Air Canada and the union representing more than 5,200 pilots announced Saturday night they have reached a tentative agreement on a four-year contract, averting a threatened strike that could have started within days.
The preliminary deal must still be ratified by members of the Air Line Pilots Association. Air Canada (TSX: AC) said contract terms will remain confidential until the ratification vote, which is expected to take place within a month, and approval of the Air Canada board of directors. Ratification requires approval by a majority of the voting membership.
ALPA said the tentative agreement will deliver an additional $1.9 billion of value for pilots over the length of the contract.
Canadian newspapers reported that pilots received a 42% pay raise, with a large chunk of it retroactive to September 2023.
“After several consecutive weeks of intense round-the-clock negotiations, progress was made on several key issues including compensation, retirement, and work rules. This agreement, if ratified by the pilot group, would officially put an end to our outdated and stale decade-old, ten-year framework,” said Charlene Hudy, chair of the Air Canada Master Executive Council who works as a first officer at Air Canada.
A moratorium on either side implementing pressure tactics was set to end on Sunday if there was no resolution to the 15-month labor dispute, allowing the pilots to give three-days’ notice for a threatened strike.
Business groups and Air Canada in recent days asked the government of Canada to intervene and force binding arbitration in the absence of a late agreement. Industry trade associations had warned that a work stoppage at Air Canada, which carries cargo in the belly hold of passenger planes and on six Boeing 767-300 freighters, would harm agricultural, manufacturing and medical supply chains that rely on air transport to move time-sensitive goods.
Air Canada Cargo had stopped accepting specialized types of cargo as the week went on so that customers wouldn’t be subject to having shipments stranded in their network if the airline had to halt operations due to a strike.
One of the main sticking points was the pilots’ interest in achieving wages comparable to U.S. counterparts. Air Canada said it previously offered a 30% wage hike.
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