Air Canada offers pilots less generous wages in five-year deal

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Toronto Star
Vanessa Lu
Business Reporter

Air Canada’s proposal to its 3,000 pilots calls for less generous wage increases than a tentative deal rejected last year.

Details of the offer are contained in a Jan. 24 memo from the airline to pilots, obtained by The Star, as the countdown to a legal strike or lockout began this week.

The proposal, dated Jan. 16, outlines a five-year contract that begins on the day of ratification, with increases of 2 per cent in each of the first three years and 3 per cent in the final two years.

By contrast, the tentative deal reached last spring, was for four years, with higher increases at the start. It called for annual wage hikes of 5 per cent, 3 per cent, and then 2 per cent in each of the last two years.

It is unclear whether the company has moved from this position as contract talks continue. Both Air Canada and the Air Canada Pilots Association declined to comment on Thursday.

Earlier this week, the airline refused to extend conciliation talks after agreeing to two one-week extensions. That kicked off a 21-day cooling period to a legal strike or lockout around Valentine’s Day.

The union has not called a strike vote yet, and union president Paul Strachan said Tuesday there were no immediate plans to do so.

In the memo, Rick Allen, Air Canada’s senior director of flight operations, writes that the company’s objectives include more operational flexibility, pension stability and ensuring the airline is competitive.

It names WestJet, Porter, Southwest and JetBlue as main competitors in Canada and on flights to the U.S. On international routes, it cites potential threats from Singapore Airlines, Cathay Pacific and Emirates Airlines.

While Air Canada officials have said they wants to start a low-cost leisure airline to be competitive, there was no specific mention of a discount carrier in this proposal.

It listed the possibility of additional carriers operating on behalf of Air Canada Vacations and Air Canada Cargo, suggesting possible outsourcing of work, which would likely draw the ire of Air Canada’s pilots.

In response to the airline’s memo, the union’s master executive council chair Gary Tarves issued an internal newsletter, calling it a “selective view of its own proposals.”

He added, “We will not be distracted by the company’s latest attempt to derail our efforts to bargain and achieve an acceptable collective agreement.”

Air Canada began negotiations with all its union groups last year, and the pilots were the first to strike a deal, even before their contract expired last March 31.

However, the pilots’ tentative deal quickly unraveled over a proposed discount airline and two-tier pensions. They voted 67 per cent to turn it down.

Rank-and-file members were so upset that they voted to recall several top union officials, and a new negotiating team was named.

By then, the Harper government had won a majority, and Labour Minister Lisa Raitt quickly threatened to bring in back-to-work legislation when the airline’s customer service agents walked off the job. The CAW quickly settled after a three-day strike.

The flight attendants, represented by the Canadian Union of Public Employees, also threatened to strike after a tentative agreement was rejected by members.

On the eve of a strike, Raitt sent the dispute to the Canada Industrial Relations Board, essentially blocking any walkout. The two sides eventually agreed to binding arbitration.

The arbitrator imposed the exact contract the union members had turned down, which was a four-year deal. The wage increase was 2 per cent increases in the first three years and 3 per cent in the last year.

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