Written by Jnaneshwar Rajan
Air Canada said early Sunday it had reached a tentative agreement with its pilots’ union on a new four-year collective agreement, a last-minute deal that could avert a strike or lockout in the near term.
Before the tentative agreement was reached, Canada’s largest airline was preparing to gradually cancel flights over three days and shut down operations completely as early as 12:01 a.m. ET (0401 GMT) on Wednesday, Sept. 18.
Air Canada and Air Canada Rouge, which operate about 670 flights a day carrying about 110,000 passengers plus cargo, said they would continue to fly normally for now.
Air Canada said in a statement that the terms of its new agreement with the Air Line Pilots Association (ALPA), which represents more than 5,200 pilots, will remain confidential, pending a ratification vote by its members, which is expected to be completed within the next month.
The American Pilots Association said in a separate statement that its leaders had approved the interim agreement with Air Canada for ratification by members.
The two sides have been negotiating a new contract for the past 15 months, with pilots demanding wage rates that would narrow the pay gap with their counterparts at major U.S. carriers such as United Airlines.
Labour Minister Steve MacKinnon said in a post on X that disruptions to Canadian travel were avoided thanks to the hard work of federal parties and mediators.
Canadian Prime Minister Justin Trudeau said Friday that the Canadian government will not intervene to end the dispute as it did last month within 24 hours to end a strike at the country’s two largest railway companies. Canadian Pacific (NYSE:) Kansas City and Canadian National Railways (TSX:).
Air Canada had previously offered a wage increase of more than 30 per cent, as well as improved pensions and health benefits. But the union said the proposal was not good enough for its members, who were working under wage rates and quality-of-life provisions negotiated in 2014.
Over the past two years, U.S. airline pilots have negotiated big pay increases in new contracts amid a travel boom and staff shortages. United’s new pilot contract, for example, included a pay increase of about 42 percent.
As a result, some United pilots now earn 92% more than their Air Canada counterparts, according to data from the pilots’ association. In 2013, the pay gap was just 3%.