Final Straw in CanJet Closure Due to Competition, Not Union

Tough competition and not the certification of two unions was the ''catastrophic'' event leading to the rapid shutdown of CanJet's scheduled airline services, company executives said Friday.

Ken Rowe, the chairman of parent company IMP Group, said in an interview that the airline was hit by a combination of business problems, including being squeezed by WestJet and Air Canada.

''With the increase in financial risks to run the scheduled airline, IMP decided to do what we did,'' he said.

Rowe disagreed with assertions the airline engaged in unfair labour practices and was determined to keep unions out of the company.

''You know as well as I do that we have unions all over the place and very seldom have a problem,'' he said, referring to the conglomerate's aerospace manufacturing divisions.

Lawyers with the Air Line Pilots Association International have been reviewing the airline's handling of the major downsizing, which eliminated 376 jobs in Halifax and 80 others in Toronto.

The union's legal team has been examining the way the low-cost carrier distributed release forms and severance packages to employees to see if it violated the labour code.

''The company hasn't looked too favourably on the certification,'' said Capt. Dan Adamus, the national representative for the Air Line Pilots Association.

''They've refused to set dates to negotiate with us. They certainly haven't been co-operating.''

Bernie O'Rourke, senior vice-president at IMP, said in an interview the decision had ''nothing to do with unions.''

''The expansion of WestJet and Air Canada, where they increased their capacity by 10 per cent, caused a catastrophic impact on the financial results of the airline this summer,'' he said.

''We realized this was a significant problem that was something that had to be dealt with immediately.''

O'Rourke said he's still eager to meet with the pilots' union, which represents about 100 employees, and expects that will occur next week.

Earlier in the day, representatives of the Canadian Union of Public Employees said they'd met with CanJet, and accepted their explanations for the demise of the company.

Marilyne White, a national representative for the union, said there was deep frustration over the abrupt decision, but she doesn't believe it was a union-breaking effort.

''Frankly, the airline industry has been in flux since deregulation. ... They may not like unions, but I don't think the job cuts are about that.''

Only four of the 134 unionized flight attendants will remain on staff, though CanJet has committed to rehire based on seniority if it manages to keep a charter business going this fall.

Three CanJet employees accused company management of lying earlier this year when they assured workers the carrier would never become a charter service.

''I think all along we haven't been told the truth,'' a woman who didn't want to be identified told the Halifax Chronicle-Herald.

Shona Thom, 34, a flight attendant and a CUPE local president, said her colleagues were going into the weekend with a sense of frustration over the uncertainty in their industry.

Thom said she's worked for four companies in six years and is weary of the uncertainty.

''I think this is my last airline,'' she said. ''That'll be it for me.''

The best severance packages will only last the flight attendants until the first week of December, she estimated.

Some analysts say CanJet's business plan may have been doomed to fail from the outset because its competitors have deeper pockets.

''We only have two choices in the West,'' said Rick Erickson, a transport economist and consultant based in Calgary. ''Atlantic Canada having three choices with a smaller population base was an unlikely bet.''

The pilots' union has accused the company of failing to notify the federal labour minister of the downsizing 16 weeks before the event, as required under the labour code.

O'Rourke acknowledged that as fact but argued the airline had no choice because it would have lost most of its business and ceased operations sooner had it done so.

The company has requested the labour minister waive the requirement for the early notification.

''The bookings would have tanked and it jeopardizes the entire enterprise and its ability to take care of its employees,'' he said.

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