By Gnaneshwar Rajan
(Reuters) – Air Canada said on Sunday it had reached a last-minute agreement with its pilots union on a fresh, four-year collective bargaining agreement, ending a stalemate over wages and benefits and avoiding a strike or lockout in the near future.
The airline, Canada’s largest, had been preparing to gradually cancel flights over three days and even completely suspend operations as early as September 18.
Flights will now operate as usual. Air Canada and Air Canada Rouge, which operate nearly 670 flights a day, carrying about 110,000 passengers a day, as well as cargo.
Air Canada said the terms of the fresh contract with the Airline Pilots Association (ALPA), which represents more than 5,200 pilots, will remain confidential until a ratification vote by members is expected to be completed within the next month.
“The new agreement recognizes the contributions and professionalism of Air Canada’s pilot group while establishing a framework for the airline’s future growth,” the carrier said in a statement.
ALPA said the agreement would deliver an additional C$1.9 billion ($1.4 billion) in value to members over the four years of the agreement, a 46% boost over the previous agreement, which expired in September 2023.
“After several consecutive weeks of intense, round-the-clock negotiations, progress has been made on several key issues, including wages, pensions and work practices,” First Officer Charlene Hudy, chair of ALPA Air Canada’s executive board, said in a statement.
If ALPA members accept the agreement, it will run from September 30, 2023 to September 29, 2027.
REDUCING THE PAY GAP
The two sides have been negotiating a fresh contract for the past 15 months, with pilots seeking rates that would narrow the pay gap with their counterparts at major U.S. airlines such as United Airlines.
Labour Minister Steven MacKinnon, in a post on Platform X, praised the efforts of Air Canada and its pilots, who he said had shown determination in seeking to reach a deal and avoid travel disruptions.
“Negotiated agreements are always the best solution and bring positive results for companies and employees,” he said.
Prime Minister Justin Trudeau said Friday the Canadian government will not take action to end the dispute, as it did last month in a 24-hour period to end a strike at the country’s two largest rail companies, Canadian Pacific (NYSE:) Kansas City and Canadian National Railway (TSX:)
Air Canada had previously offered a pay raise of more than 30%, as well as improved pension and health benefits. But the union said the offer was not good enough for its members, who worked for the pay rates and quality of life provisions negotiated in 2014.
Pilots at U.S. airlines have negotiated steep raises in fresh contracts over the past two years amid a tourism boom and labor shortages. United’s fresh pilot contract, for example, included raises of about 42%.
As a result, some United pilots now earn 92% more than their Air Canada counterparts, according to data from the pilots’ association. In 2013, the pay gap was just 3%.
(1 dollar = 1.3585 Canadian dollars)
