(Bloomberg) -- Air Canada reached a last-minute pact with the pilots’ union, averting a strike that would have grounded more than 1,000 daily flights worldwide.
Air Canada and the Air Line Pilots Association, which represents the company’s more than 5,000 pilots, arrived at a tentative agreement for a new four-year contract, according to a statement. Negotiations went on for more than a year. ALPA sought to close a pay gap with US counterparts, especially in entry-level wages for pilots.
The airline has offered to increase the aviators’ pay by 4% annually over three years, plus an upfront 26% pay boost as well as other benefits, according to a source who asked not to be named to discuss confidential details of the agreement.
The 42% compensation increase over the four-year contract is expected to cost the carrier C$1.9 billion.
“After several consecutive weeks of intense round-the-clock negotiations, progress was made on several key issues including compensation, retirement, and work rules,” Charlene Hudy, chair of ALPA’s executive council for Air Canada pilots, said in a statement. The deal requires the approval of a majority of voting members.
The Montreal-based airline says it carries over 110,000 passengers a day and 30% of Canada’s air freight. Goods such as refrigerated pharmaceutical products, perishable food, car parts, chips for computers and live animals are shipped through its cargo services. Air Canada is also the largest foreign carrier in the US with as many as 400 daily transborder flights.
Air Canada had asked the federal government to request arbitration as soon as this weekend if there was no breakthrough in negotiations.
Canadian and US business lobby groups had called on the government to intervene, saying Canada’s supply chains and international reputation have already been damaged by recent labor disruptions at railways and ports.
--With assistance from Mary Schlangenstein and Randy Thanthong-Knight.
(Updates with more details from the second to fourth paragraphs.)
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