Air Canada and Pilots’ Union Reach Tentative Agreement, Averts Service Disruption

Air Canada has successfully negotiated a tentative, last-minute agreement with its pilots’ union over a new four-year collective contract, announced the airline on Sunday, thereby avoiding imminent disruptions in operations. As Canada’s largest airline, Air Canada was previously on the verge of cancelling flights over a three-day period and facing a potential complete shutdown by September 18. However, with the new agreement, flights are set to continue as scheduled.

The airline and its subsidiary, Air Canada Rouge, are responsible for operating nearly 670 flights each day, transporting around 110,000 passengers along with cargo. The terms of the new agreement with the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots, are currently confidential but are expected to be subjected to a ratification vote by ALPA members within the next month.

According to Air Canada, the new agreement acknowledges the contributions and professionalism of its pilot team, while also providing a framework for the airline’s future growth. The ALPA highlighted that the deal represents an additional value of C$1.9 billion (approximately $1.4 billion USD) over its four-year duration, which signifies a 46% increase from the previous contract that expired in September 2023.

First Officer Charlene Hudy, the chair of the Air Canada ALPA master executive council, expressed that significant progress was made on several critical issues during weeks of intensive negotiations, focusing on compensation, retirement, and work rules. If ratified by the members, the new deal would be retroactively effective from September 30, 2023, to September 29, 2027. The negotiations had been ongoing for the past 15 months, with pilots aiming for wage adjustments to narrow the discrepancy with their counterparts at major U.S. airlines such as United Airlines.

In an online post, Labour Minister Steven MacKinnon commended Air Canada and its pilots for their dedication to reaching an agreement and preventing travel disruptions. He praised negotiated settlements for yielding positive outcomes for both companies and workers. On the same note, Prime Minister Justin Trudeau previously mentioned the Canadian government’s commitment to resolving labor disputes promptly, as illustrated by the intervention in a railway strike the prior month.

Earlier offers from Air Canada included a wage increase exceeding 30% along with enhanced pension and health benefits. However, these were initially deemed insufficient by union members, who have been adhering to conditions set forth in a contract established back in 2014. Recently, pilots at U.S. airlines have successfully negotiated considerable pay raises amidst a period of travel boom and staff shortages, such as the new United Airlines pilot contract that includes approximately 42% pay increases. This has widened the pay gap with Canadian pilots, as some United pilots now earn up to 92% more compared to their Air Canada counterparts, according to association data. Notably, in 2013, the pay disparity was only around 3%.