Air Canada gets labour deals with all unions
MONTREAL–Air Canada is on the runway to achieving labour peace after reaching a tentative deal with flight attendants to extend their contract by 21 months.
The agreement with the Canadian Union of Public Employees means the cash-strapped airline has reached "cost-neutral" agreements with all of its unionized employees.
The contract extensions and moratorium on pension contributions are subject to employee ratification.
The Canadian Auto Workers’ union representing service agents were the first to approve their agreement last week.
Air Canada CEO Calin Rovinescu said the deals were achieved in the backdrop of the current economic context and financial crisis facing the airline industry.
"These tentative agreements will allow us to move forward to the next milestones: obtaining the necessary governmental measures and approvals for the pension funding arrangement and raising new financing," he said in a statement.
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The airline has approached federal agencies for up to half the $600 million it is looking to raise. Majority owner ACE Aviation Holdings is believed to be willing to lend about $100 million.
The contract extensions include no increases to wage rates or pension benefit for 21 months.
Air Canada’s unions will share a 15 per cent equity stake in the airline and obtain one seat on its board of directors in exchange for their agreement on a moratorium on past service pension contributions.
The parties said the deal with flight attendants was aided by federally appointed mediators Jacques Lessard and former Ontario Superior Court justice James Farley.
David Newman, of National Bank Financial, stated in a research note that "the fundamentals remain poor, with Air Canada particularly impacted given its operating leverage."