectations would "permanently" damage the company's financial viability.

Industry officials say Delta Air Lines' new pilot contract, which provides $7 billion in higher pay and benefits, has become a new benchmark for contract negotiations in North America.

The Air Line Pilots Association (ALPA), which represents WestJet pilots, has demanded that pilot contracts reflect today's labor market, arguing such a move would help the airline address its "pilot attraction and retention problem."

Earlier this month, the union said WestJet is losing 30 pilots a month.

In an internal memo, seen by Reuters, WestJet said it has offered its pilots the "Canadian industry leading" wage rate, which would translate into C$350,000 ($261,740.95) in total compensation for a wide-body plane captain, and C$300,000 ($224,349.39) for a narrow-body captain.

WestJet said it will park the majority of its 737 and 787 fleet, but WestJet Encore, Link and some 737 flights will continue to operate. The airline said doing so would allow it to avoid abandoning aircraft in remote locations without support and minimize the risk of customers and crew getting stranded.

Air Canada said it would try to accommodate passengers looking for new bookings, but said it has minimal ability to increase capacity further.

($1 = 1.3372 Canadian dollars)

(Reporting by Rajesh Kumar Singh in Chicago, Allison Lampert in Montreal, Shivani Tanna and Nathan Gomes in Bengaluru ; Editing by Sherry Jacob-Phillips, Krishna Chandra Eluri and Leslie Adler)