Bloomberg News

Air Canada Attendants Face Minister Signaling Ban on Strike

October 11, 2011

(Updates share price in 10th paragraph.)

Oct. 11 (Bloomberg) -- Air Canada flight attendants are heading for a showdown with the government as Labor Minister Lisa Raitt signaled she would move to block a strike threatened for Oct. 13 at the nation’s largest carrier.

“The government will be considering its options,” Labor Minister Lisa Raitt’s office said yesterday in an e-mailed statement, without elaborating. “However, we will be clear that a work stoppage is unacceptable in this time of fragile economy.”

Raitt said last month that she planned to introduce back- to-work legislation as attendants at the Montreal-based airline came within hours of a strike. The government advanced such a measure in June just as striking Air Canada service workers agreed to return to work.

Leaders of the Air Canada Component of the Canadian Union of Public Employees announced plans to strike yesterday after 65 percent of members turned down a second contract agreement with the airline. That accord came Sept. 20 following last-minute negotiations to avert a walkout by 6,800 attendants.

Attendants will be able to strike legally from 12:01 a.m. on Oct. 13, according to a statement on the union’s website. Jeff Taylor, president of the Air Canada unit at CUPE, urged the government “in the strongest possible terms” not to intervene in the labor dispute.

Rebooking Rules

Travelers are being allowed to change flight dates over the next six days, Air Canada said on its website. The airline said it will implement a partial schedule, including flights by regional partner carriers such as Jazz Air and Sky Regional Airlines, if attendants walk out.

Normal operations will continue in the interim, Air Canada said.

“We don’t see any spike in announced cancellations yet,” Mark Duell, vice president of operations for data tracker FlightAware.com, said yesterday. Air Canada usually operates roughly 95 percent of its typical weekday schedule of about 650 trips, Duell said.

About 185 of the weekday flights cross the U.S.-Canadian border, Duell said. Toronto’s Pearson International is the carrier’s busiest airport, with 201 daily departures, according to FlightAware. New York LaGuardia has the most flights in the U.S., with 18.

Air Canada fell 1.4 percent to C$1.39 at 10:58 a.m. in Toronto. The shares tumbled 59 percent this year before today, compared with a 14 percent slide in the benchmark S&P/Toronto Stock Exchange Composite Index. Yesterday was a holiday in Canada.

Losses, Profit

The airline posted losses in 2008 and 2009, then reported profit of C$107 million in 2010. Air Canada probably will have a net loss of C$23.6 million this year, the median of four analysts’ estimates compiled by Bloomberg.

Flight attendants’ latest rejection was a narrower result than the 88 percent of those voting against the initial tentative contract in August. CUPE said in the statement that members are frustrated with Air Canada “after years and years of concessions.”

CUPE declined to divulge the contract terms. An airline spokeswoman, Isabelle Arthur, said in an e-mail that the proposed contract would have provided “industry-leading compensation and benefits.”

“We are very disappointed with the result,” Raitt’s office said in the statement after the latest union balloting. “There have been two full rounds of collective bargaining resulting in tentative agreements recommended by the bargaining committee. In each case the membership has rejected the recommendation of their team.”

--With assistance from Theophilos Argitis in Ottawa , Natalie Doss in New York and Robert Fenner in Melbourne. Editors: Ed Dufner, Donna Alvarado

To contact the reporter on this story: Heather Perlberg in New York at hperlberg@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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