But making customers happy likely won't be nearly as hard as keeping employees contented. And therein lays Milton's biggest challenge. "I think he's done an awful lot of smart things at the airline, but I think he's based them on the premise of labour peace. I'm not at all convinced that's guaranteed," says Douglas Reid, a professor of strategy at Queen's University School of Business. "The unions do not see current compensation levels as adequate. They see them as an aberration."
As ACE begins racking up profits, the 26,500 employees at the mainline carrier will want their cut. Unfortunately for them, Reid points out, the holding company structure was specifically designed to isolate ACE's most profitable units (Aeroplan, Jazz and ACTS) from the less profitable mainline carrier. A profit-sharing program was put in place at the latter in exchange for union concessions during the restructuring. But if employees can't partake in the booty from ACE's other units, it may not be long before workers begin to balk. If they do, don't expect Milton to cave.