Bloomberg News

Air Canada Pilots Union Says Members Vote for Strike Mandate

February 14, 2012

(Updates with airline comment starting in fifth paragraph.)

Feb. 14 (Bloomberg) -- Air Canada’s 3,000 pilots gave their union a mandate to strike if negotiators are unable to reach a new labor agreement with Canada’s largest airline.

About 97 percent of members voted in favor of the authorization, the Air Canada Pilots Association said today in a statement. The pilots now have the right to walk off the job, while the carrier can lock them out, provided each side gives 72 hours’ notice. Both have said they will continue talks.

“I wouldn’t read anything into the mandate other than that the pilots just reserve the right to strike if the negotiations break down,” David Tyerman, an analyst at Canaccord Genuity Inc. in Toronto, said in a telephone interview. “They have to give themselves that kind of out.”

Labor Minister Lisa Raitt urged the airline and the pilots earlier to keep working toward a deal and proposed a six-month process with a new government-appointed mediator, according to a statement from her office. Raitt also named Louise Otis and Jacques Lessard co-mediators, Air Canada said in a statement.

Air Canada said today’s announcement by the pilots’ union has no impact on its operations.

“We are committed to a negotiated settlement with our pilots and look forward to a final resolution to these long- standing negotiations,” Chief Operating Officer Duncan Dee said in a statement. “Customers can continue to make their travel plans and book with confidence.”

‘Defensive Measure’

Pilots don’t want a strike, union President Paul Strachan, said in the statement.

Today’s vote “demonstrates that Air Canada pilots are united in their desire to reach a freely negotiated agreement,” he said. “Pilots were forced to take this vote as a defensive measure because the corporation chose to put itself in a legal lockout position.”

Raitt thwarted a potential strike in October, referring a dispute between Air Canada and its flight attendants to a federal labor tribunal. In June, the airline’s striking service workers reached a tentative agreement minutes after the government introduced legislation that would have forced an end to the labor action.

“Odds of a pilot strike are very low,” Tyerman said. “We’ve already had two near-strike situations, and in both cases the government stepped in and stopped it before the airline was impacted.”

Chief Executive Officer Calin Rovinescu said on a Feb. 9 conference call with analysts that the company intends “to not impose a new collective agreement in the near term.” Those comments still stand, Fitzpatrick said today.

Three Agreements

Air Canada reached three separate agreements with unions that represent airline dispatchers, crew schedulers, mechanics, baggage handlers and cargo agents in the past week. About 8,750 employees are covered by the accords.

Talks with pilots began in October 2010. After rejecting a tentative agreement in May, the pilots are working under the terms of their last accord, which expired on March 31. That contract froze pay at 2008 rates, the union said.

Air Canada is seeking “more concessions and threatens our entire careers through scope changes that would ship much of our flying outside Air Canada, possibly offshore,” Gary Tarves, chairman of the pilots association, said in a Feb. 8 newsletter to union members.

Pilots are resisting the possible creation of a low-cost unit that would be based abroad, which the union says would result in lower salaries. Rovinescu said last week that the company is “evaluating various models” for a low-cost carrier, without being more specific.

Air Canada’s Class B stock closed unchanged at C$1.04 in Toronto. The shares lost 71 percent of their value in 2011.

--Editor: James Langford

To contact the reporter for this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net.

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


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